Working Time regulations under threat as Govt stoke Bonfire of Workers’ Rights again

Government Announces Brexit Changes to Employment Law

10 May 2023| News

Trades unions have warned that workers’ rights are in danger again after the government unveiled new plans to scrap EU rules on working hours as part of its drive to cut “unnecessary red tape”.

In a policy paper published today, the Department for Business and Trade said it would remove retained EU law which include requirements for working hour records to be kept. Under current legislation, employers are required to keep these to ensure the 48 hours working time limit it adhered to.

The Government’s paper 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. Although the Government does not say this, it may result in the calculation of holiday pay reverting to an older method (i.e. excluding commission, overtime etc).

Allowing so-called ‘rolled-up’ holiday pay has technically been unlawful under EU law for many years, although the remedy for breach is limited if the rolled-up element is shown clearly on payslips.

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 remove this requirement for businesses with fewer than 50 people and transfers affecting less than 10 employees, allowing firms to consult directly with employees.

Calling the changes “Smarter regulation unveiled to cut red tape and grow the economy”, the Government unveiled a package of regulatory reform which they claim would:

  • Reduce burdensome red tape and tailoring rules to suit the UK economy could save employers around £1 billion a year
  • Be the first of a series of announcements taking advantage of the UK’s post-Brexit regulatory freedoms

On the GOV.UK site, they outlined the changes, described ad “the first dynamic package of deregulatory reforms to grow the economy and cut costs for businesses and support consumers”:

“Taking advantage of post-Brexit freedoms, the Government will remove unnecessary red tape and regulatory burdens, ensuring rules and regulation for British businesses is proportionate and takes into consideration wider impacts on consumers, innovation and competition – as well as direct costs.

Today’s package is the first of a series of deregulation announcements expected this year and is focused on delivering benefits to business. The reduced reporting requirements could save employers over £1 billion per year.

This will help to deliver on the Government’s priority to grow the economy and is a down payment on the UK’s ambition to have one of the most innovative and agile regulatory regimes in the world.

Today’s package includes:

  • Reducing the business burden. We will reduce time-consuming and disproportionate reporting requirements for specific elements of the Working Time Regulations, while retaining the 48-hour week requirement and upholding our world leading employment standards. This could save employers around £1bn a year. We are also simplifying regulations that apply when a business transfers to a new owner.
  • Ensuring regulation is, by default, the last rather than first response of Government by reforming the Better Regulation Framework. The new, smarter framework will ensure future regulation of our changing economy is streamlined, minimises business burdens, and puts forward-looking regulation at the heart of Government decisions.
  • Improving regulators’ focus on economic growth by ensuring regulatory action is taken only when it is needed, and any action take is proportionate. Following Professor Dame Angela McLean’s review of the regulators’ Growth Duty, the government intends to consult on refreshed guidance on how regulators deliver their growth duties. The government will also consider the merits of commencing statutory reporting and how best to promote growth with utilities regulators, who are currently not in scope of the Growth Duty.
  • Promoting competition and productivity in the workplace by limiting the length of non-compete clauses to three months, providing more flexibility for up to 5 million UK workers to join a competitor or start up a rival business after they have left a position. The change will also provide a boost to the wider UK economy, supporting employers to grow their businesses and increase productivity by widening the talent pool and improving the quality of candidates they can hire.
  • Stimulating innovation, investment and growth by announcing two strategic policy statements to steer our regulators. We are today publishing the first of these statements for consultation, on energy policy, which will be followed soon after by the Government’s strategic steer to the Competition and Markets Authority (CMA).”

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.”

Paul Nowak, general secretary of the TUC, called the proposed changes “a gift to rogue employers looking to exploit workers and put them through long, gruelling shifts without enough rest”.

On changes to holiday pay, which will see it calculated in a different manner from current EU law, he said: “The current law ensures that most holiday is paid in line with workers’ normal earnings, including regular overtime. Ministers shouldn’t be meddling with this.”

Unite general secretary Sharon Graham said the removal of working time recording requirements could lead to many workers working excessive periods at night:

“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.”