Employment aspects of the Government’s growth plan

There was more to last week’s statement from our new Chancellor of the Exchequer than tax cuts. It also included some significant policy announcements.

We are still short of details, but are expecting changes in the following areas of employment law:

Industrial disputes: Legislation will be introduced which will seek to guarantee a minimum service level for transport services during industrial disputes. Changes will also be made to the balloting rules by requiring “meaningful pay offers” to be put to employees.

Off-payroll working: The Government will reverse changes to the off-payroll working rules (also known as IR35) that were implemented in 2017 (in the public sector) and in 2021 (when similar changes were applied in the private sector). This will mean that this tax regime will revert to the pre-2017 rules, when the responsibility for applying these rules and paying the correct tax and national insurance rested with the personal service company, not the client.

Readers will be aware that the Truss Government has more wide-reaching aspirations for de-regulation of the labour market. Again, details are awaited, but some of the groundwork is being prepared by the recent introduction of the Retained EU Law (Revocation and Reform) Bill 2022. If passed in its current form, this will make it easier for the Government to amend legislation such as the Working Time Regulations and the Transfer of Undertakings (Protection of Employment) Regulations which derive from EU law. However, its room for manoeuvre in terms of employment rights will be limited by the non-regression commitments the UK Government made in its trade agreement with the EU.