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Smarter UK employment regulation: the Government gets the ball rolling

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Kate Pumfrey



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16 May 2023

Hotfooting off its policy paper published last week, the UK Government has started consulting on how to reform rules on working time record-keeping, paid holiday entitlement, and limited aspects of TUPE consultation. It has also confirmed that it will safeguard key worker protections under other EU-derived employment regulations. 

Deregulating bureaucratic employment provisions

The Government wants to reduce the administrative burden for employers and simplify the rules for workers. It makes the following proposals in the consultation paper but invites views from employers and workers on how best to proceed:

  • In relation to working time record-keeping, removing the uncertainty brought about by a 2019 ECJ case (Federación de Servicios de Comisiones Obreras (CCOO) v Deutsche Bank SAE), in which the ECJ ruled that employers should keep records of daily working hours. There are a series of questions for employers and workers around how they approach record-keeping, both as a result of the judgment and under the Working Time Regulations, presumably to decide if some level of record-keeping should continue. 
  • In terms of paid holiday entitlement, the proposal is to introduce one pot of 5.6 weeks of statutory annual holiday, to be governed by one set of rules.  There will still be a distinction with regard to carry-over into the next holiday year, with a restriction on carrying over the first four weeks other than in cases of sick leave/family leave, and an ability to carry over 1.6 weeks of holiday by agreement.  On the big question of the rate of holiday pay, the Government notes that a lot of employers already pay holiday at a uniform higher rate (ie. the pay rate for the 1.6 weeks’ portion is levelled up to the more generous pay rate for the four-week EU-derived portion), but nevertheless seeks views from employers and workers on what pay rate should apply.
  • Employers should be given an option of paying rolled-up holiday pay at the rate of 12.07% (the proportion of 5.6 weeks of statutory annual holiday in relation to the 46.4 working weeks of the year) for all workers.  There is no word of changes to address the impact of the Supreme Court's Harpur Trust v Brazel ruling on part-year workers’ holiday entitlement, but presumably the solution will be aligned.
  • The TUPE proposals are further clarified. The proposal is that businesses of any size should be permitted to consult directly with employees (where no existing employee representatives are in place) where fewer than 10 employees are transferring. Separately, all businesses with fewer than 50 employees should be exempt from this requirement (not just those with fewer than 10 employees as per the current exemption). 

Employers have until 7 July 2023 to have their say.  It’s worth noting that the Government has identified these reform proposals from an “initial assessment”, indicating that further deregulation measures could follow. One question invites respondents’ experience of TUPE and suggestions for potential improvements to it, paving the way for more tinkering with TUPE (at least).

Key worker protections safeguarded

The Government has also nailed its colours to the mast as regards other retained EU employment regulations, such as those relating to maternity and paternity leave, protections for part-time and fixed-term workers and European Works Councils. These regulations will be preserved, and the key worker protections that they provide for will therefore remain unchanged. 

Non-compete reform: no word on this yet

Watch this space for developments on post-termination non-competes, on which we expect further details soon.

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