Upcoming changes to employment law after Brexit
Since the UK left the EU in January 2020, some changes to employment law are on the horizon.
Currently, UK employers are entitled to four weeks of holiday (which has its roots in EU law) and an additional eight days (which relate to the standard UK bank holidays). These two separate allowances are set to be merged into one amount of annual leave, expressed as 28 days per year. This would be pro-rata for part-time employees and therefore may also be expressed in hours. The total amount of holiday entitlement will not change. However, rules about issues such as rescheduling holiday due to illness, what sort of payments are included in holiday pay and whether holiday can be carried over may be amended. This is because holiday can be treated differently depending on whether it is part of the standard 20 days or the additional eight days. If such a distinction is no longer made, the rules will need to be clarified.
Rolled up holiday pay
Rolled up holiday pay is when employees do not actually receive any holiday, but instead are paid an extra amount of pay (around 12% extra) for each hour that they work, in order to reflect the amounts they would have been paid should they have taken holiday. Many employers find this useful for workers with irregular hours, as calculating holiday allowance on average hours and scheduling time for it to be taken can be administratively difficult. Rolled up holiday pay has technically been unlawful for a while, although if the payments are itemised separately on payslips as ‘holiday pay’ and the employee has not lost out financially, an employee would be unlikely to have a substantial claim.
It now seems that rolled up holiday pay may be allowed again, perhaps not for all workers but probably for those with irregular hours.
Rules regarding recording working hours under the Working Time Regulations may be relaxed
However, other records such as those relating to national minimum wage, will still have to be kept.
Small businesses, and/or those carrying out transfers which affect only a small number of employees, may be able to consult directly with affected employees during a TUPE transfer, rather than needing to have representatives in place.
Non-compete clauses will be limited
Non-compete clauses are restrictions in contracts of employment which try to prevent ex-employees from competing with a business once they have left your employment. It can be very difficult to make employees cooperate with such clauses, and they should not be any more restrictive than necessary, so that they are more likely to be enforced by a tribunal, should they be questioned.
Over the last few years, the government has considered abolishing these clauses altogether or making them valid only when the employer offers some sort of financial compensation during the period of restriction. However it has now been decided that the length of time when the employee can be bound by a non-compete clause will be limited to three months.
Rules relating to other types of post-termination restrictions, such as those which stop an employee from poaching clients or staff, will not change.
It is currently not clear how this will apply to non-compete clauses which will have been signed before this new legislation becomes valid.
Sunset clause revoked
The so-called sunset clause of the Retained EU Law Bill would have meant that thousands of laws which were originally derived from the EU automatically disappeared from UK law at the end of 2023 unless a conscious decision was made to keep each one. The government has now backtracked on this, and decided instead to state which ones will be revoked, and to automatically keep the rest.
Of the laws that will be repealed, only a few relate to employment law and these are only anticipated to bring minor changes to a small minority of the workforce.
We will keep you updated on all of the above.