There was a flurry of employment law related activity on Wednesday 10 May by the government as it announced a “dynamic package of deregulatory reforms” aimed at growing the economy and cutting costs. The policy paper, Smarter Regulation to Grow the Economy, sets out the details of that regulatory change agenda and includes the following measures that will impact UK employment law:

1. Working Time Regulations and changes to holiday pay

• Merger of “normal” annual leave and “additional” annual leave to create one pot of statutory annual leave entitlementCurrently, workers have two distinct holiday entitlements – 4 weeks’ leave derived from EU law and a further 1.6 weeks “UK” leave.The government proposes reducing the administrative burden and complexity of calculating holiday pay by merging these two entitlements, whilst maintaining the same overall holiday entitlement.Whilst a simplification of the holiday entitlement is to be welcomed, currently there are also two separate sets of rules for calculating holiday pay, depending on whether you are dealing with the EU-derived 4 weeks’ leave or the UK-derived 1.6 week’s leave. We assume (although the government has not specified this in its announcement) that the government also intends to simplify the method for calculation of holiday pay, probably by reverting back to using the “UK leave” method for calculating all holiday pay. For most workers, this means that pay elements such as overtime and commission would no longer be...

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