Retained EU law to stay - but with some changes for UK employers

On 10 May 2023 the UK Government announced some important changes to employment law at the same time as reversing its previous approach to the EU laws retained after Brexit.

We reported on the Government's original proposals on EU law in September 2022 and last month provided an update that indicated that a change of direction might be in hand. 

That has now come to pass with what the Secretary of State for the Department of Business and Trade, Kemi Badenoch MP, described yesterday as a bid to provide greater certainty for business in the UK. In a written statement to the UK Parliament she announced that the Government is reversing its previous approach to the body of EU law that was retained on the UK statute book after Brexit.   Instead of automatically repealing all the laws that are not expressly kept, it has decided instead to keep all the laws that are not expressly repealed – at least for the time being. 

That will ensure that a large body of employment rights that are underpinned by EU law such as family rights, discrimination rights and rights on collective redundancies are fully preserved, for the moment. It is important to note that the Government's intention is to retain the right to reform EU derived law in the future, at a more measured pace, by ending the 'special status' the EU law has in the UK. Its ability to do so still needs to be brought into law, however.

For the present the Government has identified a number of employment measures that it does intend to change in the areas of holiday pay and TUPE:

Holiday pay 

The Government has announced that it proposes to 'introduce' rolled-up holiday pay and to bring to an end the differential treatment of the annual leave conferred under EU law and the additional leave provided by UK law. There will be a consultation on reform to the Working Time Regulations later this year.

Depending on the details, which have yet to emerge, employers are likely to welcome both these proposals. In reality rolled-up holiday pay is already deployed in many instances where there is no practical alternative, but employers are likely to respond positively to a reform that would mean that the practice will no longer be technically unlawful.

Records of working hours 

The consultation on reform to the Working Time Regulations will also repeal the effect of a judgment of the European Court of Justice that appeared to impose a requirement on all employers to keep records of working hours for most of their workforce. To our knowledge, UK employers have not made significant efforts to comply with this ruling and we are not aware of any UK court or tribunal challenges to UK employers for failing to do so. Nevertheless, the clarification that there will be no legal requirement to comply is likely to be welcome.

TUPE consultation

The Government is proposing to loosen the requirement for the election of employee representatives in some business transfer situations. At present there is a requirement in all but the smallest businesses (those with fewer than 10 employees) to elect representatives to receive information and consult on likely measures that will affect the workforce (unless there are union or other representatives already in place). The Government proposes that businesses with fewer than 50 staff and transfers affecting fewer than 10 employees will benefit from exemptions that enable them to inform and consult with workers directly without the need to elect representatives. 

No further details of any of these proposals are available at present, but we will keep you updated.