A Mini – Budget 2022 and a bonfire of EU Employment Laws?

As covered in our last website post, the appointment of Liz Truss as Prime Minister had employers wondering what changes to employment law we would see in her premiership.

Mini Budget

We have had our first indication of prospective changes today when the Chancellor, Kwasi Kwarteng, unveiled his “Mini-Budget”. In and amongst the various tax cuts were various developments which employers should be aware of and should keep an eye on over the coming months:

  1. Cuts to National Insurance – the 1.25% rise in National Insurance will be reversed from 6 November. HMRC have already warned businesses to update their payroll software in advance if this change.
  2. IR35 rules to be abolished – the rules introduced in 2017 and extended to the private sector in 2021 will be repealed from April 2023. It is expected that the reform will mean that contractors will again be responsible for determining their employment and tax status rather than the end client or recruitment agency.

EU Laws

Separate to the Mini – Budget, The Retained EU Law (Revocation and Reform) Bill 2022 was introduced to Parliament on 22 September 2022. As employers will be aware a great deal of employment law in the UK derives from EU law.  The Bill proposes that the majority of UK laws which derive from EU law will expire on 31 December 2023 unless otherwise preserved. This could potentially mean that a great deal of current UK employment legislation could, at least theoretically, silently disappear and no longer apply to the UK unless the government takes a positive step to retain it. This could include legislation regarding TUPE, annual leave and fixed and part – time workers Regulations.

The Department for Business, Energy and Strategy commented on 22 September 2022 that: “Government departments …. will determine which retained EU law can expire, and which needs to be preserved and incorporated into domestic law.” It awaits to be seen what the outcome of these reviews will be, and which pieces of legislation will be retained.

In addition, the Bill proposes to give UK courts greater discretion to depart from case law from the Court of Justice of the European Union which could entail departures from decisions which have greatly impacted areas such as annual leave and holiday pay.

In this ever-changing legal landscape, employers need to be aware of the latest developments. We are hosting a webinar on 3 November which will cover these developments. You can register here.


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