Public policy highlights: August 2023

Bankruptcy and diligence

The Society responded to the call for views from the Economy & Fair Work Committee on the Bankruptcy and Diligence (Scotland) Bill.

The bill forms part of a wider move to review and reform the law of statutory debt solutions and diligence, and the Society welcomed this update to the pre-existing legislation. The bill seeks to establish a moratorium on debt recovery action by creditors against individuals who have a mental illness; to make minor and technical modifications to the Bankruptcy (Scotland) Act 2016; and to make technical modifications to the law of diligence.

For the Society, the Banking, Company & Insolvency Committee commented on the key issues it believes the Scottish Government should consider when developing a mental health moratorium:

• The system should not be too prescriptive for parties.
• Additional resources are required and should be made available for debt advisers dealing with vulnerable clients who are suffering from mental health issues.
• As creditors and others are often unaware of the differences between Scots law and English law, it may be desirable to align the mental health moratorium with the existing model in England & Wales.
• There is a lack of clarity regarding the mental health issues that will give rise to the moratorium.
• The duration of the mental health moratorium is not obvious.

The committee also considered other aspects of the 2016 Act that may benefit from reform, such as the payment of statutory interest on the recall of sequestration.

While the committee is generally supportive of the diligence reform proposals and considers that their overall effects will be positive, it expressed concern that certain parties may be negatively affected.

Read the full response at the Society’s page on the bill.

Retained EU employment law

The Society’s Employment Law Subcommittee responded to the Department for Business & Trade’s consultation on proposed changes to the Working Time Regulations, holiday pay, and the Transfer of Undertakings (Protection of Employment) Regulations following Britain’s exit from the EU.

The response was supportive of legislation to clarify that employers do not have to record workers’ daily hours, noting that this was proportionate to the risk involved, but recommended that record keeping should remain good practice for most employers.

It also welcomed the proposal to create a single statutory leave entitlement, but noted that on any approach it is important that the law provides clarity and certainty for workers and employers. It also supported the introduction of rolled-up holiday pay as an option for employers in relation to all workers, subject to suitable safeguards.

The response acknowledged the arguments for and against proposals to allow small businesses to consult directly with employees on TUPE transfers where there are no employee representatives. However, it also highlighted that the proposed change would simplify and expedite the process while reducing the sense of distance that can be created via the employee representative model.

The response supported changes to allow businesses of any size involved with small transfers of employees to consult directly with their employees, subject to clarification on whether legislation would apply on the basis of the number of employees transferring, or the number of employees affected. It also proposed a number of other areas where clarification or improvement of TUPE regulations would be desirable, including provisions regarding failure to inform or consult, the application of TUPE to workers, and the interaction with data regulations.

Read the full response at the Society’s employment law page. 

Find out more about the Society’s work at www.lawscot.org.uk/research-and-policy/influencing-the-law-and-policy/