Proposed Employment Law Changes
Alan Kitto
This week, the Government made an announcement regarding the abandonment of a Bill that would have automatically revoked legally binding EU legislation in December 2023. Instead, all existing EU legislation will remain in effect unless specifically repealed.
Furthermore, the Government stated its intention to repeal the following regulations on December 31st, 2023:
The Community Drivers' Hours and Working Time (Road Tankers) (Temporary Exception) (Amendment) Regulations 2006.
The Posted Workers (Enforcement of Employment Rights) Regulations 2016.
The Posted Workers (Agency Workers) Regulations 2020.
These repeals are expected to have minimal impact on the majority of companies.
Additionally, the Government plans to introduce changes to the Working Time Regulations and the Transfer of Undertakings (Protection of Employment) (TUPE) Regulations.
Regarding the Working Time Regulations, the proposed change involves merging "normal" holiday leave with "additional" holiday leave into a single entitlement. Currently, "normal" leave consists of four weeks, while "additional" leave adds a further 1.6 weeks. Although not explicitly stated, this may result in holiday pay calculations reverting to the previous method, which does not consider factors such as commission, overtime, or allowances.
Furthermore, the reintroduction of "rolled-up" holiday pay will be permitted, as long as the rolled-up portion is clearly indicated on payslips. Employers will no longer be required to maintain records of working hours, although few were doing so in practice.
The changes to the TUPE Regulations mainly involve the requirement for consultation with appointed representatives. This requirement will be eliminated for employers with fewer than fifty employees and fewer than ten transferees. However, individual consultation with affected employees will still be mandatory.
No specific timelines have been announced for these changes, but since they can be implemented without primary legislation, they could be enacted relatively quickly.
In a separate development, the Government expressed its intention to introduce new legislation limiting non-compete restrictive covenants to a duration of three months following the effective date of termination. This limitation will not affect non-compete restrictions during the notice period or garden leave, nor will it impact other types of restrictions, such as non-solicitation or non-poaching of clients or employees.
Implementing this change will require primary legislation, and the timing will depend on the availability of parliamentary time, which may be uncertain.
Finally, the Employment (Allocation of Tips) Act 2023 has received Royal Assent and is expected to come into effect in approximately one year. In summary, this legislation requires employers to ensure fair allocation of tips and service charges among their workers (note: workers, not employees). The term "fairly" is not explicitly defined, but employers must consider a Code of Practice that is currently being developed and will be subject to consultation in due course.
The Act also mandates employers to have a written policy outlining their approach to handling tips. They must retain records of all tips and service charges received for a period of three years.
The enforcement provisions of this Act are noteworthy. Firstly, there is a 12-month limitation period for litigation, rather than the previously mentioned three months. Secondly, tribunals have the authority to compel employers to revise their tip allocation policies. Thirdly, tribunals can order employers to distribute tips and service charges not only to the claimant but to any workers employed by the employer. Finally, there may be compensation of up to £5,000 per claimant to account for additional financial losses caused by non-payment.
For further information on this or any other HR-related matter, please do not hesitate to contact us.