Brexit changes to employment law announced!
Last month business secretary Kemi Badenoch announced that that the Retained EU Law (Revocation and Reform) Bill (the Bill) was due to be significantly scaled back.
We now know that the government is abandoning the 'sunset clause' in the Bill (which would have meant that almost all EU-derived law would have been automatically revoked by 31 December 2023), and we also know a bit more about the government's plans in relation to employment law.
No more sunset clause
The government's decision to abandon the Bill's sunset clause means that all EU law will remain binding in the UK unless it is expressly repealed. The Bill will be amended to contain a list of the retained EU laws that the government intends to revoke on 31 December, but other than the legislation appearing on that list everything else will remain in force. This means that instead of around 4,000 pieces of legislation being scrapped we're looking at around 600.
The government has published the list of EU-derived legislation that it intends to revoke and, assuming that this remains unchanged, the impact on employment law is negligible (some regulations on posted workers and on the working hours of drivers of road tankers seems to be the extent of it).
Employment law changes on the horizon
The government has set out its intentions in a policy paper, 'Smarter regulation to grow the economy', which it published on 10 May. The paper sets out the government's proposed changes to employment law which it claims "will cut red tape for businesses and save £1 billion per year while safeguarding the rights of workers".
The measures the government sets out are designed to "create a more competitive and productive economy".So, what will change?
Working Time Regulations
The government is going to consult on proposals involving the Working Time Regulations. These include:
- Removing the reporting requirements on working hours (although this will have limited impact as, in practice, not many employers actually comply with these requirements).
- Reducing the administration burden and complexity of calculating holiday pay by introducing rolled-up holiday pay and merging the two separate leave entitlements (4 weeks' basic leave, and 1.6 weeks' additional leave) into one "pot" of statutory annual leave.
The government wants to simplify the TUPE Regulations to reduce the administrative burden without changing employee rights.
Currently it is not possible for employers to consult employees directly without first trying to appoint employee representatives (although there is a micro-business exemption for businesses with fewer than 10 employees). The government is going to consult on removing this requirement for businesses with fewer than 50 people and for transfers affecting less than 10 employees, enabling employers to consult directly with the affected employees.
The government intends to legislate to limit the length of non-compete restrictive covenant clauses to 3 months. The rationale being that this will provide employees with more flexibility to join a competitor or start up a rival business after they have left a position. The government claims that this will give "up to 5 million UK workers greater freedom to switch jobs, apply their skills elsewhere and even earn a pay rise" as well as providing "a boost to the wider UK economy, supporting employers to grow their businesses and increase productivity by widening the talent pool, and improving the quality of candidates they can hire".
The government stresses that these plans will not interfere with the ability of employers to use notice periods or gardening leave, or to use non-solicitation clauses or confidentiality clauses to limit what departing employees can do.
What's the time frame?
No time frame has been specified, so it's unclear when these proposals will come into force. The provisions in relation to non-compete clauses will come in "when Parliamentary time allows", and the provisions in relation to the Working Time Regulations and TUPE will be the subject of consultation before any changes are made.
'Smarter Regulation to Grow the Economy" is the first in a series of updates on how the government intends to reform regulations to support economic growth. The list of future announcements trailed in 'Smarter Regulation' includes how the government will "reform regulations to reduce the cost of living, deliver choice to consumers, establish trailblazing regulation to catalyse innovation and make the UK a science superpower, and remove obstacles to building world-class infrastructure".
It's clear that this is the beginning of a whole series of changes, but in the meantime it's good news that we're getting some clarity on the government's plans, and that we're no longer facing a wholesale clear out of EU-derived laws in a matter of months!