The Department for Business and Trade has this week published a policy paper setting out a number of measures intended to grow the economy, including some proposed changes to the Working Time Regulations 1998 (WTR 1998), TUPE and non-compete clauses.

In relation to working time, the government will consult on removing retained EU case law that requires businesses to keep working time records for almost all members of the workforce. It also proposes allowing rolled-up holiday pay, currently unlawful, and merging the separate basic and additional leave entitlements under regulations 13 and 13A of the WTR 1998 into one entitlement, while maintaining the same amount of annual leave overall. 

The development in respect of rolled-up holiday pay is a significant one, which will attract criticism from some quarters but no doubt lauded by employers in some sectors who were significantly affected by recent case law which had caused huge uncertainty in regards to holiday pay for casual / zero hours or seasonal employees. 

 

On TUPE, the government will consult on 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 ten employees, allowing businesses to consult directly with the affected employees. (It appears that this is an extension to the existing "micro-business" exemption under which employers with fewer than ten employees do not need to elect and consult with employee representatives on a transfer.)

 

Finally, the government will legislate, when Parliamentary time allows, to limit the duration of non-compete clauses (often referred to as 'restrictive covenants') to three months. The paper states that this will affect "up to five million UK workers". There is little detail in the policy paper on how the limit will work in practice, but it does state that the proposed change will not affect non-solicitation clauses. It is not clear, for example, whether a non-compete longer than three months would be void altogether or only enforceable up to the limit. This measure follows a 2020 consultation in which various options were proposed, one of which was a statutory limit on the length of non-compete clauses.