Government Response to Consultation on Retained EU Employment Law

Caroline Cobain
Legal Director
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The Government has recently published its response to a consultation on retained EU employment law, which had proposed reforms to several key areas of employment law in light of Brexit, including the calculation of annual leave and pay, consultation requirements under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) and Working Time Regulations 1998 (WTR) record-keeping requirements.

The Government has confirmed its intention to implement and legislate on the following proposals:

• To permit the provision of ‘rolled up’ holiday pay, for part-year workers and workers with irregular hours (after it was ruled unlawful under a previous case – for more information see our past JEL alert here), using an annual leave accrual method of 12.07% of the hours worked;
• Amend consultation requirements under TUPE, so that businesses with fewer than 50 employees undertaking a transfer of any size, and/or businesses of any size undertaking a small transfer of less than 10 employees can consult directly with employees if there are no existing worker representatives in place;
• Reduce the burden of reporting requirements under the WTR, by clarifying that businesses do not need to keep a record of all daily working hours of all of their workers if they are able to demonstrate compliance without doing so;
• Amend the WTR to preserve EU rights that would otherwise be revoked as a result of Brexit, including rights permitting the carry-over of annual leave in specific situations; and
• Introduce an end date of 31 March 2024 by which workers must have used any leave carried over as a result of the Covid pandemic.

The consultation originally also proposed to merge the current 4 weeks ‘basic’ annual leave entitlement and the ‘additional’ 1.6 weeks of annual leave entitlement, to create one pot of annual leave entitlement for all workers in the UK, governed by one set of rules. This proposal, however, was rejected by the Government, therefore, workers will continue to receive two distinct pots of annual leave which will remain able to be calculated differently in terms of holiday pay.

The above changes are expected to come into effect on 1 January 2024. We will follow up with more details on the exact legislation to be implemented, and relevant timescales for implementation, in due course when it is available.

Should you wish to read the Government’s response to the consultation, you can access it here. 

If you would like to discuss the implications of the Government’s response, or if we can provide support or assistance on any other employment law matters, please do not hesitate to contact a member of the team on 0141 331 5150.

Topics: EU Law, Holidays, TUPE, Working Time