Employment Reforms Post-Brexit

The UK Government has released a copy of its visionary paper entitled “Smarter Regulation to Grow the Economy”. The aim is to foster economic growth whilst supporting UK businesses. The paper introduces a series of strategic changes aimed at reducing both costs and administrative burdens for often struggling businesses.

In this blog post, we will review the key highlights of the paper and explore the potential implications of the proposed measures.

Simplifying the legislative landscape

The paper sets out the Government’s commitment to simplifying regulatory frameworks, particularly those related to employment practices. By redesigning existing structures “Smarter Regulation to Grow the Economy” seeks to enable businesses to flourish as they reduce unnecessary bureaucracy and concentrate on fostering innovation, job creation and sustainable economic development.

Highlights of the paper

Recued administrative burden

In acknowledging that excessive paperwork and administrative tasks can hinder business growth, the paper outlines initiatives to streamline processes. One notable reform is the digitalisation of various administrative tasks, offering businesses a more efficient and accessible way to management employment-related documentation.

Working time regulations

The government has proposed changes to the Working Time Regulations 1998 at some point in 2023. Their proposals would reduce the need for businesses to keep records of hours worked and will also simplify holiday pay calculations. Once these changes are implemented contracts will need to be updated.

Cost cutting

The Government is focused on reducing costs for businesses. These include revisiting tax policies, exploring incentives for job creation and simplifying payroll and reporting procedures. The overarching goal is to provide businesses with the financial breathing space they need to invest in expansion and innovation.

Simplified employment contracts

The paper introduces plans to create more simplified and standardised employment contracts. By minimising complexity and ambiguity, they set out that employers and employees can benefit from greater clarity, leading to improved communications and effective working relationships.

Non-complete clauses

The government aims to reduce non-compete clauses (a clause to restrict an employee’s future activities when choosing to work for a competitor or setting up their own business) to a maximum of 3 months. It is envisaged that this reduction will benefit both employees and employers. For the employee, this will allow freedom of movement and for the employer this will allow them to recruit talent more readily, thereby providing a greater boost to the economy.

Changes to the Transfer of Undertakings (Protection of Employment) Regulations 2016 (‘TUPE’)

The paper also discusses changes to TUPE. At present, any business with 10 or more employees, must consult via an elected employee representative body or committee. The Government is proposing that going forward, businesses that employ less than 50 employees will be allowed to consult directly with individual employees, in circumstances where there is not an employee representative body already in place. In addition, where there are less than 10 employees, and there is no representative body in place, businesses will have the automatic ability to consult directly.

Flexible working

The Government recognises that the world of work is constantly evolving and is committed to promoting flexible work arrangements. This includes more support for remote working, job sharing and alternative job models that both enhance employee well-being and productivity. The Employment Relations (Flexible Working) Act 2023 completed its passage through Parliament and received Royal Assent on 21 July 2023. You can find out more about this here.

Modernising recruitment strategies

The recruitment process is also set to undergo a revamp, with a focus on technology to streamline and expedite hiring procedures. This will not only reduce time and resources spent on recruitment but will also have the ability to enhance the candidate’s experience.

Enhanced training/upskilling

The paper places a particular emphasis on the importance of fostering a skilled workforce. The Government plans to collaborate with businesses to provide training and upskilling opportunities, ensuring that employees are equipped with the skills needed to thrive in a rapidly evolving job market.

Projections

The Government’s paper is the first notable shift in its approach to employment-related regulations. By cutting costs and reducing administrative burdens, they aim to create a more conducive environment for business growth, innovation and job creation.

It is projected that businesses will have greater opportunity to:

• Embrace digitalisation and automation to simplify administrative tasks;
• Leverage cost-saving initiatives in order to reinvest in business expansion and development; and
• Prepare for changes in employment contract structures and flexible working arrangements.

It is projected that employees will be able to:

• Anticipate greater clarity in employment contracts, fostering a better understanding of roles and responsibilities; and
• Explore new opportunities for flexible working arrangements that align with personal preferences and work-life balance

Conclusion

The release of the government’s paper sets out its commitment to supporting businesses and nurturing economic growth. However, there is no set timeline for these changes to take place. The government has only set tout that this will happen “when parliamentary time allows”.