The Retained EU Law (Revocation and Reform) Bill, published on 22 September 2022, marks the start of what could be the most significant programme of employment law reforms in the UK since the 1970s. The 42-page document could be used to revoke over 2,400 pieces of EU legislation that were included on the UK statute book at the end of the Brexit transition period.
For employers, this inevitably means uncertainty, as we wait to see which existing laws are to be retained, amended or repealed altogether. Employers therefore have to be poised to take action and respond to the changes, to ensure continued compliance and minimise legal risk and operational disruption, while maintaining positive workforce relations.
In this guide for employers, we explain the proposed changes under the Bill, giving some insight into how and when these could impact legal rights and responsibilities from an employment law perspective.
What is the Retained EU Law (Revocation and Reform) Bill?
Retained EU Law (REUL) refers to the category of domestic law created at the end of the Brexit transition period under the European Union (Withdrawal) Act 2018 (EUWA). The EUWA provided the legal authority for EU law to have effect as national law in the UK. REUL is essentially made up of certain pieces of EU-derived legislation that were ‘cut and pasted’ onto the UK’s statute book under the provisions of the EUWA, together with certain domestic laws that implemented EU law and were preserved in the same way.
The Retained EU Law (Revocation and Reform) Bill is the government’s recent proposal for a new piece of primary legislation covering a number of aspects relating to the special features of EU law that still remain in the UK legal system. This includes provisions to:
- revoke certain retained EU law
- make provision relating to the interpretation of retained EU law and to its relationship with other law
- make provision relating to powers to modify retained EU law
- enable the restatement, replacement or updating of certain retained EU law
- enable the updating of restatements and replacement provisions.
Also known as the Brexit Freedoms Bill, the Retained EU Law (Revocation and Reform) Bill marks a significant break from the continuity approach taken by the government to date for maintaining retained EU law. In a press release from the Department for Business, Energy & Industrial Strategy (BEIS) on 22 September 2022, the Government made it clear that retained EU Law was never intended to sit on the statute book indefinitely, and that the time is now right to start the process to end the special status of REUL.
The new Bill is essentially aimed at dramatically speeding up the process of removing and replacing REUL, providing the government with a fast-tracked way of removing years of EU regulation in favour of a more home-grown regulatory framework. The BEIS recent press release stated that this will enable the UK government to create regulations tailor made to the UK’s own needs, doing away with outdated and burdensome EU laws.
What will be the effect of the Retained EU Law (Revocation and Reform) Bill?
If the Retained EU Law (Revocation and Reform) Bill comes into force, this will amend the 2018 European Union (Withdrawal) Act, which provided post-Brexit continuity by incorporating former EU law into UK’s domestic legal framework as ‘retained EU law’.
The net effect of the proposed new law will be to:
- Sunset REUL: under the Bill, the proposals will sunset the majority of REUL. This means that all remaining REUL — either contained in domestic secondary legislation or retained direct EU legislation — will either be automatically repealed, unless government departments and the devolved administrations decide to preserve or replace this.
- End supremacy of REUL: retained direct EU legislation, where incompatible, currently takes priority over domestic legislation in the UK passed prior to the end of the transition period. The Bill will effectively reverse this order of priority, reinstating domestic law as the highest form of law on the UK statute book. In this way, UK Acts of Parliament and subordinate legislation will become supreme. However, where it is necessary to preserve the current hierarchy between domestic and EU legislation, the power to amend the reformed order of priority so as to retain particular legislative effects will be available.
- Create assimilated law: any REUL remaining in force after the sunset date will be assimilated in the domestic statute book to reflect that special EU interpretive features that were previously attached to it no longer apply. This means that the principle of EU law supremacy, as well as the general principles of EU law, as used by the Court of Justice of the European Union (CJEU) and member state national courts to determine the lawfulness of legislative or administrative measures, will also end on the same date. By ending the special status of REUL, the UK will reclaim the sovereignty of Parliament and restore primacy to its Acts of Parliament.
- Create powers relating to REUL: the Bill introduces powers to make secondary legislation so that REUL can be amended, repealed and replaced more easily. Currently, most REUL is afforded the status of primary legislation, where primary legislation is required to amend this. This means that any legislative changes, even if only minor or technical, take a lot longer to deliver. Additional powers will also be created under the proposals to specify how the replacement body of law should be interpreted. In this way, the Government will ensure that only regulation that is suited for the UK, and fit for purpose, will remain on the statute book.
- Facilitate the departure from Retained EU Case Law: the Bill also provides UK domestic courts with greater discretion, and procedures, to depart from EU legal precedent.
In summary, the provisions of the Bill, if enacted, will enable the UK Government, via Parliament, to amend more easily, and to repeal and replace retained EU Law, dramatically reducing the amount of parliamentary time that would otherwise be required. By allowing for the removal or replacement of EU law by means of regulations, and removing the need for primary legislation, this will provide a much faster process and involve far less parliamentary scrutiny.
It will also include abolishing the principle of EU law supremacy, as well as the general principles of EU law and any directly effective EU rights.
How will the proposed new legislation impact employment rights?
At this stage, it is difficult to determine the extent to which the proposed new legislation will directly impact employment rights and responsibilities. Retained EU law currently covers most aspects of UK law that were previously derived from, or influenced by, EU legislation, including employment law. As the Bill contains broad powers allowing the UK and devolved governments to reform retained EU law, these could be used in various different ways for different sectors, potentially paving the way for multiple employment law reforms giving effect to new policy agendas. Alternatively, they could be used to preserve the existing law where continuity is considered desirable.
