Employment law changes to look out for

Employment law is fast-moving and employers need to keep on top of regular changes to rules and entitlements.  In this blog, we look at a number of proposed and upcoming employment law changes.

Since the UK voted to leave the EU in 2016, questions have been asked about how our current employment laws will change, given the significant influence that the EU has had on this area of the law.

It has now been confirmed that the Bill known as the “sunset clause” will be abandoned.  This was the Bill which stated that almost all of EU-based law will be automatically revoked at the end of 2023, unless legislation was passed to expressly preserve it.  Legislation based in EU law will, therefore, remain binding in the UK unless it is expressly repealed. 

Against that backdrop, the government has recently announced a raft of proposed changes to employment law in relation to the Working Time Regulations and TUPE, both areas based in EU law.

The proposed changes are as follows:

  • The government is consulting on a proposal to allow employers to lawfully use “rolled up” holiday pay. “Rolled up” holiday pay is where employers include an amount for holiday pay in an employee’s weekly/monthly pay, based on hours worked, rather than it being paid when leave is taken. This has been unlawful under EU law for some time.  Rolled up holiday pay would be applied at 12.07% of hours worked, and would have to be clearly shown as holiday pay on the payslip.  This would solve a lot of difficult issues for employers who have staff working irregular or term time hours.
  • Combining “normal” holiday (the four weeks’ holiday that workers are entitled to each year, required under EU law) with “additional” holiday (the additional 1.6 weeks’ holiday that the UK give workers’ each year) so that workers have one 5.6-week annual holiday entitlement. This will not make much change in practice.
  • Removing the requirement for record keeping under the Working Time Regulations for working hours.
  • Amending the TUPE regulations so that there will be no requirement on the relevant employer to inform/consult appointed representatives when there are fewer than 50 employees in the business and fewer than 10 affected employees who are to transfer. If these conditions are met, relevant employers will be able to inform/consult the affected employees directly. This currently only applies to employers with fewer than 10 employees in total.

Other than the above changes (plus 2 other sets of minor regulations) the government has confirmed that current rights based in EU law will continue.  

Timescales for the above changes are uncertain and are subject to the ongoing consultation process – watch this space!

Amending EU law is not the only driver for change. Employers should be aware of the following additional changes on the horizon:

  • The government has announced its intention to introduce new legislation to restrict the duration of non-complete restrictive covenants to a maximum of three months (this will not affect non-solicitation or non-poaching clauses).   The employer will still need to show a proper business need for such a restriction.  This change is likely still some time away.
  • New legislation has been passed which will require employers to ensure all tips and service charges are allocated fairly between its workers. Employers will be required to comply with a Code of Practice and have a written policy on how it deals with tips. It is anticipated that this will come into effect in around one year’s time.
  • A new Act has been passed which creates a new statutory unpaid leave entitlement of one week in any 12-month period for employees who take time off to care for a dependant with a long-term care need. This will be a right for all employees, whatever their length of service. It is unclear when this will come into effect. However, it is unlikely to be before April 2024.
  • Important new legislation has been passed in relation to family friendly leave and we will cover this in more detail in our next blog.

If you would like to discuss any of the above further, please do not hesitate to contact our expert team of employment lawyers on employmentlaw@bto.co.uk or call us on Glasgow: 0141 225 5291 / Edinburgh: 0131 222 2951.

This update contains general information only and does not constitute legal or other professional advice.

Caroline Carr, Partner & Accredited Specialist in Employment Law: cac@bto.co.uk / 0141 221 8012 / Connect with Caroline on LinkedIn

Pauline Hughes, Solicitor: pah@bto.co.uk / 0141 221 8012 / Connect with Pauline on LinkedIn