Legal Reforms in the UK: Clarity or Chaos for Employers on the Horizon?

In the wake of the Retained EU Law (Revocation and Reform) Act 2023 (REUL Act) the UK Government has published draft regulations, with which employers will need to get to grips quickly as many of the new rules come into force on January 1, 2024.

The new regulations aim to 1) address key areas of employment laws the Government considers ripe for reform following Brexit and 2) restate or reproduce certain EU derived laws and principles to ensure employment rights in those areas are maintained.

We provide an overview to these new regulations below and the detail of the changes over a series of articles, linked below:


Employment reform

As we reported, the Government previously identified and consulted on three main areas of retained EU employment law, relating to working time records, holiday and TUPE information and consultation requirements, where it saw opportunities for improvement following the UK’s exit from the EU.

The Government has now published its response, alongside draft regulations and is making the following legislative changes:

  1. Significant changes to the rules on holiday in the Working Time Regulations 1998 (WTR), including an entirely new holiday regime for irregular hours workers and part-year workers.
  2. Minor clarifications to simplify the record-keeping requirements under the WTR.
  3. Minor changes to Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) to the requirement to appoint representatives for information and consultation obligations in respect of small businesses and where there are a small number of employees transferring.

The draft Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023 (Employment Rights Regulations) address each of the above areas and is due to come into force on January 1, 2024 (although a couple of provisions have slightly later dates of application in 2024). We discuss the developments in respect of points 2 and 3 below.

Equality Act changes

The Government has also identified discrimination rights and protections from EU derived discrimination case law that it wishes to save from the grasp of the REUL Act and enshrine in legislation. The rights being codified relate to technical areas of discrimination law. The Government has not consulted on these regulations as it considers that the amendments simply serve to reproduce the effects of retained EU law – and not to introduce new policy change.

The draft Equality Act 2010 (Amendment) Regulations 2023 will amend the Equality Act 2010 and are due to come into force on January 1, 2024.

TUPE reforms

The Government will proceed with the planned reforms to TUPE to extend the limited circumstances where employers can consult with employees directly.

Under current law, in advance of a TUPE transfer, organizations must inform and consult with the affected workforce’s existing employee representatives or arrange elections for representatives. The only exception to this is for microbusinesses with fewer than 10 employees who can inform and consult with employees directly where there are no employee representatives in place.

The proposed amendments will permit employers to inform and consult with employees directly where there are no existing employee representatives in place in the following circumstances:

  1. For small organizations with fewer than 50 employees when there is a transfer of any size, and
  2. For organizations of any size when there is a transfer of fewer than 10 employees.

The reforms will not change the existing substantive requirements to inform and consult on TUPE transfers, instead merely expand the circumstances in which representatives do not need to be appointed.

While the Employment Rights Regulations come into force on January 1, 2024, the changes to TUPE will apply to TUPE transfers taking place on or after July 1, 2024.

We anticipate that this will be welcome by small organizations or those doing small transfers. Unfortunately, however, this is only a minor change, and many employers would have welcomed more of an overhaul given TUPE’s complexity. The Government in its consultation response has noted the remaining complexity of some of these issues (for example, the questions of whether an individual’s employment can TUPE-transfer to more than one employer and clarification around its application to workers) but has chosen to keep a watching brief before taking any action.

Record keeping requirements under the WTR

The Government also proposed in its consultation to clarify the record-keeping requirements for employers under Regulation 9 of the WTR.  The Government has proceeded with its consultation proposals and the Employment Rights Regulations clarify that the obligation on employers is to keep adequate records to show compliance with certain limits (e.g., 48-hour average weekly working limit, etc.) and that employers may create, maintain and keep such records in such manner and format as the employer reasonably thinks fit. Employers need not record each worker’s daily working hours if they are able to demonstrate compliance without doing so. These rules apply from January 1, 2024.

Note that these rules are not to be confused with the separate obligation on employers to keep certain records to demonstrate compliance with national minimum wage rules.

If you wish to read more about the REUL Act too – please see our previous articles here and here.

Note the relevant provisions in both sets of new regulations apply to Great Britain (England, Wales and Scotland) only as employment law is devolved to Northern Ireland.

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.