These new powers do not apply to all EU retained law. Employment laws contained in primary legislation will be largely unaffected. The Equality Act 2010, for example, will remain in force even if the legislation that incorporates EU law is repealed, where any change to the discrimination and harassment regime seems unlikely. The powers do apply, however, to secondary legislation implementing EU law, plus EU-derived employment laws contained in Acts but put there by regulations, such as the collective consultation requirements under the Trade Union & Labour Relations (Consolidation) Act 1992.
Key examples of EU-derived secondary legislation include the Working Time Regulations; Agency Workers Regulations; Part-Time Workers Regulations; Fixed-Term Employees Regulations; TUPE, insofar as it implements EU law; the Information & Consultation of Employees Regulations; various Health and Safety regulations; and the Maternity & Parental Leave Regulations, in respect of parental leave and certain aspects of the maternity regime. The potential impact of the Retained EU Law (Revocation and Reform) Bill is therefore huge, with the possibility of deregulation in all kinds of areas of employment law, including safe limits on working hours, daily and weekly rest breaks, paid annual leave entitlement, rights on transfer, parental rights and so many more.
How will re-legislating employment laws impact employers?
At this early stage, it is impossible to predict how the powers given under the proposed new law to amend, repeal or replace will be used and, as such, which areas of employment law will be re-hashed, scrapped or substituted. Under the reform agenda, the basic options are:
- Restatement: this will, it would seem, turn the law into a purely UK law, stripped of any interpretative effect of EU law. However, when restating law, there is limited power to change the wording to resolve ambiguity or doubts, where it remains to be seen how much flexibility this will afford the Government when looking to rectify poor drafting;
- Revocation: this will mean the law is scrapped altogether without a UK equivalent being put in its place;
- Replacement: this will allow for the complete replacement with a new UK version, which would not need to be interpreted in accordance with EU law although, crucially, the Bill says that replacements cannot ‘increase the regulatory burden’.
Equally, it is difficult to predict which particular legislative provisions that currently govern employment rights and responsibilities will be affected by any one of these options.
An online public catalogue has been created, known as the Retained EU law dashboard, to help the UK at large review the substance of REUL. The UK Government is also said to be engaging with a range of organisations and stakeholders to identify areas for future reform. Still, it is difficult to do anything but speculate as to how employment law will be impacted. The only thing that really appears to be clear at this stage is that the Bill has fired the starting gun on what could be an intensive and significant programme of legislative reform, one which could not only see laws being passed or replaced with little Parliamentary scrutiny, but potentially also little by way of public consultation of any draft legislation.
In fact, the issue of time, not only in terms of new laws being passed, but also how quickly the draft Bill may come into force is one of the key contentious issues. Even though significant debate and many proposed amendments will undoubtedly take place before the Bill is passed into law — including issues such as whether existing regulations, like the Working Time Regulations, will be used as the starting point for new laws, as well as what happens to ‘sunsetted’ rights, like paid holiday, already incorporated into employment contracts — employers may not have much time to prepare for any potential changes.
On a more positive note, many EU laws kept on after Brexit were agreed as part of a compromise between multiple EU member states and were simply duplicated onto the UK’s statute book, without detailed consideration of the UK’s own priorities or objectives. The Retained EU Law (Revocation and Reform) Bill therefore represents an opportunity for change for the better, but whether this results in greater rights for the employee and more cumbersome responsibilities for the employer, or vice versa, is yet to be seen.
When are any changes to employment laws likely to take effect?
As the Bill currently stands, this includes a sunset date by which all remaining REUL will either be repealed or assimilated into UK domestic law. This ‘sunset clause’ will mean that, on 31 December 2023, what is left of retained EU law will automatically expire although, crucially, the Bill also includes an extension mechanism to June 2026 if the UK government needs to extend the deadline in relation to specified pieces of REUL. Where necessary, this extension will allow governmental departments additional time to assess whether some retained EU law should be preserved or abolished.
For employers and employees alike, there are uncertain times ahead, where employers, more than ever, will need to be vigilant about keeping abreast of any changes to the law and adjusting their workplace practices accordingly to avoid falling foul of any reforms. Depending on the extent of any changes, in due course, employers may ultimately be required to overhaul many of their workplace policies and procedures in response to the proposals set out within the Retained EU Law (Revocation and Reform) Bill.
As employer solutions lawyers, DavidsonMorris works closely with employers to guide and support with all aspects of employment law. Our legal specialists are strongly positioned to guide employers and HR teams through the planned reforms to ensure continued compliance and legal risk management, while minimising operational impact and supporting positive workforce relations. For advice and support, speak to us.
Retained EU Law (Revocation and Reform) Bill FAQs
What does retained EU law mean?
Retained EU Law (REUL) is the category of domestic law created at the end of the transition period, comprising certain pieces of EU legislation, and certain domestic laws implementing EU law, that were 'cut & pasted' onto the UK’s statute book.
Will EU laws still apply after Brexit?
The European Union (Withdrawal) Act 2018 provided the legal authority for EU law to have effect as national law in the UK post-Brexit. This is now due to end under the provisions of a new Brexit Freedoms Bill.
How will leaving the EU affect UK law?
Much of EU law remained in force in the UK after Brexit, as Retained EU Law (REUL), although REUL was never intended to sit on the UK statute book indefinitely, where a new Bill could lead to significant legislative reform.
Is EU law still supreme?
Under the provisions of the Retained EU Law (Revocation and Reform) Bill, the special EU law features of any former EU law remaining in force after 2023 would be removed, including repealing the principle of EU law supremacy.
Last updated: 30 September 2022