*This post was written in May 2023, for the most up-to-date information on legislative changes under RUEL please see our member-support page https://www.cipd.org/uk/knowledge/employment-law/retained-eu-law-bill-employment-changes/

As the UK Government proceeds with post-Brexit regulatory reform, it has recently announced some key proposals to Working Time Regulations, TUPE and non-compete clauses. The government has not given an indication of the timeframe for implementing these proposals. 

Working Time Regulations

• Basic and additional holiday leave will be merged to create one annual leave entitlement. Merging the current basic entitlement of 4 weeks’ leave (originally an EU minimum) with the additional UK entitlement of 1.6 weeks’ leave will not affect the overall total entitlement. However, this is likely to result in holiday pay being calculated via the old method – excluding overtime and commission. Carrying over holiday from one leave year to another will also be affected as the current approach distinguishes between basic and additional leave. 
• ‘Rolled-up holiday pay’, previously unlawful under EU case law, will be introduced with the aim of reducing the complexity of calculating holiday pay. 
• The requirement to keep records of employees’ working hours, a retained EU case law, will be removed. Employers must still comply with record keeping for National Minimum Wage purposes. 

The Business Secretary Kemi Badenoch has announced that the government will consult on further changes to the Working Time Regulations. The consultation will close on 7 July 2023. 

TUPE 

• The UK Government plans to consult on removing the requirement to elect employee representatives when the organisation has fewer than 50 employees and transfers affecting fewer than 10 employees. This means that employers can consult directly with the employees affected and is likely to apply only in cases where part of a business and not an entire business is transferred. 

Non-compete clauses 

• The UK Government intends on limiting the length of non-compete clauses to three months. The three-month limit will not apply to other post termination restrictions such as garden leave clauses, or restraints limiting employees from dealing with previous clients or poaching staff, although the length of all restraints must be reasonable. Until the law is passed employers can continue including non-competes exceeding three months in their employment contracts but may wish to consider alternatives given that the law will change eventually. 

While the so-called ‘sunset clause’ in the Retained EU Law (Revocation and Reform) Bill (where all EU legislation, unless expressly retained, would be automatically revoked on 31 December 2023) has been abandoned, the UK Government has confirmed that some EU based statutory instruments will be repealed on 31 December 2023. The list outlining these statutory instruments does not include any significant pieces of employment legislation, but does include The Posted Workers (Agency Workers) Regulations 2020. 

In addition to these changes the UK Government have announced the Employment (Allocation of Tips) Act 2023 and a future Code of Practice likely to be effective from Spring 2024. This requires employers to have a written formal policy on dealing with tips, and to ensure all tips and service charges are allocated fairly between workers. Employers must also retain records of all tips and service charges received for three years and the enforcement provisions include ordering the employer to pay tips and compensation of up to £5,000 per worker to reflect additional financial losses subject to a 12-month limitation period. 

Keep up to date with the latest developments on our timetable of recent and forthcoming legislation.