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Post-Brexit changes to employment law

Changes to some aspects of employment law have been outlined in a policy paper, including to TUPE, holiday pay and non-compete clauses.

The paper, Smarter Regulation to Grow the Economy, claims that the changes will ‘cut red tape for businesses and save £1 billion per year while safeguarding the rights of workers’.

Working Time Regulations

  • Retained EU case law that require employers to record working hours for almost all members of their workforce will be removed.
  • Rolled-up holiday pay is to be allowed, so that workers can receive their holiday pay with every payslip (the government is already consulting on other reforms to holiday pay).
  • The current two separate leave entitlements (the 4 weeks’ leave based on EU law and the extra 1.6 weeks’ leave which is purely a UK entitlement) will be merged into one pot of statutory annual leave, while maintaining the same amount of statutory leave entitlement overall.


  • Currently, unless a business employs fewer than 10 employees and is therefore classed as a microbusiness, it cannot consult employees directly about TUPE transfers. Instead, there is a requirement to consult with a recognised union or, if there is not one, elect employee representatives.
  • The paper says that the government will consult on removing this requirement ‘for businesses with fewer than 50 people and transfers affecting less than 10 employees’, allowing businesses to consult directly with the affected employees.

Neither of these two changes require primary legislation and so can be effected via secondary legislation (i.e. statutory instrument). We have no timetable yet but the policy paper states that the WTR changes will be made this year. The consultation paper setting out more details of the above reforms can be found here.

Non-compete clauses

In a response to a 2020 consultation, the government has announced that:

  • Non-compete clauses will be limited to three months’ duration.
  • This will apply to both employees' and (limb (b)) workers' contracts.
  • It will not apply to 'wider workplace workplace contracts' such as partnership agreements, LLP agreements and shareholder agreements.
  • There will be no changes to other types of post-termination restrictions such as garden leave clauses, paid notice periods, non-solicitation clauses or confidentiality clauses. The policy paper does not mention non-dealing clauses.
  • The three-month restriction on non-compete clauses will require primary legislation and the paper simply states that this change will be made ‘when Parliamentary time allows’.

The consultation paper setting out further details of the proposed reforms can be found here.

To read the thoughts of our Managing Director, Beverley Sunderland, please click on this link.

Sunset clause

While not part of the policy paper, the government has announced that it is abandoning the controversial sunset clause in the Retained EU Law Bill.

This clause could have meant that thousands of EU-derived laws would automatically have been revoked at the end of 2023, unless deliberately kept or replaced beforehand. Instead, such EU-derived law will remain binding unless it is expressly repealed. The Bill has been amended to contain a list of the retained EU laws that the government intends to revoke by 31 December 2023. Barring three fairly niche measures relating to posted workers and drivers' hours, there are no other employment law implications.