On 22 September 2022, the government announced the introduction of the Retained EU Law (Revocation and Reform) Bill 2022.  The bill impacts 2,400 pieces of retained EU law which span 300 policy areas and 21 sectors of the economy, including employment.

On 31 December 2023, and in accordance with the ‘sunset clause’ in the bill, any EU-based regulations in UK law will be repealed (cancelled) or revoked (withdrawn) unless they are specifically preserved and incorporated into UK law.

The bill does include the potential extension of the sunset clause until 2026, should it be required, and this will allow additional time to assess whether some retained EU laws should be preserved.

What are the changes?

In addition, the bill provides for some other important changes; first, it removes the principle of EU law supremacy, which as it stands means that EU law trumps domestic legislation where there is a conflict; secondly, it also facilitates the move away from EU case law taking precedent in the UK courts.  It allows the Court of Appeal or the Supreme Court to depart from existing and binding domestic cases which have already been decided on the legislation but which are tainted by EU law if the courts consider it “right to do so”.

How does it affect employment law?

Areas of employment law, which businesses and HR professionals have all become familiar with, and which fall under the bill’s remit, include:

  • The Working Time Regulations 1998, which deal with maximum weekly working time and paid holiday.
  • TUPE 2006, which deals with the employment implications of business transfers.
  • The Part-Time Workers (Prevention of Less Favourable Treatment) Regulations.
  • The Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations.
  • The Agency Workers Regulations 2010; and
  • The Information and Consultation of Employees Regulations 2004.

This means that the bill could impact long-established employment rights like the 48-hour working week, rest breaks and holiday pay, rights of employees when a business transfers under TUPE, and equality of treatment of part-time and fixed-term workers, among other rights.  It is worth noting that, since the bill only applies to regulations and not acts, an employee’s right not to be unfairly dismissal (Employment Rights Act 1996) or to be discriminated against (Equality Act 2010) will not be affected.

So what does this mean for employers? 

Unfortunately, and at this time, it is uncertain exactly what the bill will mean for employers.  The bill is currently going through parliamentary consultation, but even if passed, we still do not yet know how far the government will go in respect of the various employment EU-derived regulations.    Nevertheless, the bill currently has the potential to be the biggest shake-up in UK employment law in many years.

Theoretically, the government could decide that they do not want to retain any of the EU-derived legislation and it could revoke it.  However, with many of these employment law provisions being now deeply rooted in UK law, this seems highly unlikely.  It’s hard to imagine that the government will, for example, choose to entirely do away with the Working Time Regulations.  Surely that is too drastic a move?

Conversely, it also seems unlikely that the government will just approve and wave through the already existing EU-derived provisions without making any amendments whatsoever.  This is their opportunity to remove any perceived unwanted provisions, streamline certain aspects and, if nothing else, put their stamp on UK employment law.  Certainly, if the government is going to stay true to its word and “bring the special status of retained EU law in the UK statute book to an end…in order to fully realise the opportunities of Brexit…” changes must surely be on the cards.

Therefore, it seems most likely that a number of the EU-derived legislative provisions that have become part of our domestic employment law landscape will be undergoing changes, whether an overhaul or minor amendments.

The Trade Union Congress is greatly concerned about the bill and the changes that might be made, considering that it could lead to the erosion or, worse, the removal of workers’ rights, for example, in respect of holiday, safe working hours and limits and parental leave.  However, the government has said that it is committed to keeping “high standards in areas such as workers’ rights…”.   Whether the government can do both, ‘realise the opportunities of Brexit’ while maintaining ‘high standards’ of workers’ rights, remains to be seen.

It seems a very tall order for this process to be completed by 31 December 2023.  Certainly, if the intention is to replace all EU-derived employment provisions, it seems an impossible task.  Nevertheless, this is the target date the government has set.  It could be that they will, therefore, inevitably rely on the extension to December 2026, giving them that extra time to consider their position and make any changes.

The only thing that does seem clear at this stage, is the uncertainty that now follows for both employers and employees. Meanwhile, businesses should keep a watchful eye out for any changes that do filter through and be sure to implement them when that happens.

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Helen is an expert in employment law, HR and commercial matters, including all manner of employment law issues (ranging from grievances and disciplinaries through to complex restructures and redundancy exercises), high-value cross-border commercial contracts and business turnaround advice.

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Published: 25th October 2022
Area: Corporate & Commercial

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