In a written statement on Wednesday 10th May 2023, the Secretary of State for Business and Trade made it clear that the Government’s proposed EU Revocation Bill will now not contain a so-called “sunset clause”.
As originally drafted, any EU retained law which was not otherwise expressly enshrined in UK law would have been automatically repealed at the end of this year. This would have impacted on areas as diverse as workers’ rights and environmental protections.
What is clear is that the Government has now realised the scale of the task and the risks of automatic repeal of legislation which had not been fully reviewed.
The Bill will therefore allow for existing EU law to be retained unless and until it is replaced or repealed.
The Proposed Changes
At the same time, the Government has also announced proposed changes to workers’ rights as part of regulatory reform.
In particular, these include a review of the Working Time Regulations to tackle well-established issues regarding holiday entitlement and pay. The specific changes referred to include:
Normal & additional annual leave
Merging of ‘normal’ and ‘additional’ annual leave to create a single, standard 5.6 weeks for full time equivalent workers.
This would likely address the confusion in irregular working calculations as there would be no distinction between the 4 weeks under EU law and the additional time which UK law permits.
The change could implicitly mean a return to the basic calculations of holiday pay without the need to factor in commission or overtime.
Rolled-up holiday
Allowing ‘rolled-up’ holiday. Rolled-up holiday is commonly used for seasonal or part-year workers where their holiday entitlement is included in salary. They take their leave without additional pay because that has already been included.
This has technically been unlawful for a long time, but UK law has always limited the potential value of a claim where paid holiday has been taken and is shown clearly on a payslip.
Recording working hours
Removing the regulatory requirement for employers to record working hours. The intention of this regulation was to ensure that employers took some responsibility for masking sure staff only worked hours which were otherwise lawful under the Working Time Regulations.
The biggest problem is that very few employers actually do it effectively and there is no cause of action by workers for failure to keep those records.
Changes to TUPE consultation requirements
The proposed amendment would mean that employers no longer have to consult with representatives in a business of fewer than 50 relevant staff of whom 10 or less are transferring.
In practice this is only going to affect businesses of between 10 and 49 staff of whom fewer than 9 are transferring due to existing rules which exempt micro-businesses.
How do these changes affect worker’s rights?
Despite the potentially limited scope, it is worth pointing out that all the above changes arguably limit or clarify workers’ rights rather than protect or enhance them.
The first two changes, in particular, should have the effect of reducing confusion around holiday entitlement and avoid the situation created by recent case law for irregular and part-year workers.
There is no proposed timescale for these changes although none require primary legislation which means they could be changed very quickly by an appropriate statutory instrument without necessarily having a parliamentary debate.
Post-termination restrictions
The one other change proposed in the announcement relates to post-termination restrictions and look to further limit the scope.
Specifically, the announcement refers to non-compete clauses which are, by default, an unlawful restraint of trade but are often found enforceable where a business can show it is protecting a legitimate interest.
Such clauses often prevent even relatively junior staff from working in or for a competing business for anywhere up to 12 months after leaving an employer.
Three-month limitations
Under the proposal, such clauses would be limited to three-months. The announcement makes no reference to non-solicitation or non-dealing clauses which often have the practical effect of limiting a departing employee’s future opportunities whether a non-compete is enforceable or not.
This would require an amendment to primary legislation and so is much less likely to be introduced quickly.
Related: Non-Compete Clauses and Post Termination Restrictions - How enforceable are they?
Potential legislative changes
Finally, it is worth noting that an election must be held during or before January 2025 and could be as early as spring next year. This could obviously result in a change of Government or governing party which could drastically change legislative priorities.
The government’s full announcement can be found here.
Employment law advice and guidance: Stay up to date
To keep up to date with employment news, tribunal and updates; you can register for our free newsletter here.
Employment & HR Solicitors
If you have any questions following this article, or would like to speak to a member of the team, please don’t hesitate to get in touch with our bright Employment Experts.
Call us on 01202 499255, or fill out the form at the top of this page, for a free initial chat.
Comments