The Government have made some recent announcements with regard to changes to Employment Law in the future. We provide a brief summary below:
TIPS AND SERVICE CHARGES
The Employment (Allocation of Tips) Act 2023 requires employers to ensure all tips and service charges are allocated fairly between its workers (not just employees).
‘Fairly’ has not been defined, so will be open to interpretation; but employers will have to have regard to a Code of Practice.
The Act has received Royal Assent, but the commencement date has not been announced. The indication is that it will be in about one year’s time. The code of practice is being developed; and should be put out to consultation in due course.
THE RETAINED EU LAW (REVOCATION AND REFORM) BILL
In our Information update 2023/02 dated 13th January 2023 we reported that The Retained EU Law (Revocation and Reform) Bill (‘the Bill’), proposed a complete overhaul of retained EU employment law by 31st December 2023, with the option to extend this period until June 2026; but excluding any laws in Northern Ireland that derive from the EU.
As the Bill is currently drafted, almost all EU law is automatically revoked at the end of 2023, unless a statutory instrument is passed to preserve it.
The Government has announced that it is abandoning the sunset clause in the above Bill. This means that EU law will remain binding in the UK unless it is expressly repealed. The Bill will be amended to contain a list of the retained EU laws that the Government intends to revoke on 31 December 2023 – but anything not on that list will remain valid.
OTHER CHANGES
The Government has announced its intention to make some important changes to aspects of employment law now that the UK has left the EU.
Working Time Regulations1998
The Government are proposing:
- Merging ‘normal’ holiday leave with ‘additional’ holiday leave, to create one entitlement.
‘Normal’ holiday leave is the 4 weeks’ holiday entitlement derived from the Working Time Directive; and the ‘additional’ holiday entitlement is the additional 1.6 weeks that the UK added subsequently, which is incorporated into the UK’s Working Time Regulations 1998. Given that currently different rules can apply to the two different types of holiday, this proposal would result in one minimum holiday entitlement, simplifying the rules.
Although, the Government does not say this, it could also result in a reversal of the calculation of holiday pay rules (i.e. reverting back to the olden days when you could exclude commission, overtime etc. – but we shall have to wait and see).
2. Allowing ‘rolled-up’ holiday pay.
This has been technically unlawful under EU law for some years, although the remedy for breach is limited if the rolled-up element is shown clearly on payslips.
3. Removing the requirement for record-keeping under the Working Time Regulations
for working hours.
Employers may have maintained records of hours worked for other reasons, namely payroll purposes; it is unlikely that many employers will have maintained records because of this legislation.
Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE)
4. Removing the requirement to consult with appointed representatives when there
are fewer than 50 employees in the business; and fewer than 10 transferees.
Because of the existing micro-business exemption (consultation is not required for businesses with fewer than 10 employees) this has limited impact. Therefore, 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.
No timetable has been announced. None of the changes require primary legislation, so it could be done fairly quickly.
