11th May 2023

Government proposals to ‘cut red tape for businesses’

Article by Linda Wilson | Employment

In a policy paper called ‘Smarter Regulation to Grow the Economy’, the Government has set out a number of employment law measures as part of a package of reforms intended to grow the economy and cut costs for businesses. The plan to ‘tackle the red tape’ , which it claims is holding businesses back, includes removing reporting requirements from the Working Time Regulations 1998, introducing a new exception from the application of the TUPE Regulations to smaller businesses, and limiting non-compete clauses to three months.

In respect to working time, the Government proposes:

  • removing retained EU case law that requires businesses to keep working time records for most staff
  • introducing ‘rolled-up holiday pay’
  • merging the separate ‘basic’ and ‘additional’ leave entitlements under the Working Time Regulations into one entitlement to annual leave, while maintaining the same amount of leave overall.

With regard to TUPE, the Government proposes removing the requirement to elect employee representatives for the purpose of TUPE consultation for businesses with fewer than 50 employees and transfers affecting less than 10 employees. This would allow these businesses to consult directly with the affected employees.

As for non-compete clauses, the paper says that whilst these have a role in protecting businesses who invest in their staff, in the Government’s view they “inhibit workers from looking for better paying roles, and limit the ability of businesses to compete and innovate“. The proposal is to legislate to limit the length of non-compete clauses to three months.

Businesses and advisors alike will await the details and timings but, as ever, any legislation that is required will only progress when time in parliament allows.