The UK Government has announced both a reversal of the planned “sunset” provision of its Retained EU Law (Revocation and Reform) Bill (“REUL”) and at the same time has set out its plans for changes to certain employment law rules.
On 10th May, 2023 the Government announced in a written statement to parliament that it is abandoning the sunset clause in the REUL. This provision would have automatically revoked all EU-derived law from our statute books, unless a statutory instrument were passed to preserve it.
With this reversal, we will now retain all binding EU law unless and until it is expressly repealed in UK legislation.
There has now been a list published of the specific EU laws which are planned to be revoked, though as far as Employment law is concerned there appear only to be very few minor changes.
However, in the meantime, a Government paper has announced plans for regulatory reform, and specifically has initially highlighted some significant changes planned to Employment law.
Working time regulations and holiday pay calculations
The Working Time Regulations 1998 will be retained, but the proposal is to remove requirements relating to recording of working hours and other administrative burdens.
The paper explains that the administrative issues they are referring to appears to be in relation to the sometimes-complex calculation of holiday pay. Importantly, the government proposes to (re-)introduce rolled up holiday pay, so that workers can receive holiday pay with each payslip.
The proposal will also merge the two types of annual leave (the 4-week EU-derived leave, and the additional 1.6 weeks’ leave from domestic rules) into one statutory entitlement. This will maintain the existing full entitlement to 5.6 weeks’ leave.
TUPE
Only a minor change to TUPE is proposed, allowing an exception for businesses with fewer than 50 workers and where fewer than 10 employees are transferring, so that employees can be consulted with directly, without the need to elect representatives.
Non-compete clauses
After previous consultation, the Government is now proposing changes to legislation to restrict how non-compete clauses can be used. The proposal would be to allow restriction by a maximum of 3 months. This change is stated to be intended to advantage business and trade overall as it will provide employees with more flexibility to join a competitor or start up a rival business after they have left a position.
The plans would not affect other types of post-termination restrictions, such as non-solicitation or non-dealing clauses, and will not interfere with the ability of employers to use notice periods and garden leave as a buffer to protect company interests when employees are leaving the business.
More changes to come?
There is no timetable set for these changes, but they will not require primary legislation and so can be done quite quickly.
The Government have indicated they have plans for additional new regulation in other areas, and there may be more changes for employers on the way.
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