More employment changes on the horizon?

Blog

24.05.2024

So far this year, employment law has been characterised by a significant amount of change, with reforms to holiday entitlement and pay, flexible working, carers’ leave and protection from redundancy. More details can be found in our blog, April 2024: what has changed in employment law? More changes are due, including the duty to prevent sexual harassment and a right to request predictable working patterns. However, it appears that the Government does not intend to leave it at that.

In a continuation of its post-Brexit employment reforms, the Government has announced a consultation into further proposed changes to employment law, affecting TUPE and European Works Councils. The consultation remains open until 11 July 2024.

Here, we look at the Government’s latest proposals in more detail, including considering the likelihood of change given the General Election on 4 July 2024. In addition, we provide a reminder of new guidance which has been published to assist employers with other recent changes to the law.

Changes to TUPE

Last year, the Government announced a number of reforms to employment law designed to cut red tape. This included changes to consultation requirements under TUPE (the Transfer of Undertakings (Protection of Employment) Regulations 2006). From 1 July 2024, employers will be permitted to inform and consult directly with employees where it is i) a small business (with fewer than 50 people) or ii) a business of any size but where fewer than 10 employees are transferring.

Now the Government is proposing two additional changes to TUPE:

Proposal 1: reaffirming that only employees are protected by TUPE

In 2019, the Employment Tribunal in Dewhurst v Revisecatch concluded that TUPE protection extends to workers as well as employees. This arose out of the fact that the definition of “employee” in TUPE is slightly different from the definition in the Employment Rights Act 1996. Although this decision is not binding on other courts, the Government acknowledges that it has created some uncertainty for employers.

As a result, the Government is proposing to amend the definition of “employee” in TUPE to clarify that workers are not protected on a TUPE transfer.

Proposal 2: removing the obligation to split employees’ contracts

In 2020, the Court of Justice of the European Union ruled that where there is a TUPE transfer to multiple transferees, a transferring employee’s full-time employment contract can be split between transferees into a number of part-time contracts. In the consultation, the Government recognises that this can be impractical for both employers and employees.

The Government is proposing amending TUPE to clarify that an employment contract should only be transferred to one employer. The employers taking over the business or service would be required to agree who should be responsible for each employee’s contract, though it is not clear what the Government is proposing if agreement cannot be reached.

European Works Councils

In addition, the Government has put forward a third proposal affecting European Works Councils:

Proposal 3: abolishing the legal framework for European Works Councils

Derived from EU law, a European Works Council (EWC) is a consultative body which allows employers to consult with employees or representatives at a European level on issues which affect employees in more than one EU member state.

On the whole, in the UK, EWCs have not been terribly popular and since January 2021, UK employees have been prevented from asking for a new EWC to be set up. However, it is still possible for employees to participate in legacy EWCs. This means some employers have found themselves operating parallel EWCs in the UK and in the EU.

The Government is now proposing to abolish the legal framework for EWCs in the UK, including repealing the requirement to maintain existing EWCs.

Likelihood of change

The consultation on these proposals closes on 11 July 2024, which is obviously after the General Election on 4 July 2024. There is therefore no time for the current Government to push through these proposals prior to the election and their continued progress is entirely dependent on whichever party gets into power.

If, as many expect, we end up with a Labour government on 4 July, might these changes still be taken forward? Labour has made some significant proposals for employment law, and the party has recently confirmed its commitment to bring forward an employment bill of rights within the first 100 of coming into power (for more information see our blog Labour’s employment proposals: implications for employers). However, the proposals in this consultation do not form part of those plans for employment law. Indeed, Labour’s proposal to merge the employment categories of “employee” and “worker” runs contrary to the Government’s first consultation proposal, since creating a single worker category would inevitably extend TUPE protection to all workers as well as employees. Given this, it seems unlikely that these proposals would be a priority for a potential Labour government in the short term at least.

A reminder of new guidance

While we’re on the subject of change in employment law, we thought it would be useful to flag a few pieces of new guidance available for employers:

Acas guidance on flexible working: following the changes to the statutory flexible working regime brought in on 6 April (for more information see here), Acas has published a range of advice documents and templates for supporting employers to follow the new law. These supplement Acas’ revised Code of Practice on requests for flexible working which has been updated following the changes in the law.
Unpaid carer’s leave: the statutory right to carer’s leave came into force on 6 April (see here for details). The Government guidance provides an overview of the right, with new Acas Carer’s Leave guidance providing additional detail.
Pregnancy and maternity toolkit: the Equality and Human Rights Commission (ECHR) has published an updated toolkit to provide employers with advice on what they should do to prevent pregnancy and maternity discrimination at work.
Employing disabled people: the Department for Work and Pensions has produced a practical guide for line managers for recruiting, managing and developing people with a disability or health condition.
Menopause in the workplace: earlier this year, the ECHR published resources for employers to help them understand their legal obligations in relation to supporting workers experiencing menopausal symptoms.