Government Responds to Consultation on Employment Law Reforms

News  |   23 November 2023

Written by
Lydia Button, Trainee Solicitor

The UK government has recently released its response to the Consultation on ‘Retained EU Employment Law’, unveiling proposed reforms that encompass the calculation of annual leave, holiday pay, and record-keeping requirements under the Working Time Regulations 1998 (WTR), as well as changes to the consultation requirements under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE).

The response also addresses concerns raised in the wake of the Supreme Court’s decision in Harpur Trust v Brazel 2022 ICR 1380, signalling significant shifts in employment law.

Key reforms:

Annual Leave and Holiday Pay Calculation

  • The government plans to implement ‘rolled-up’ holiday pay for irregular hours and part-year workers, providing them with an additional amount of enhancement to their regular pay instead of paying separately for annual leave.
  • An annual leave accrual method of 12.07% of hours worked is set to be introduced for irregular hours and part-year workers from 1 January 2024, a move designed to simplify calculations and align with pre-Harpur Trust practices.
  • A specific amendment sets 31 March 2024 as a backstop for the carry-over of leave under the Covid-19 provisions as outlined in the regulations.

Record-keeping Requirements under WTR

  • The proposed changes to WTR record-keeping requirements aim to provide clarity to businesses. Notably, the clarification specifies that daily working hours need not be recorded, addressing concerns arising from the European Court of Justice’s ruling in Federación de Servicios de Comisiones Obreras (CCOO) v Deutsche Bank SAE 219 IRLR 753.

TUPE Consultation Obligations

  • Changes to TUPE consultation obligations include permitting small businesses (with fewer than 50 employees) to consult directly with employees in the absence of existing representatives. Additionally, businesses of any size can directly consult with employees in cases of transfers involving fewer than ten employees.

Harmonisation of Annual Leave Entitlements

  • While the government has decided against merging the ‘basic’ and ‘additional’ annual leave entitlements into a single entitlement of 5.6 weeks, it will legislate to restate EU case law ensuring the carry-over of annual leave workers on maternity/family-related leave or sick leave.

The government’s response to the consultation on retained EU employment law reflects the strategic approach to balance simplicity and clarity in employment regulations. While maintaining distinctions between various types of leave, the reforms aim to streamline calculations, reduce administrative burdens, and provide greater flexibility for businesses, particularly in TUPE transfers and record-keeping requirements. As the proposed changes take shape, employers and employees alike will need to adapt to the evolving landscape of UK employment law.

For further information and to speak to a member of our Employment team, please call us on 020 8290 0440.

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