Under the Retained EU Law (Revocation and Reform) Bill, come the stroke of midnight on 31 December 2023, all EU-derived laws were to be automatically expunged from the statute books, unless expressly saved or replaced beforehand.
In practice, that would have meant much of the UK’s Employment law being revoked. So New Year’s Day 2024, would, by default, have heralded a brave new – fairly lawless - industrial relations landscape in the UK.
A change of approach was widely expected (and perhaps inevitable), but Employment lawyers the land over still breathed a huge sigh of relief when the Government recently confirmed its decision to remove the so called “sunset clause” from the Bill.
The Bill will still bring an end to the days of EU law trumping domestic law, but any reforms to UK Employment law will, thankfully, be done on a more reasoned and specific basis, rather than by default.
And wasting no time, on 12 May 2023, the Government published its “Retained EU Employment law reforms” consultation. A paper containing its proposals on a few particularly thorny areas; the first one being the Working Time Regulations 1998.
The law governing holiday pay has been hideously complicated for a while. Mainly because our statutory minimum period of 5.6 weeks’ holiday actually derives from two different sources: 4 weeks’ derive from EU law, and the other 1.6 weeks’ derive from UK law.
So different rules govern the different types, which is not ideal. Plus, the supremacy of EU case law has often led to jarring results that make things difficult to manage in practice, particularly with the rise of irregular working patterns in the UK.
So it’s fruit that’s both low hanging and extremely ripe for reform – and the proposed changes are:
All positive stuff, and certainly a step in the right direction.
But there are still tricky areas left untouched, such as the difficulties arising from British Airways plc v Williams and Lock v British Gas Trading Ltd. A case which held that commission, regular overtime and other allowances ought to be included in holiday pay calculations – and which left employers with a real headache as to how to actually run the relevant calculations. The consultation offers no way forward in that regard, but it does canvass views.
The second area tackled by the consultation paper is TUPE. In attempting to simplify the TUPE process, the Government proposes to:
Again, good common-sense stuff.
But considering TUPE is derived solely from EU law (and the UK actually gold-plates the relevant EU Directive compared to many countries), it is a fairly modest tweak. It’s also a missed opportunity to provide some much-needed clarity on post-transfer harmonisation of terms and conditions – an area that often vexes employers.
On 12 May 2023, the Government also announced proposals in relation to non-compete restrictions. This follows up on a 2020 consultation on potential reform to this area.
And the big news? Non-compete restrictions in Employment Contracts are to be limited in duration to 3 months post-employment.
The change is proposed to take place “when parliamentary time allows”, and so there is no set timetable. And it is limited to blanket non-compete restrictions (i.e. “though shall not work for a competitor for [X] months post-employment”).
These types of restrictions are always tricky to enforce anyway. Common law principles provide that any post-employment restriction is only enforceable to the extent it represents a reasonable and proportionate means of protecting a legitimate business interest. In practice, blanket non-competes are often too broad to meet that test.
So they are often accompanied by more specific and focussed covenants, such as non-solicitation, non-poach and/or non-deal restrictions relating specifically to clients and/or employees. The increased specificity of those restrictions, and the fact that the “legitimate business interest” is readily identifiable (i.e. the employer’s client base and/or workforce) makes them easier to enforce.
These more specific (and enforceable) restrictions will not be affected by the change. Also, it appears that non-compete restrictions contained in other documents such as Shareholders’ Agreements, Partnership Agreements, and the like won’t be affected. The change only applies to employment or worker contracts.
So whilst seemingly dramatic on the face of it, the change in practice may have fairly limited impact. That said, it is worth reviewing Employment Contracts and Service Agreements ahead of time to ensure that appropriate protections are in place.
In addition to the above, on 24 May 2023, Royal Assent was granted in relation to the Neonatal Care (Leave and Pay) Bill, the Carer’s Leave Bill, and the Protection from Redundancy (Pregnancy and Family Leave) Bill.
Together these provide a number of increased family-friendly protections, including:
The timetable for the introduction of neonatal leave and pay is likely to be April 2025, with the unpaid leave for carers being “in due course”, but unlikely to be before April 2024. The tweaks to redundancy protections, again, will be made “in due course”, but could be within the next few months.
