The government is to remove the requirements for recording working time and reduce the complexity of calculating holiday pay, as part of plans to cut ‘unnecessary red tape and regulatory burdens’ post-Brexit.
It has also ditched its plan for thousands of EU-derived laws to expire automatically at the end of 2023. Instead, it will provide a list of laws that will be removed, after opposition parties and trade unions raised concerns about whether the deadline was realistic.
In a policy paper published today, the Department for Business and Trade said it would remove retained EU case law that impose requirements for working hour records to be kept. Currently, employers are required to keep these to ensure the 48 hours working time limit it adhered to.
It also proposes the introduction of rolled-up holiday pay, so that workers can receive their holiday pay with every payslip, and merging the current two separate ‘normal’ and ‘additional’ leave entitlements into one pot of statutory annual leave.
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The Transfer of Undertakings (Protection of Employment) (TUPE) Regulations will also be reformed. Currently, organisations cannot consult employees directly where they do not have employee representatives in place, and are required to elect new employee representatives. The government wants to change TUPE to remove this requirement for businesses with fewer than 50 people and transfers affecting less than 10 employees, allowing firms to consult directly with employees.
The length of non-compete clauses in employment contracts will be limited to three months, which the government said would give employees more flexibility to join a competitor after they leave an organisation.
The government plans to publish consultations on the proposed changes, none of which require changes to primary legislation.
Business and trade secretary, Kemi Badenoch said: “I have listened to the concerns of business of all sizes and have made it a priority to tackle the red tape that holds back UK firms, reduces their competitiveness in global markets and hampers their growth.
“We are taking back control of our laws after Brexit, reducing and improving regulation and giving businesses the freedom to do what they do best – sell innovative products, create jobs and grow the economy.”
Tina McKenzie, policy chair at the Federation of Small Businesses, said: “For years and under all governments, well-meaning ministers have reached to create new regulations in response to issues. This is then repeated under the next set of ministers – leaving us with a high cumulative burden for business to deal with.
“We are pleased to see a change of approach here, moving away from regulation as a first resort, alongside a reduction in administrative requirements that divert time away from running a business, and more of a focus for regulators on stimulating economic growth.”
However, Unite general secretary Sharon Graham, said the removal of working time recording requirements could lead to many workers working excessive periods at night.
She said: “The government’s so-called attack on red tape is nothing more than a boost for bad bosses and will pile more misery on workers.
“Removing the requirement for employers to record workers’ hours, means that the regulations effectively become unenforceable. Unscrupulous employers will use these emasculated regulations to exploit young or unorganised workers. Cutting red tape? More like a playbook for profiteering.”
Employment barrister Daniel Barnett said the proposed TUPE changes would have little impact.
“This is of limited impact, because of the existing micro-business exemption (meaning that consultation wasn’t required for businesses with fewer than 10 employees). So this means that where a business has between 10 and 49 employees, of whom 9 or fewer are transferring, they will also be exempted from the collective consultation rules. In reality, this can only apply where there is transfer of part of a business, not a whole business,” he said.
The Institute of Economic Affairs’ labour market expert, Professor Len Shackleton, said: “It is good to see the government taking some action to roll back employment regulation, which has increased dramatically in the last thirteen years despite occasional rhetorical criticism. Some of this was down to EU meddling, but more was down to domestic policies and it is good to see some reversal, however limited.
“Most economists agree that the cost of employment regulation does not ultimately fall on profits, but is passed on to consumers through higher prices and to workers in terms of lower pay than might otherwise be the case.
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“So, it follows that the estimated savings of £1 billion from regulatory reform will ultimately benefit a wider constituency than business owners. More of the same please.”
