Employment law: Changes in the works

By Ged Henderson

31 Jul 2023

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There will be no Brexit bonfire of UK employment laws. The matches have been put back in the box, for the time being at least. The government has massively watered down its ambitions for replacing or removing thousands of EU laws and the December timetable it imposed.

The U-turn will mean only several hundred laws, publicly announced by the government ahead of time, will now be subject to the so-called ‘sunset clause’ which would have automatically deleted every EU law which hadn’t already been reviewed.

Announcing the decision, the government said the new approach would allow it to more properly target areas in need of reform and also ensure no unintentional removing of safety regulations. However, it doesn’t mean business as usual when it comes to employment law. Change is on its way which will impact businesses in Lancashire.

Surveying the landscape, Alison Driver, managing director of Rawtenstall based Metis HR, says there is still “much uncertainty” and it remains a watching and waiting game for all employers.

She says: “There is much hype around impending changes to employment law. In reality, although there are changes coming, only a few changes are certain, the rest are still not confirmed.”

The government’s policy paper ‘Smarter Regulation to Grow the Economy’ which it published in May, sets out the direction of travel with changes to three elements of employment law.

First up is Working Time Regulations, where the proposal is to remove retained EU case law requiring businesses to keep records of working hours for their staff.

Stuart Wright, consultant at Burnley based Cube HR, says: “It is estimated in the policy paper that this will save businesses overall £1bn per year.

“In reality I suspect that many businesses don’t currently keep these records anyway and those who do are in sectors which are heavily regulated and will still require accurate record keeping going forward, so for many it will simply be a case of business as usual regardless of the change.”

Another change to the regulations will see the introduction of ‘rolled up’ holiday pay in a bid to make dealing with the issue more straightforward. It’s a move that Stuart believes will be welcomed. He says: “For businesses with casual workers, workers on zero hours contracts and workers with irregular hours this will be beneficial.

“It will take away some of the current pain points around complicated calculations and ensure that workers receive what they are entitled to.”

There is also a proposal to change Transfer of Undertakings (Protection of Employment) regulations (TUPE) which relates to consultation with employees.

As the law currently stands, businesses cannot consult directly with employees if employee representatives are not in place.

The government is looking to consult on removing that requirement in cases where businesses employ fewer than 50 people or in TUPE transfers where fewer than 10 employees are affected.

Such a removal would enable the incoming employer to consult directly with affected employees.

Stuart says: “This proposal makes sense and removes a hurdle from an already complex area of employment law making it a slicker process for all concerned while still maintaining the obligation to consult and protect employee rights.”

The government has also set out its belief that non-compete clauses in employment contracts are at times, “unnecessarily burdensome” for employees, and, “limit the ability of businesses to compete and innovate.”

The intention is to put in place legislation which will limit any clauses to a maximum of three months. The government believes that will introduce a greater degree of flexibility, potentially allowing people to take a more lucrative job as well as enabling employers to recruit new talent more easily.

These aren’t the only pieces of employment law which are likely to change in the next 12 months  or so, though the timetable remains sketchy. Alison spells some of them out. She says: “Sometime in 2024, but we know not when, employees with caring responsibilities will be able to take one week’s unpaid leave from work per year. They need no qualifying service to have this right. We don’t know whether this will be a right to ask but not a right to have, or a right to have. Also sometime in 2024, any employer gathering tips or applying service charges must pay these to employees subject to deductions for tax and national insurance.”

The Protection from Redundancy (Pregnancy and Family Leave) Act 2023 is also set to come into force either this year or next.

This Act extends the existing length of protection from redundancy for mothers by a further six months to 18 months from the date of the baby’s birth. Employees using adoption leave also gain extended protection from redundancy to 18 months for one parent from the date they return to work post-adoption.

Moving forward to 2025, the Neonatal Care (Leave and Pay) Act 2023 will come into effect providing 12 weeks paid leave for parents of newborn children needing neonatal care.

Alison also points out other changes on the horizon. She says: “Making the right to request flexible working a day one right has had significant attention in recent months. We don’t know when this will come into effect, but the government has been clear that when it does, the legislation will remain a right to request flexible working and not a right to have.”

She says: “Although we know these changes are coming, there is work to be done on the detail of how they will be implemented and what the expectation of the employer is.”

Stuart adds: “At present employers should have all of these changes on their radar and be prepared to update existing policies or to create new policies as well as communicating with staff so that they are aware of what is altering and why.”

Victoria Mitchell, partner and head of employment law, Farleys, also calls on businesses to be prepared. She says: “Employers will need to be prepared to review employment contracts and procedures and amend them accordingly to ensure they are adhering to legislation.”

And she adds: “It is worth noting that many of the proposals will actually reduce administrative burdens on employers.”

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