Assessing the Government’s plans for de-regulating the labour market

What should employers make of the last week’s announcement about cutting “red tape” for “thousands of growing businesses”?

The press release was published by the Prime Minister’s Office on Sunday 2 October, on the first day of the Conservative Party conference. Some thought that more details about the plans would be revealed in the Prime Minister’s speech to the conference on 5 October, but nothing specific was forthcoming.

The press releases states that the Government is proposing to raise the cut-off point for small business regulatory exemptions from 250 to 500 employees. It explains:

“The changed threshold will apply from tomorrow (Monday 3 October) to all new regulations under development as well as those under current and future review, including retained EU laws.”

The mention of retained EU laws ties in with the publication of the Retained EU Law (Revocation and Reform) Bill last month. If passed in its current form, it would accelerate the process of reviewing retained EU law to establish which measures the Government intends to keep in the longer term. It would do that by revoking most of the legislation making up the two largest categories of EU-derived law at the end of next year, unless the relevant Government department reaches a positive decision to keep or modify it before then.

In the employment field, the vast majority of employment rights now need to be observed by all employers, regardless of whether these are purely domestic in origin, or derived in whole or in part from EU law. In employment terms, therefore, it seems likely that the press release is referring the relatively limited number of measures that currently apply only to organisations with at least 250 employees. These include the gender pay reporting legislation and right to request time off for training. As the press release implicitly acknowledges, further legislation would be required to amend the relevant legislation in order raise the threshold.

A much wider body of employment law will be covered in the review of retained EU law, including the Working Time Regulations and the Transfer of Undertakings Regulations. However, there is nothing to prevent the Government keeping this legislation as it stands or making relatively minor changes.

So for now we have the promise of a wide-ranging review with no clear indication from the Truss administration of exactly what legislation is likely to be changed. As far as core employment rights are concerned, the 2019 Conservative election manifesto promised that these would be retained, and indeed a number of new rights added. Despite mixed messages emerging during the party Conference, it seems unlikely that the Government will now wish to change direction on this, particularly since it has made non-regression commitments in the EU Trade and Cooperation Agreement which constrain its ability to make radical changes to core employment protection rights.

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