New government proposals for measures to cut ‘red tape’

Written by Kate Smith and Jo Tindall.

On 10 May 2023, the government announced various measures contained in its policy paper ‘Smarter Regulation to Grow the Economy’ aimed at reducing red tape and cutting costs for businesses.  

On 12 May 2023, the government launched a consultation on reforms to the Working Time Regulations (WTR) and the consultation requirements under the Transfer of Undertakings (Protection of Employment) Regulations (TUPE).

The consultation seeks views on three areas:

• removing the requirements on employers to maintain working time records;
• reducing the complexity of annual leave and holiday pay calculations; and
• relaxing information and consultation requirements under TUPE.

Record Keeping Requirements

The WTR (derived from retained EU law) provide a number of valuable worker protections but, according to the government, ‘are too onerous on business to be used effectively or too complex for workers to know, understand and use.’ 

In accordance with the WTR, employers are currently required to maintain ‘adequate’ records to demonstrate that their employees do not work more than 48 hour per week. 

The government estimates that by removing this requirement, businesses will save £1 billion each year and from both a cost and administrative perspective, this change would no doubt be welcomed.

Annual Leave and Holiday Pay Calculations

The practice of rolling-up holiday pay into basic pay has historically been used by many businesses in respect of casual workers. Subject to consultation, the government proposes to reduce the complexity and administrative work involved in calculating holiday pay for these type of workers by allowing rolled-up holiday pay (held to be unlawful several years ago).  

The government also proposes to combine the two different statutory leave entitlements (4 weeks from the EU Working Time Directive and 1.6 weeks UK entitlement) on the basis that rules that have developed over the years in terms of treating the two entitlements differently.  The government believes that the current system of distinguishing between these annual leave entitlements have led to confusion and administrative burden for businesses and that combining annual leave entitlements will solve these issues.

The consultation will also be used to explore how to define the rate of holiday pay in legislation and also how annual leave entitlement accrues in the first year of employment.

The consultation document doesn’t specifically refer to the government’s recent consultation concerning proposals to simplify the calculation of holiday entitlement for term time and casual workers which closed in January 2023.  An outcome from this consultation is still awaited.

Relaxing information and consultation requirements under TUPE

Under current TUPE regulations, an employer must inform and (if appropriate) consult with recognised trade unions or elected employee representatives (if there is no recognised union) in relation to any employees who may be affected by a ‘relevant transfer,’ or any measures taken in connection with it.

Businesses without employee representatives in place are not permitted to consult with employees directly.  

The government is proposing to remove the requirement for elected representatives, so that for businesses with fewer than 50 employees where a  transfer affects  fewer than 10 employees, the employer can consult directly with employees (if they don’t have employee representatives in place).

An exemption already applies to businesses with fewer than 10 employees, but this change increases the scope of the exemption and will make the consultation process easier for small businesses who are unlikely to have pre-existing arrangements for employee representatives in place.

Comment

These changes will no doubt be welcomed by businesses, and in particular smaller employers who may struggle with the administrative burden of compliance with the current laws.

The closing date for responses to the consultation is 7 July 2023.

To contact Kate or read more about her practice, click here.

To contact Jo or read more about her practice, click here.