The employment law landscape could look drastically different this time next year following today’s mini-budget statement.
Chancellor Kwasi Kwarteng outlined several key changes. Of these, was an announcement that will significantly impact employers – not from a tax and operational perspective – but in the rights of their workforce and their obligations as an employer, since employment laws derived from the EU are now all subject to change or removal. This includes:
- Working Time Regulations
- Part-time and fixed-term worker regulations
- Agency Worker regulations
“Ever since the UK voted to leave the EU, we’ve been waiting for guidance from the government on how our current employment laws will change.
“Probably the most significant announcement in terms of the future shape of UK laws was the introduction of a Retained EU Law (Revocation and Reform) Bill. This requires government departments to review then retain or replace ALL EU derived law. Any laws that are not formally retained will automatically expire on 31 December 2023.
“Reviewing these laws is a huge task and we can expect changes to almost every area of business and society. Of course, many laws are expected to remain the same and the UK is already one step ahead since, even whilst we were still part of the EU, domestic legislation was introduced which enhanced EU minimum requirements. For example, the EU mandates all workers to get at least 4 weeks’ paid annual leave, but the UK requires employers to provide at least 5.6 weeks’ paid annual leave. The key difference now is that the UK will have flexibility to set entitlements as they wish, so could, theoretically, set a new minimum entitlement to 2 weeks’ paid annual leave, lower than the EU’s threshold.
“All employers should put this date in their diary now and make sure that they are prepared for any changes that are announced before the deadlines, as well as knowing which laws will automatically expire after it. It’s important to highlight that over the next 15 months, we will likely see a stream of updates, which employers will have to track and manage accordingly, creating a whole new HR headache.
“Other key takeaways from today’s mini-budget announcement, include:
- The introduction of new legislation requiring minimum staffing levels during strikes
- New legislation making it a legal requirement for trade unions to put offers to a member vote before any strike action. This would mean that strike action would only be able to go ahead if union members refuse each offer that is put to them
- From April 2023 all contractors will be responsible for determining their own employment status following the removal of IR35 reform. Currently it is up to the organisation to determine status
- The National Insurance increase which was introduced in April 2022 has now been removed. As of 6 November 2022, employers will have to remove this extra tax from payslips and take-home pay will change. Payroll teams will need to be trained on how to process this.
- A cap has been put on energy bills for businesses for six months, with a review after three months for vulnerable industries, as part of the Energy Bill Relief Scheme. This is designed to help businesses manage soaring energy costs
“This is a time of change and concern for many business owners. It’s important to stay on top of the ever-changing legislation in order to remain fully compliant. Failure to do so could mean organisations are wrongly following out-dated laws, leading them to breach their legal obligations and withhold statutory entitlements which, in turn, could lead to tribunal claims and widespread discontent.”