Littler Global Guide - United Kingdom - Q2 2023

Browse through brief employment and labor law updates from around the globe. Contact a Littler attorney for more information or view our global locations.

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Retained EU Employment Law Reform

New Legislation Enacted

Authors: Stephanie Compson, Professional Support Lawyer, and Raoul Parekh, Partner – GQ | Littler

The Retained EU Law (Revocation and Reform) Act (the Act) has now been passed. It aims to end the special status of retained EU law - a category of domestic law, consisting of certain EU-derived laws that were preserved in UK law post-Brexit by the European Union (Withdrawal) Act 2018. Some of the Act is now in force, other parts come into force following a two-month period or take effect from the end of 2023.

The impact of the Act on retained EU employment law will have to be awaited until it is put into practice but will not likely be immediate. The UK government has, however, released a policy paper and consultation which confirmed: 1) the vast majority of retained EU employment laws will be preserved where it is “not either consulting on reforms or revoking legislation that is now irrelevant,” and 2) some modest retained EU employment law reforms to remove unnecessary red tape or complexity. These specific reforms are currently limited to Great Britain (England, Wales and Scotland) and to areas in respect of working time, rules regarding vacation, consultation requirements under the Transfer of Undertakings (Protection of Employment) Regulations and limiting the length of post-employment non-competes. For additional discussion on this subject, please read “Proposed Law May Change the Future of UK’s Employment Law” and “UK: Proposals to limit post-employment non-compete clauses to 3-months in length,” below in this quarter’s UK edition.

New Employment Law Bills Receive Royal Assent

New Legislation Enacted

Authors: Hannah Drury, Trainee Solicitor, and Raoul Parekh, Partner – GQ | Littler

Four key employment law bills received Royal Assent in May 2023, resulting in four new acts. These are: 1) the Carer’s Leave Act 2023, 2) the Protection from Redundancy (Pregnancy and Family Leave) Act 2023, 3) the Neonatal Care (Leave and Pay) Act 2023, and 4) the Employment (Allocation of Tips) Act 2023. We provided a more detailed overview of the first three of these Acts in our Q4 2022 and Q1 2023 updates. Each Act requires further regulations to confirm the scope of the applicable statutory leave and the relevant protections. Until these regulations are introduced and come into force, no immediate action needs to be taken by employers.

The Employment (Allocation of Tips) Act 2023 is not expected to come into force until May 2024. This act creates a legal obligation for employers to allocate qualifying tips, gratuity and service charges fairly between workers and any eligible agency workers. Employers will need to put in place a written policy and maintain records of how qualifying tips have been allocated to workers, depending on the frequency of receipt of these tips. Workers will have a right to complain to the employment tribunal if tips have not been allocated correctly, or if the employer has failed to comply with their obligations to have a written policy or maintain records. No immediate action needs to be taken until this act comes into force. For additional discussion on this subject, please read “Protection from Redundancy (Pregnancy and Family Leave) Bill,” “Carer’s Leave Bill,” and “Proposed Statutory Leave and Pay Entitlements for Parents of Babies Requiring Neonatal Care.”

UK Considering New Data Protection and AI Legislation

Proposed Bill or Initiative

Authors: Deborah Margolis, Senior Associate, and Raoul Parekh, Partner – GQ | Littler

The UK government is consulting on its approach to the future regulation of AI. It is not currently proposed that new legislation will be introduced and instead the proposed approach relies on collaboration across government, regulators and businesses. The European Parliament has also just voted to approve the first draft of the new AI Act, the world’s first comprehensive law regulating AI. Although the UK is no longer part of the EU, implementation of the AI Act is anticipated to have extra territorial effect, which could impact UK businesses that fall within scope.

With regards to data protection, following the UK’s departure from the EU, the UK government is seeking to reform its data protection laws. The Data Protection and Digital Information (No. 2) Bill is currently making its way through the parliamentary process. The content of the bill is still being negotiated but its objective is to simplify the existing obligations required under the UK GDPR (the retained EU law version of GDPR) and to remove some of the “red tape” required for businesses to comply with the existing obligations under the UK GDPR.

Proposals to Limit Post-employment Non-Compete Clauses to Three Months in Length

Proposed Bill or Initiative

Authors: Lisa Coleman, Senior Associate, and Raoul Parekh, Partner – GQ | Littler

The UK government, on May 10 and 12, 2023, announced its intention to limit the length of post-employment non-compete clauses (i.e., restrictions prohibiting an employee from going to work for a competitor or to start a rival business after they have left employment) to just three months. It is proposed that only these specific clauses in employment contracts (or certain worker contracts) will be affected; other forms of contract (e.g., partnership, LLP and shareholder agreements) and other clauses (e.g., confidentiality clauses, other post-termination restrictions, notice and garden leave provisions) are all outside the scope of the proposals. It is currently unknown when the legislation to affect these proposals will be introduced, only that it will be “when parliamentary time allows.” It is also anticipated that the limits will apply to Great Britain (England, Wales and Scotland).

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.