The Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023

Explanatory Note

(This note is not part of the Regulations)

These Regulations make provision relating to employment under the Work and Families Act 2006 (c. 18) and the Retained EU Law (Revocation and Reform) Act 2023 (c. 28) (“2023 Act”) by way of amendments to the Working Time Regulations 1998 (S.I. 1998/1833) (“1998 Regulations”) and the Transfer of Undertakings (Protection of Employment) Regulations 2006 (S.I. 2006/246) and revoking the European Cooperative Society (Involvement of Employees) Regulations 2006 (S.I. 2006/2059).

Regulation 3 amends the 1998 Regulations to make new provision about the amount of paid annual leave to which irregular hours workers and part-year workers are entitled. The new provision for those workers includes a method for accrual of leave for those workers, sets out when they may take that leave and/or when it can be carried forward, and what is to happen if they take more or less annual leave than they are entitled to take in a leave year. A new provision is also made to allow for these annual leave entitlements to be paid by way of an uplift to the worker’s pay at the time of accrual rather than by paying the holiday pay in the period that the leave is taken. This practice had previously been ruled unlawful by the Court of Justice of the European Union in case C-131/04 Robinson Steele v RD Retail Services Ltd [2006] IRLR 386, which required holiday pay to be paid at the time leave was taken. These new provisions for irregular hours workers and part-year workers are inserted into the 1998 Regulations by paragraphs (7) and (9) of regulation 3 of these Regulations.

Additionally, regulation 3 amends regulations 13 and 13A of the 1998 Regulations to include express provision about the rights of workers, in certain circumstances, to carry forward annual leave into subsequent leave years. Regulation 16 of the 1998 Regulations is also amended to include express provision about the calculation of holiday pay in relation to annual leave taken under regulation 13, which is often referred to as “normal pay”. These new express provisions restate certain employment rights to ensure those rights continue once the interpretive effects of EU law on the United Kingdom’s statute book have been removed at the end of 2023.

Additionally, regulation 3 amends regulation 13 to omit paragraphs introduced by the Working Time (Coronavirus) (Amendment) Regulations 2020 (S.I. 2020/365) which enabled leave to be carried forward into the following leave year where it was not reasonably practicable for a worker to take the annual leave due to the effects of coronavirus. Regulation 4 makes transitional and savings provision in relation to this amendment and regulation 6 revokes the Working Time (Coronavirus) (Amendment) Regulations 2020 . Regulation 5 makes a consequential amendment to the Road Transport (Working Time) Regulations 2005 (S.I. 2005/639).

Part 3 amends regulation 9 of the 1998 Regulations which relates to the keeping of records by employers in relation to time worked by their employees. Regulation 9 is secondary retained EU law within the meaning of section 11(2) of the 2023 Act and can therefore be revoked and replaced under section 14 of that Act.

The amended regulation 9 of the 1998 Regulations makes clear that the manner and format in which such records are to be created, maintained and kept is at the reasonable discretion of the employer and that the employer need not record each worker’s daily working hours to comply with the record keeping requirement. The effect of this is that the record-keeping obligations of employers under regulation 9 of the 1998 Regulations are not as provided by the decision of the Court of Justice of the European Union in case C-55/18 Federación de Servicios de Comisiones Obreras (CCOO) v Deutsche Bank SAE [2020] ICR 48.

Part 4 of these Regulations makes amendments to the Transfer of Undertakings (Protection of Employment) Regulations 2006. Regulation 8 provides that the amendments apply to transfers that take place on or after 1 July 2024. Regulation 9 amends regulation 13A of the 2006 Regulations. Regulation 13A currently provides that a micro-business can comply with the relevant information and consultation requirements by informing and consulting directly with the affected employees in circumstances where there are no existing appropriate representatives. The amendments to regulation 13A provide that the circumstances in which employers can inform and consult directly with employees will extend to businesses with fewer than 50 employees; and also where there are fewer than 10 employees transferring (regardless of the size of the employer).

Part 5 revokes an instrument relating to the involvement of employees in the European Cooperative Society (known as the “SCE”).

A full impact assessment in regard to the reforms in Parts 2 and 3 has been produced for this instrument and is published alongside these Regulations. A full impact assessment has not been produced for Parts 4 and 5 as no, or no significant, impact on the private, voluntary or public sector is foreseen.