The Prime Minister recently announced reforms making thousands of UK businesses exempt from reporting requirements and regulations, such as gender pay gap and executive pay ratio. This is part of a sweeping package of reforms targeted at “slashing red tape” to boost productivity and supercharge growth for businesses.

What changes have been implemented?

Under the previous rules, small and medium businesses with fewer than 250 employees were exempt from certain regulatory requirements, while those with fewer than 50 staff often completely exempt.

However, according to a survey ran by the government in 2020, many businesses with between 50 and 249 employees spent on average, over 22 staff days per month dealing with regulation and that more than half of all businesses considered regulation to be a burden.

The Prime Minister announced plans to widen these exemptions for reporting requirements and other regulations (from 3 October 2022) to businesses with fewer than 500 employees, with the possibility of extending the threshold to businesses with fewer than 1,000 employees once the impact is known. The changes can also be applied to retained EU law as part of the government’s plans to reform regulations it considers to be “bureaucratic and burdensome on businesses”.

General secretary, Frances O’Grady for the Trade Union Congress (TUC) commented that: “Obligations on businesses which were put in place to help improve the lives of working people, like reporting on gender pay gaps and executive pay ratios, are set to disappear overnight for employers with less than 500 workers,” and further “Scrapping gender pay gap reporting for businesses up and down the country risks turning the clock back for women at work. And ditching reporting on pay ratios for these businesses will be a boon to greedy bosses.”

How far will the reforms to employment laws go?

In July 2022, the government passed legislation which allows employers to hire agency workers to plug staffing gaps caused by strike action to alleviate pressures felt by businesses. The amendments provide employers with a mechanism to avoid disturbances and preserve continuity of services which effectively break strikes. This has attracted major criticism and led Unison and the TUC to commence legal proceedings to trigger a judicial review of the legality of the reforms.

Further, the Financial Times recently reported that business secretary, Jacob Rees-Mogg has plans to cut workplace rights, including introducing a form of no-fault dismissal for higher earners and repealing the 48-hour week, according to senior government insiders.

As well as introducing no-fault dismissals for people earning more than £50,000 a year, Rees-Mogg suggested scrapping corporate reporting requirements for the gender pay gap and the speed with which companies pay their suppliers. The business secretary also proposed removing rights which enable agency workers to “passport” to full employment rights, along with the repeal of the working time directive.

However, its reported that Liz Truss has quashed the proposed ideas and confirmed that she has no plans to remove anybody’s holiday entitlement or make any significant changes to the working time directive.

Since the Brexit vote in 2016, union leaders have been nervous about the potential for the government to cut workers’ rights after the UK left the EU. The package would have sparked a hostile reaction from labour unions which are balloting for strike action across large parts of the UK economy, including railways, healthcare and postal services.

Following the Retained EU Law (Revocation and Reform) Bill 2022, it will be interesting to see the Prime Minister’s and the government’s approach to further reforms to the labour market in Great Britain.