Potential reforms to employment law post-Brexit

Earlier this year we reported on a provision in the EU Law (Revocation and Reform) Bill (otherwise known as the “sunset clause”), which would have resulted in EU laws being automatically repealed at the end of 2023 unless specific laws were passed to keep the relevant piece of legislation in force.  As much UK employment law is derived from EU law, this would have created huge uncertainty for employers. However, the government has recently announced the removal of the “sunset clause” and published the list of EU legislation intended to be revoked on 31 December 2023.  This means that vast swathes of UK employment law which would have automatically disappeared will remain, unless the government expressly decides a particular law should be removed.  As a result we expect the uncertainty for employers to be greatly reduced.

In addition to the above announcement, on 10 May 2023 the government set out some new proposed reforms to UK Employment law. They include:

• Merging the basic EU right to 4 weeks holiday per year with the UK right to an additional 1.6 weeks, meaning the same rules will apply to all 5.6 weeks’ holidays.  This change may bring simplified rules for calculating statutory holiday pay (such as whether to include overtime, bonuses, and other payments), although this remains to be confirmed.

• Permitting ‘Rolled-up’ holiday pay, meaning that employers could pay seasonal or casual workers for their holiday entitlement on an ongoing basis (e.g. including an element of holiday pay within their hourly rate), rather than ensuring that they take periods of paid leave.

• Amending the TUPE regulations, to allow businesses with fewer than 50 employees, and where there are fewer than 10 individuals transferring, to consult directly with the employees rather than employee representatives.

• Limiting ‘non-compete’ clauses in employment contracts to a maximum period of three months. This is not expected to affect other types of post-termination restrictions, or prevent employers from restricting activities during notice, or garden leave.

• Relaxing obligations to keep Working Time records.

Whilst these are just proposals at the moment, they could mean good news is on the horizon for some employers, particularly those grappling with calculation of holiday pay and TUPE consultations for smaller employers. It is important to remember that these are not implemented yet, and the picture may change. If you would like advice on the law in these areas at present, please speak with your usual contact or get in touch using our form here.

Barrass Whiting LLP

25/05/2023