The Secretary of State has announced that the Government is going to replace the current ‘sunset clause’ in the Retained EU Law Bill with a list of the retained EU laws it instead intends to revoke at the end of 2023.
That list has now been released and actually has a minimal impact on employment law. However, what this does mean is that EU employment laws will now remain binding in the UK unless they are expressly revoked.
As a result, the Government has announced proposals to change several key areas of UK employment law:
Simplifying TUPE legislation
The Transfer of Undertakings (Protection of Employment) Regulations (TUPE) protects employees when the business they work for transfers to a new owner. TUPE regulations can also apply when a service transfers to a new provider or is taken back in-house.
At present, businesses are obliged to ‘inform and consult’ with representatives of employees who are affected by a transfer, and before that transfer takes place. This ‘inform and consult’ process includes ensuring obligations are met around the election of employee representatives, where applicable, and informing those representatives about crucial information in good time before the transfer to enable ‘meaningful consultation’.
At this time, the only exception to the requirement of electing employee reps is where the business is a ‘micro-business’. In this context, a micro business is a business that employs fewer than 10 employees.
The Government is now proposing however to widen this exception and thankfully streamline certain obligations within the TUPE regulations:
to cover businesses that employ fewer than 50 people
for those transfers that affect less than 10 employees, allowing the business to instead consult directly with the affected employees
Reform of the Working Time Regulations (WTR)
The Government plans to change the Working Time Regulations and are proposing to:
allow rolled-up holiday pay (this is where holidays are paid for in an employees wage, instead of them actually taking the time off)
merge the current 4 weeks (EU-derived) annual holiday entitlement into the additional 1.6 weeks UK statutory holiday
eliminate the requirement for employers to keep records of all individuals’ working hours
Restrictions on the duration of non-compete clauses
The Government is intending to introduce a new law which restricts the length of non-compete clauses to three months.
A non-compete clause is a type of post-termination restriction commonly included in the contract of employment, frequently known as a ‘Restrictive Covenant’ (RC). The non-compete clause is also usually included in a wider group of RC’s, including non-solicitation of staff, customers and suppliers.
The non-compete clause is used where the employer has a business interest it wants to protect, which ultimately restricts the employee’s ability to start up a competing business or more commonly, work for, a competing business after employment has ended.
Until now, it has been for the courts to decide whether RC’s are reasonable and therefore enforceable. In making their decisions, they have had to consider the balance between an employee’s freedom to trade and earn their living against the need to protect employers’ business concerns.
At this stage, timescales haven’t been given as to when the Government will introduce the legislation needed to implement the above changes.
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