Despite strong opposition from Labour to extend the deadline and exempt some employment legislation, the Government’s Retained EU Law Bill has been given final approval by MPs.
The Bill – a flagship reform under Liz Truss’s government – means that unless already reviewed, amended or renewed, thousands of EU laws would automatically expire at the end of 2023.
The Bill’s potential impact on employment legislation and the HR industry
If passed, the Bill could potentially change the whole employment landscape by allowing the government to change or remove retained EU law.
In a recent esphr poll of HR professionals, 84% were worried about the implications of the proposed Bill and were not sure how to prepare for it.
Our predictions on what could change
So, what could change and what could the implications be?
Whilst the Bill is expected to run into further opposition when it reaches the House of Lords, it’s important that HR professionals understand what changes could occur.
TUPE (The Transfer of Undertakings (Protection of Employment Regulations 2006)
TUPE Regulations exist to protect employees’ terms and conditions if the organisation they work for changes hands, or if the commercial contract they work on, or part of the organisation they work for, is transferred from one employer to another.
While TUPE was first introduced in 1981 as the UK’s implementation of the EU Acquired Rights Directive (ARD), many speculated that TUPE would be high on the list for deregulatory reform once it was possible following Brexit.
Our prediction? We don’t envisage much will change with TUPE. Some of the more complex rules may be tweaked, and possibly the small employer exemption for informing and consulting employee representatives may be increased from 10 employees to a higher number. The government may also make it easier to amend terms and conditions post-transfer, which is currently unlawful except in very limited circumstances.
Working Time Regulations: Holiday Pay Calculations
The Working Time Regulations contain little information on calculating holiday pay, instead referring to the calculation methods contained in the Employment Rights Act (ERA). However, the ERA has been ruled incompatible with EU law as far as holiday pay is concerned. The EU Working Time Directive provides a fundamental right for employees to receive their ‘normal’ remuneration should they work irregular hours or regularly receive bonuses or commission. This protects workers from being ‘penalised’ for taking annual leave.
It won’t all change, though, as the UK government has significantly enhanced the EU requirement of four weeks’ paid leave per employee to 5.6 weeks. It would be a very unpopular move if the government were to reduce this entitlement.
Our prediction? The minimum amount of annual leave (5.6 weeks) won’t change, but how you calculate pay for those 5.6 weeks is likely to change for many employees.
Working Time Regulations: Rest breaks and the 48-hour working week
The Working Time Regulations (WTR) are a now-familiar piece of legislation enacted in 1998, which enshrine many workers’ rights., including the right to paid annual leave and limits on working time, into UK law.
If the government were to amend rest breaks (currently 20 minutes after six hours’ work, a minimum of 11 hours’ rest from the end of one shift to the start of the next, or the right to 48 hours’ uninterrupted rest in any 14-day period), this would potentially have a much more significant impact on employees and organisations.
Our prediction? There may be changes to the limits on maximum working time, but otherwise, there will be little change to the WTR.
Family-friendly rights
The family-friendly rights that EU law provides are, theoretically, at risk.
Maternity leave has been protected for decades, and it’s difficult to imagine a situation where it is compromised.
Other areas of family rights, such as shared parental leave, paternity leave and adoption leave, are a mix of primary legislation and retained EU law. Therefore, certain rights around these types of leave are potentially at risk. For example, paternity leave is a very popular and frequently exercised right, so, it is difficult to envisage the government taking it away.
Regulations requiring fixed-term and part-time employees to be treated pro rata, similarly to permanent workers, could also fall away unless restated.
Our prediction? The government will likely keep the same levels of protection for employees in this respect.
Agency workers
Agency workers currently enjoy day one ‘equal treatment’ for some rights and then further rights after 12 weeks in the job, when they qualify for the same rights as someone employed directly. This includes the right to the same pay as a permanent colleague doing the same role, automatic pension enrolment and paid annual leave.
It is likely that there will be a reduction in agency workers’ rights. The Agency Workers Regulations 2010 have never been popular due to their complexity, and the requirement to provide agency workers with the same terms and conditions as directly contracted staff after 12 weeks, which can defeat the purpose of engaging agency workers. By design, agency workers are supposed to be cheaper than permanent staff and easier to remove.
Because of this, employers often choose to terminate the services of agency staff before the 12-week deadline, leading to high turnover, which can cause operational challenges. Some people have even argued that the greater rights given to agency workers meant a rise in zero-hours contracts instead.
Our prediction? These rights could be repealed or significantly amended to reduce the burden of operating with agency workers on employers and HR.
Will there be a wholesale clear-out of EU-related legislation?
Some commentators and academics suggest that HR professionals should brace themselves for a big shake-up. But, it’s not clear cut.
While there’s a small possibility of a wholesale clear-out of any EU-related legislation in the hope that this somehow creates a more favourable business climate in the UK, the current reflective and concerned mood in the country would not seem to support indiscriminate change for change’s sake.
The most critical EU-derived rights are already gold-plated by UK law, so this Bill doesn’t endanger them. We may therefore see few substantive changes.
However, change could be coming in less obvious ways. The end of the supremacy of EU law, potentially scrapping 50 years’ worth of case law, could be very problematic in the medium term. It won’t change anything overnight, but issues thought to be long-settled could be re-litigated.
The uncertain future of employment legislation in the UK
It is still uncertain what the future holds as there is a lack of clarity from the government about the proposed changes. This isn’t helped by a distinct lack of clarity from the government about the detail of these proposals and the fact that since they were announced, the Bill’s two leading architects – Liz Truss and Jacob Rees-Mogg – are no longer in post. The Bill is also likely to be fiercely opposed in the House of Lords and could be subject to several attempts to amend it. So, it may not even survive.
Once the Bill becomes law, these changes will not require parliamentary oversight or consultation with anyone, placing the burden on overworked civil servants to ensure rights are not eroded. However, mistakes are almost inevitable. Moreover, this will be a rushed job. If recent history is anything to go by, information on the future could be very last minute, which can be hugely disruptive for employers and HR.
If there is a mass reform, organisations will bear the brunt of it.
Watch our webinar to find out more about our predictions. You can also download our guide to the Retained EU Law (Revocation and Reform) Bill, for HR professionals, here.
