Employers across the UK may soon be operating in a very different employment law landscape. The government’s ‘Brexit Freedom Bill’ – or, the Retained EU Law (Revocation and Reform) Bill 2022-23 (‘the Bill’) – has now been published.
This Bill fast-tracks reform of EU-derived employment law: other than regulations which the government specifically chooses to retain in its current form, all European Union (EU) derived employment law will be either amended, repealed or replaced by the end of 2023.
We answer some key questions on what this means for employers.
How does the Bill change the existing approach to retained EU law?
On 31 December 2020 – the date the transition period out of the EU ended – a new category of employment law was created: retained EU law. All EU law that applied to the UK on 31 December 2020 became part of the UK’s domestic legislation. This is known as ‘EU-retained law’.
Post-Brexit, the government then had the option to make changes to that legislation, in the same way that it would make changes to any other domestic legislation.
However, EU-retained law was generally thought to be a relatively low priority area for reform post-Brexit, with no fixed timetable for change.
Following publication of the Bill, that approach has now shifted significantly. Once the Bill becomes law, the default position will be that by the end of 2023, all regulations under EU-retained law will automatically be
UNLESS the government takes positive steps to retain it (with an extension to 2026 possible for some regulations).
So, whilst the government has had the ability to change or revoke EU retained law since 31 December 2020, it seems that its foot is now firmly on accelerator.
Which regulations are likely to be affected by the Bill?
Key areas of employment law that fall within the scope of the Bill include the following (including any equivalent legislation in the devolved nations).
The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE).
The Working Time Regulations 1998 – for example, the maximum 48 hour working week, rest breaks, paid holiday, and protection for night workers.
The Agency Workers Regulations 2020.
The Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000.
The Information and Consultation of Employees Regulations 2004.
The government has not yet provided any indication of which regulations it intends to revoke, retain or amend under the Bill. We do not know when this information will be provided.
Which areas of employment law will be unaffected by the Bill?
The Bill only applies to regulations (not Acts) and only applies to EU retained law. This means that purely domestic legislation and Acts will not be affected. The Equality Act 2010 (and equivalent legislation in Northern Ireland) will remain unchanged. There will be no impact on the requirement to dismiss employees fairly and no impact on protections for whistle-blowers.
Will any new legislation replace the out-going legislation?
Possibly. However, the Bill is a re-deregulatory measure. There is no requirement under the Bill for the government to replace any retained EU law once it has been revoked or amended.
That said, the Bill will be subject to consultation and Parliamentary debate in the usual way, so it possible that amended regulations could include new obligations for employers but this seems very unlikely.
What is the impact on EU caselaw and principles?
At present, EU-retained law must be interpreted as far as possible in line with EU law, including following general principles of EU law; but the Supreme Court and Court of Appeal can depart from EU-law “when it appears right to do so”.
Under the Bill, the requirement for UK courts to interpret UK legislation in the light of EU case law will end on 31 December 2023.
The requirement for courts to apply EU principles will also be abolished by 31 December 2023 – for example, the principles of proportionality and equal treatment. However, the practical impact of this is likely to limited, as the approach of UK courts follows similar principles in any event.
What to expect in practice?
The final form of the Bill may well change as it works its way through the Parliamentary process. However, given the tight timescales involved and the prospect of a General Election in just two years’ time, it may be that the government hastens the Bill’s passage through Parliament as quickly as possible.
In terms of what may survive the legislative axe, it seems unlikely that prominent regulations such as TUPE and the Working Time Regulations will be subject to wholesale repeal. Some of the less significant regulations, which are also unpopular businesses, such as the Agency Workers Regulations and Information and Consultation Regulations are more likely candidates for repeal or significant pruning.
Whilst the general principles of TUPE are now so entrenched in the legal and commercial landscape that they may well be retained, the government may seek to revoke or amend provisions around consultation and / or post-transfer harmonisation of employment contracts.
In practice, the impact of the Bill may be watered down by political constraints. The UK entered into a Trade and Co-operation Agreement (TCA) on 1 January 2021, and this contains “level playing field” provisions, including brief provision for fundamental rights at work, occupational health and safety, fair working conditions and employment standards, information and consultation rights and restructuring of undertakings. The TCA would not prevent the Bill from becoming law, but breach of the TCA could have trade implications – for example, the EU could seek to re-balance any competitive advantage gained by the UK’s deregulation of employment rights by introducing tariffs.
It will now be for the Bill to work its way through the normal Parliamentary process and, in doing so, is likely to be subject to extensive debate and scrutiny.
It is unclear to what extent any new legislation passed as a consequence of the Bill’s reforming provisions will also be subject to Parliamentary scrutiny.
At the time of writing, the government has given no indication of when it will publish details of what it intends to repeal, revoke or retain under the Bill.
Therefore, at the moment it is difficult for employers to prepare in advance for the forthcoming changes to workforce regulation; but it seems that the reforms which are on their way have the potential to be significant and rapid.