Employment Law Updates - Smarter Regulation

Published: May 15, 2023

On 10 May 2023 the UK Government published the ‘Smarter Regulation’ policy paper which announced a number of post-Brexit employment law reform measures. The package of regulatory reforms includes:

  1. Limiting non-compete clauses to three-months
  2. Changes to Working Time Regulations
  3. Reforms to the rules governing the transfer of employees between undertakings (TUPE)

Non-compete clauses

Whilst timescales for some of the reform measures are unknown, the Government intends to introduce new legislation to limit the length of non-compete clauses “as soon as parliamentary time allows.” This change will give employees more flexibility and freedom to switch jobs and join a competitor but will not interfere with the ability of employers to use paid notice periods, garden leave, non-solicitation and non-dealing clauses.

At present it is unclear if these proposals will extend beyond contracts of employment and also apply to other types of contracts. It is also uncertain how the legislation will impact existing non-compete clauses which are longer than three months.

The full document can be read here:

Working Time Regulations

In relation to the Working Time Regulations, the policy paper states that the Government will: –

  • Consult on removing the retained EU case law that requires record-keeping for working hours.
  • Introduce ‘rolled-up’ holiday pay.
  • Merge ‘basic’ and ‘additional’ holiday leave entitlements into one entitlement.


The policy paper states that the Government will consult on removing the requirement to elect employee representatives for the purpose of TUPE consultation. This will impact businesses with fewer than 50 employees and transfers affecting less than 10 employees. This simplification of employment regulations will allow businesses to consult directly with the affected employees.

The new framework is said to be the first of a series of announcements focusing on improving regulation across the economy to drive economic growth and minimise business burdens.

Further proposals may be seen in the coming months.

EU Law sunsetting

In addition to the above, the UK Government has also announced that it is now reversing its position in relation to retained EU law.

Previously the Retained EU Law (Revocation and Reform) Bill proposed to introduce the ‘sunsetting’ of EU law whereby retained EU law would automatically be repealed on 31 December 2023. It has now been proposed that EU law will remain binding in the UK unless it is expressly repealed.

Following this announcement the UK Government has published the list of EU based statutory instruments intended to be repealed, the list includes around 600 pieces of secondary legislation and EU legislation.