Government announces first tweaks to EU-derived employment law

Yesterday, the Government announced some relatively modest changes to the Working Time and Transfer of Undertakings Regulations, both of which were passed to implement EU directives. This is the first indication it has given of its plans to use its new freedom to amend EU-derived employment law, which it acquired at the end of the Brexit transitional period on 31 December 2020.

Three changes to the Working Time Regulations are planned. The first would relax the requirements imposed on employers to keep records of the working hours of each member of their workforce. Two changes are planned in relation to holiday entitlement, which are billed as reducing the administrative burden of calculating holiday pay. These involve permitting the payment of rolled up holiday pay, and amalgamating the two different types of leave provided for in the Regulations.

At present the rules applying to the accrual and calculation of the four weeks of paid holiday entitlement guaranteed by the Working Time Directive are more favourable to workers than those governing the additional 1.6 weeks to which workers are entitled under domestic law. It it is not clear how these differences will be reconciled in the amalgamation process.

Turning to the TUPE Regulations, the Government’s plans involve extending the exemption from the collective consultation requirements that currently applies to micro businesses. At present businesses with fewer than 10 employees who are required to consult do not need to elect employee representatives if none are already in place. Instead they can consult directly with the relevant employees. The Government will be consulting on extending this exemption for businesses with fewer than 50 people and transfers affecting fewer than 10 employees.

In addition to the Working Time and TUPE changes – which would amend EU retained law – the Government has also said that it intends to legislate “when parliamentary time allows” to limit the length of non-compete clauses to 3 months. The rules on non-compete clauses derive from the common law, so primary legislation will be required. No changes are planned to other contractual restrictions that employers use to protect their trade secrets when an employee leaves, such as gardening leave and non-solicitation clauses.

These announcements came on the day that the Government abandoned a key measure in the Retained EU Law (Revocation and Reform) Bill, which would have involved “sunsetting” all EU retained law that had not been identified and preserved by ministerial order by the end of 2023. Instead the Bill will list EU retained law that the Government intends to revoke.  Clearly the Working Time and TUPE Regulations will not be on that list, but, as we have seen, some amendments are on the way. We await more details on the exact wording of these amendments and their implementation timetable.


In the few days after first posting this blog, the following additional information emerged:

  • A consultation on the proposed changes to retained EU law outlined above
  • A response to an earlier consultation on reforms to non-compete clauses

These additional documents reveal a little more about the Government’s current thinking. However, there is still no detailed information about exactly how and when the proposed changes will be implemented.

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