WFM UK: Reforms to Retained EU Employment Laws

Overview

On 10th May 2023, the UK Government announced proposals to adjust the Working Time Regulations 1998 (WTR) and Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) laws. Both proposals are in consultation, closing on 7th July 2023.

Once the consultation closes and the next steps are outlined, further information will be provided pending any change to legislation. 

Full detail on retained EU employment laws, either preserved or have changes up for consultation, can be found here.

The Proposals

The individual proposals and what they mean are detailed below:

Working Time Regulations 1998:

• Record-Keeping - proposition to remove the requirement to record daily working hours, in an effort to reduce the administrative burden and cost surrounding recording working hours to the standard set out by the 2019 judgment of the Court of Justice of the European Union (Federación de Servicios de Comisiones Obreras (CCOO) v Deutsche Bank SAE)
• Holiday Entitlement and Pay - proposition to create a single holiday entitlement of 5.6 weeks, moving away from the 4-week and 1.6-week split
  • The consultation will explore how this will impact holiday pay. Whilst most employers do pay the entire 5.6 weeks at an employee's 'normal rate', the WTR give guidance that 4 weeks is to be paid at an employee's 'normal rate', whilst the 1.6 weeks is to be paid at 'basic rate'. The aim of the consultation is to clarify what determines the 'normal rate' as well as consider the implications of either having the entire 5.6 weeks' pay at the 'normal rate' or 'basic rate' with a clear understanding that there would be a financial impact on either the employer or employee respectively
  • It is understood that Additional Holiday Pay (AHP) would be affected, with respect to the maximum number of weeks that AHP is payable, and would increase from a maximum of 4 weeks to 5.6 weeks
  • The eligible amount of holiday to carry forward into a new holiday year would remain at 1.6 weeks
  • Review and change of holiday accrual calculation to happen at the end of each pay period to aid employers in determining holiday accrued during an employee's first 12 months of employment
• Rolled-Up Holiday - proposition to introduce 'Rolled-Up Holiday' so employees can receive their holiday pay with every payslip. Rolled-Up Holiday would be an extra option for paying holiday pay and not a replacement for the standard payment of holiday at the time the leave is taken
  • This would give employers a choice between using the existing 52-week holiday pay reference period and rolled-up holiday pay to calculate holiday pay for their workers with irregular hours
  • Rolled-Up Holiday pay could allow the use of the 12.07% calculation, which is also under review following the Supreme Court's judgement that it was unlawful (Harpur Trust vs Brazel - for more information please see here)

Transfer of Undertakings (Protection of Employment) Regulations 2006:

• Consultation Requirements - proposition to make changes to the consultation portion of the TUPE process. It is understood that portions of the consultation process are a burden to both the transferor and transferee. These changes would include extending the ability to consult employees directly for a transfer of under 50 employees, where an employee representative is not already in place.

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