The Department for Trade and Business has recently published its policy paper headed “Smarter Regulation to Grow the Economy”, which contains some proposed changes to the Working Time Regulations 1998 (WTR) and TUPE Regulations (TUPE) and kick starts a consultation process. The Retained EU Law Bill which is currently working its way through Parliament originally contained a so called “sunset clause”, meaning that all EU retained law would be automatically revoked at the end of 2023. It looks like this is no longer going to happen and the Government is instead looking at reviewing individual areas of law on a case-by-case basis. This consultation is starting that process in the realms of employment law. The consultation confirms that the Government is not intending to weaken workers’ rights and that the vast majority of retained EU employment law is to be preserved. There are two areas initially however where the Government considers reform would be beneficial, as follows:
1. The Government believes that the record keeping obligations as interpreted by the ECJ, under the WTR, are disproportionate and it proposes amending them to remove any legal requirement for businesses to keep a record of the daily working hours and rest time of their workers, as is currently the case.
2. Combining basic and additional leave under the WTR – workers are entitled to a total of 5.6 weeks of paid annual leave. This comprises what is known as Regulation 13 annual leave, being the four weeks required by the Working Time Directive itself and an additional 1.6 weeks known as Regulation 13A leave. This is additional leave that the UK affords beyond the minimum requirements. The Government considers that these two separate leave entitlements can cause confusion, especially when ECJ decisions are made about holiday pay for example which rulings technically only apply to Regulation 13 leave, not the additional leave. This has created huge complexity in terms of what rate holiday should be paid at, what happens when somebody is on sickness absence or maternity leave, and whether holiday can be carried over into the subsequent holiday year for example.
The proposals are therefore to create a single leave entitlement of 5.6 weeks with clarification of the minimum rate of holiday pay which counts as so called “normal remuneration”, as well as a change in the method for calculating leave in the worker’s first year of employment. As far as the pay rate is concerned, the consultation seeks views on how holiday pay is currently calculated and how it could be improved.
Any streamlining or improvement in this area could undoubtedly be very beneficial as the rules are complex and there are a number of difficult areas, particularly with part-year workers, zero-hour workers and similar. The consultation acknowledges in relation to the latter that rolled up holiday pay is heavily used albeit technically contrary to EU law and the proposal is to allow rolled up holiday pay to be paid at 12.07% of pay for workers working irregular hours for example.
Where a TUPE transfer occurs there is an obligation to inform and consult which involves, for larger businesses, arranging elections for affected employees to elect new employee representatives. So called micro-employers with fewer than 10 employees can inform and consult the affected employees directly.
The proposal is to remove the requirement for elections for businesses with fewer than 50 employees or businesses of any size where the transfer itself involves fewer than 10 employees. In these situations, businesses can consult directly with employees if no existing employee reps are in place. There are no other changes proposed to TUPE consultation requirements at this stage. It is unfortunate that the difficulties around changes to terms and conditions is not being looked at, at this stage, but this could come further down the line.
The consultation remains open until the 7th July and you can be involved and make responses online using this link.
Whatever one’s views on Brexit, it is reassuring that the majority of EU derived employment law is being retained for the moment and a more measured approach is being taken to reviewing the same. There is good opportunity to look at improvements and sorting out some of the more complex areas, particularly with working time and it is to be hoped that these reviews will be thorough and provide a more unified and less complex system.
We will provide updates as we learn more of the developments in these highlighted areas and in the meantime if you would like more information about any of these matters or other employment law advice please do get in touch with one of the Employment Team.