Government announces proposals to “cut red tape” for employers

The Department for Business and Trade has this week announced a package of regulatory reforms seeking to “reduce unnecessary regulation for businesses, cutting costs and allowing them to compete”.

Cecily Donoghue, Senior Associate in our employment team, considers these proposals. The release this week is stated to be the first in a series of announcements, with further “deregulatory reforms” expected this year.

The package this week includes, but is not limited to, the following proposals:

• Reducing some of the Working Time Regulations reporting requirements (whilst retaining the 48 hour week requirement);
• Making regulation a last response, rather than a first response. A new, improved framework for regulation will reduce business burdens and enhance the way regulations for an evolving economy are handled in the future;
• To reintroduce rolled-up holiday pay and to merge the existing separate entitlements to UK and EU holiday into one pot of statutory annual leave, whilst maintaining the same amount of statutory leave entitlement overall (28 days for full time workers);
• TUPE transfers – Simplifying regulations by consulting on potentially removing the requirement to elect employee representatives for TUPE consultation for businesses with few than 50 people and transfers affecting less than 10 employees. Given the existing micro-business exemption, this is likely to have a limited impact.
• Helping reduce the length of non-compete restrictive covenants clauses to three months only. This is intended to provide more flexibility for a worker to join a competitor or start up a rival business after leaving their employer. This should not interfere with employers’ existing abilities to use notice periods, garden leave, non-solicitation or confidentiality clauses. There’s however, no reference to non-dealing covenants in the policy statement.

How will this impact businesses?

The primary goal here is to enhance economic growth in the UK, as part of the Government’s promise to prioritise innovation and an agile regulatory blueprint. The proposals outlined in this week’s update should save businesses an estimated £1bn per annum and simplify current complexities, allowing for quicker decisions and efficient administration.

Rather than being held back by red tape and pages of regulatory obstacles, businesses will be able to compete at a better level globally; something that has been dislodged in the past few decades as more regulations have been brought forwards.

Business and Trade Secretary Kemi Badenoch, says: “I have listened to the concerns of business of all sizes and have made it a priority to tackle the red tape that holds back UK firms, reduces their competitiveness in global markets and hampers their growth.”

Changes to the Retained EU Law Bill

In another statement also released this week, changes are proposed to the Retained EU Law Bill, which is currently passing through government. This Bill is intended to end the special status of retained EU law by the end of 2023 and is currently drafted so that almost all EU laws are automatically revoked at the end of 2023, unless a statutory instrument is passed to preserve them.

However, with the growing volume of EU law being identified and the risks of uncertainty posed by the “sunsetting instruments”, a new approach has been announced this week. An amendment will be proposed to replace the current sunset provisions with a list of the retained EU laws that the government intends to revoke at the end of 2023. This makes it clearer which regulations will be removed instead of highlighting only the ones that will be saved and should give businesses of all sizes further clarity.

No further detail or timescales are provided in either of the announcements this week.

The intention is clear however – “moving away from regulation as a first resort, alongside a reduction in the administrative requirements that divert time away from running a business, and more of a focus for regulators on stimulating economic growth.”

Read the full announcement here and the Policy Paper here.

How we can help

Our experienced employment solicitors are perfectly placed to help you navigate a wide range of employment law issues. We provide solutions that are tailored to the requirements of your organisation.

We will provide further updates on the details of these proposals and the timescales involved once more information is released. It’s however clear that the direction of travel this year is one of ongoing changes… watch this space!