Government to legislate on changes to TUPE consultation requirements and to clarify record keeping requirements

Earlier this year, the government published proposals to reform holiday entitlement and pay, record keeping requirements under the Working Time Regulations and consultation requirements under the Transfer of Undertakings (Protection of Employment) Regulations. The government has now published its response and draft regulations, with the new regulations set to come into force on 1 January 2024.

The government has confirmed that they will go ahead with the relatively modest reforms to record keeping and TUPE consultation requirements. This article explains the main changes and the impact this will have for employers.

The government’s response and draft regulations relating to holiday entitlement and pay include more substantial changes. A summary of the changes to holiday entitlement and pay and the impact for employers can be found here.

Recording working hours

It’s now clear that the Working Time Regulations will be amended to clarify that employers do not have to record the daily working hours of their workers.

This change will remove uncertainty about the legal position in the UK following the European Court of Justice ruling in CCOO v Deutsche Bank SAE (C-55/18), which required employers to record actual time worked each day by their workers. It was not clear whether UK employers were impacted by this ruling in any case, because the Regulations only required UK employers to keep “adequate” records.

What about Northern Ireland?

Employment law is devolved to Northern Ireland so these changes will not apply there.

What does this mean for employers?

For the purposes of the Working Time Regulations, employers must still keep “adequate” records to show compliance and such records can be created, maintained and kept in such manner as the employer thinks fit.

Organizations should shift their focus towards complying with UK national minimum wage rules under which employers need to keep sufficient records of working time to demonstrate compliance. The national minimum wage legislation has a different definition of “working time”, compared to the Working Time Regulations and so this can be a tricky area in practice.

TUPE consultation requirements

The government has also confirmed that they will go ahead and amend TUPE to extend the limited circumstances where employers can consult with employees directly.

Currently, there is a requirement to elect employee representatives for consultation on a TUPE transfer where appropriate representatives are not in place already, save for micro-businesses with fewer than 10 employees. Despite receiving some criticism from trade unions in the consultation responses, the government have now confirmed that the circumstances when employers can consult with employees directly will be extended to two different situations (provided there are no existing employee representatives in place):

• Where the business has fewer than 50 employees, irrespective of the size of the transfer; or
• Where the proposed transfer involves fewer than 10 employees, irrespective of the size of the business.

What does this mean for employers?

This is generally a welcome move, although this was a corner of TUPE that was often cut in practice. The changes are therefore unlikely to have a significant impact in practice.

The consultation paper had made a general call for ideas about how the TUPE regulations could be improved, and the government has not seized this opportunity to make further change. In particular the government has confirmed that they have no plans to widen the restrictions on changing an employee’s terms and conditions following a TUPE transfer. However, they have noted that they will continue to monitor the following areas and consider whether any future action is required:

• the issues raised by the European Court of Justice ruling in ISS Facility Services v Govaerts which held that an employment contract of a transferring worker can be split between transferees in proportion to tasks performed; and
• the case law around the application of TUPE to workers and the current unclarity.

These were two topics we considered to be key priorities for TUPE reform. Although the current changes are limited, it is promising these areas remain on the government’s radar.

The government’s response to the consultations about record keeping and TUPE reform can be found here and the draft regulations are available here.