Changes to Working Time Regulations, TUPE and Non-Compete Clauses

Changes to Working Time Regulations, TUPE and Non-Compete Clauses | Monday 15 May 2023 | 2 min read

Changes to three areas of employment law which are intended to boost the UK economy, reduce costs for businesses, and continue to safeguard the rights of employees have been announced by the Government:

Working Time Regulations (WTR)

The Government will consult on three changes to the Working Time Regulations:

• Reducing record keeping requirements in respect of working time obligations.
• Introducing rolled-up holiday pay, meaning employees receive their holiday pay with every payslip.
• Merging the basic and additional elements of annual leave into a single pot of statutory annual leave.

These proposals will, the Government states, be implmented “this year”.

TUPE

Currently under TUPE, only employers with fewer than 10 employees can inform and consult affected employees directly on a business transfer or service provision change. Otherwise, under a TUPE transfer the employers cannot consult with employees individually and there is a requirement to facilitate an election of employee representatives.

The Government plans to consult “on removing this requirement for businesses with fewer than 50 people and transfers affecting fewer than 10 employees, allowing businesses to consult directly with the affected employees”.

It is hoped that these changes will improve engagement with employees and simplify the transfer process, while ensuring employees’ rights continue to be protected.

Non-compete clauses

The Government proposes to limit the maximum length of non-compete clauses to three months. It is estimated that this change will affect up to 5 million UK workers.

The hope is that this change will boost competition and innovation within the UK economy by providing more flexibility for employees to join competitors, as well as supporting employers to grow their businesses and increase productivity by widening the talent pool.

The Government has confirmed that limiting non-compete clauses will not:

• Impact employers’ ability to use paid notice periods or garden leave;
• Affect the use of non-solicitation clauses; or
• Change the position of confidentiality clauses.

Legislating the amendments to non-compete clauses will take place “when parliamentary time allows”, the Government states.

Next steps

These changes are the first in a series of regulatory reform announcements that the Government plans to make. The reforms will not come into force immediately, and it is currently unclear when the changes will be implemented or when further proposals will be announced. 

If you have any queries or concerns about how these changes could affect you as an employer, please get in touch with Chris Cook using the contact form below.