Government announces employment law changes to boost economy

The government has unveiled a series of employment law reforms aimed at boosting the economy and reducing costs for businesses.

The measures include changes to the Working Time Regulations 1998, the Transfer of Undertakings (Protection of Employment) Regulations (TUPE), and non-compete clauses.

The measures are set out in the policy paper ‘Smarter Regulation to Grow the Economy’, published by the Department for Business and Trade. 

The paper is part of the government’s attempt to improve regulation following the country’s departure from the EU while maintaining labour standards.

Ministers will now consult on removing retained EU case law that requires businesses to keep working time records for almost all members of the workforce.

The proposals also include introducing ‘rolled-up holiday pay’ and merging ‘basic’ and ‘additional’ leave entitlements under the Working Time Regulations into a single entitlement to annual leave, with the same amount of leave entitlement overall.

In relation to TUPE, the government intends to remove the requirement for businesses with fewer than 50 employees to elect employee representatives for TUPE consultation, allowing businesses to consult directly with the affected employees.

The paper notes that non-compete clauses can play an important role in protecting businesses that invest in their staff, but that unnecessarily burdensome clauses have become a default part of too many employment contracts.

In the Government’s view, this can inhibit workers from looking for better paying roles and limit the ability of businesses to compete and innovate. The Government therefore intends to legislate to limit the length of non-compete clauses to three months.

It estimates that this change will affect up to 5 million UK workers. This legislation will be introduced ‘when Parliamentary time allows’.

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