As the Government seeks to break away from EU legislation, Birketts’ Liz Stevens looks at how this will affect UK employment law.
On 22 September 2022, the Government introduced the new Retained EU Law (Revocation and Reform) Bill in Parliament. According to the Government’s press release, the Bill “will enable the UK government to remove years of burdensome EU regulation in favour of a more agile, home-grown regulatory approach that benefits people and businesses across the UK.”
What does the Bill aim to do?
The Bill provides a ‘sunset clause’, meaning that all EU-derived subordinate legislation (legislation made under Statutory Instrument rather than Act of Parliament) and retained direct EU legislation will be automatically revoked on 31 December 2023. That is unless a minister takes action to expressly ‘restate’ (preserve) the legislation until a backstop date of 23 June 2026, which is the 10-year anniversary of the Brexit referendum.
This means that unless positive steps are taken to retain any of the existing EU-derived legislation, it will all be automatically removed with effect from 1 January 2024.
In addition, the Bill abolishes the principle of the supremacy of EU law, also with effect from 1 January 2024. This means that UK domestic law will take priority over retained direct EU legislation in the event of any conflict between the two. Domestic legislation will no longer have to be interpreted in line with EU law, and UK courts will be given greater discretion to depart from retained EU case law.
The Bill also provides ministers with the power to revoke and replace any secondary retained EU law, provided that any replacement legislation does not increase the regulatory burden. This is one of the most controversial aspects of the Bill, as it will allow for amendments to be made to existing EU-derived secondary legislation without full Parliamentary scrutiny.
What will be the impact?
A large number of key employment law provisions in the UK are derived from EU legislation, so the potential impact of the Bill is enormous. It could result in the removal, or significant revision, of the:
• Working Time Regulations 1998
• Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000
• Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002
• Information and Consultation of Employees Regulations 2004
• Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE)
• Agency Workers Regulations 2010
• Various health and safety regulations
Whilst it is tempting to think that the removal of TUPE, or the Working Time Regulations, would make life a lot simpler for employers, removing these pieces of legislation would have the effect of significantly reducing employee protections as well as introducing a lot of uncertainty for business. In addition, some of the existing legislation is ‘gold plated’ by the UK and goes beyond what was required under the relevant EU Directive, perhaps most notably the service provision change elements under TUPE, which do not derive from EU legislation.
It is highly unlikely that we will see a wholesale removal of EU-derived employment rights, not least because it would be politically extremely damaging and cause too much disruption for employers. It is, however, possible that the Government will take the opportunity to remove some of the more unpopular protections, with many commentators predicting that the Agency Workers Regulations are a likely casualty.
If the Bill is enacted in its current form, ministers may take the opportunity to make some amendments to the existing legislation, even if the bulk is retained as ‘assimilated EU law’. For example, TUPE could be revised to make it easier to harmonise terms and conditions post-transfer and the Working Time Regulations amended to make the calculation of holiday pay more straightforward. This would no doubt be welcomed by many employers.
What happens next?
The Bill will progress to a second reading before going to Committee and Report stage, and a third reading in the House of Commons before it is considered by the House of Lords. It has a long way to go before it is granted Royal Assent, and during such a turbulent period in British politics, it may need to be watered down considerably before it is voted through, if it is even ultimately enacted.
The Bill also presents significant practical difficulties, with an estimated 2,400 pieces of legislation potentially affected, which will need to be reviewed prior to 31 December 2023. If ministers rely on the backstop provisions, this is likely to take us beyond the next General Election, meaning that the impact of the Bill is even harder to predict.
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The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at October 2022.