New plan for EU laws revealed

The Government has reversed its approach to the EU law review which it was to undertake to remove EU derived laws from the law books in consequence of Brexit.

The original plan was to review all EU-derived laws and decide whether to keep them or not. Any laws not to be kept would automatically expire on 31 December 2023. The Government has faced mounting pressure to withdraw this controversial Bill ever since, and with the sunset deadline fast approaching with seemingly little movement on the legal review that was due to be undertaken, the Government was running out of time to act.

On 10 May 2023, Business and Trade Secretary, Kemi Badenoch, announced the U-turn with the removal of the controversial “sunset clause” which could have seen the automatic expiry of thousands of laws.

This has been replaced by a single list of the retained EU laws that the Government intends to revoke under the Bill. There are no major employment laws on that list.

However, the Government has proposed to make amendments to employment laws. The changes are:

• Removal of some record keeping requirements under the Working Time Regulations 1998.
• Simplifying annual leave and holiday pay calculations in the Working Time Regulations 1998.
• Consultation requirements under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE).

Record keeping requirements

The Government proposes to remove the requirement for employers to keep records on workers’ daily working hours. The obligation to record weekly working hours for those workers who have not opted out of the 48 hour average working week will remain.

Annual leave

Currently, the minimum entitlement of 5.6 weeks’ annual leave is divided into two elements: 4 weeks’ EU leave and 1.6 weeks’ domestic leave. Different rules apply to both e.g. the 4 week EU leave cannot be carried over to a subsequent leave year unless the worker is on long term sick leave or on maternity leave; individual results based commission only needs to be factored into holiday pay for the 4 week EU leave. The Government proposes to merge both elements into one pot for consistent treatment of all 5.6 weeks.

A further proposal on annual leave is to re-introduce rolled up holiday pay. This practice has long been considered unlawful because it is argued that it discourages workers from taking annual leave. A worker who receives rolled up holiday pay will have an extra amount added on to their normal hourly pay as holiday pay; when they take annual leave, they do not get paid.

TUPE

The current exemption for microbusinesses from the requirement to consult with employees about a transfer through elected employee representatives will be extended to businesses with fewer than 50 employees who are dealing with a TUPE affecting fewer than 10 employees. This means that those businesses newly within the scope of the exemption will not need to elect representatives and will be able to consult on an individual basis.

Because the sunset date has been removed, there is little information available now on the intended timeline for these changes. The consultation on the changes will run until early July; it is expected that more information on the progress of these proposals will emerge in summer time.