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On 10 May, the Government published plans to make a number of changes to EU-derived employment law following the UK’s exit from the EU.

The announcements are linked to the Government’s decision to abandon the ‘sunset’ provisions in the Retained EU Law (Revocation and Reform) Bill which, if passed into law, would have repealed all retained EU law at the end of 2023.  Instead, EU law will remain binding unless specifically revoked.

Working Time Regulations 1998 (WTR)

To reduce some of the more cumbersome regulations affecting businesses, the following proposed changes to the WTR have been announced:

• Removing the requirement for employers to record the number of hours worked by employees to ensure they do not exceed the 48-hour per week limit;
• Allowing holiday pay to be paid with basic pay rather than at the time the holiday is taken (rolled-up holiday) which is prohibited under EU law;
• Merging the 4 weeks ‘normal’ holiday entitlement provided by EU legislation with the 1.6 weeks ‘additional’ entitlement to create one pot of statutory annual leave of 5.6 weeks.

Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE)

The Government intends to simplify TUPE rules to ease administrative obligations on employers.

It is proposed that businesses with fewer than 50 employees, transferring less than 10 employees to another business, will no longer be required to consult with employee representatives and instead can consult directly with the employees affected.

Non-Compete Clauses

Unrelated to EU law, the Government also plans to limit the duration of non-compete clauses in employment contracts to 3 months in an effort to encourage competitiveness amongst businesses and boost the economy.

This is not intended to impact upon the use of non-solicitation and confidentiality clauses, paid notice periods or gardening leave.

Comment

Given the proposals are aimed at increasing productivity by reducing administrative burdens within businesses, whilst safeguarding the rights of employees, they are likely to be welcomed by employers.

The implementation date for these changes is yet to be specified, although the intention to legislate on non-compete clauses “when parliamentary time allows” indicates the TUPE and WTR related reforms may be actioned more quickly. 

This marks the first in a series of reform proposals, so further announcements are expected to be forthcoming.