At 11pm on Friday, 31 January 2020, the UK left the European Union. Under the terms of the Withdrawal Agreement ('WA') agreed between the UK Government and the EU in October last year, and ratified by the UK and European Parliaments in January, the UK and the EU have now entered a 'transition or implementation period'.
During that period, which as things stand will run until 11pm on 31 December 2020, essentially all aspects of EU law will continue to apply in UK law and the UK and EU will continue to act as if the UK remained an EU Member State, albeit without any UK representation in the EU's institutions.
We produced a summary of the WA when it was agreed in October, focusing on its provisions on Northern Ireland. It did not change the position on EU citizens' rights to live, work and stay in the UK from the agreement previously reached by Theresa May's Government.
On the UK side, the WA is given effect by the European Union (Withdrawal Agreement) Act 2020.
What does the 2020 Act do?
The 2020 Act implemented the WA, giving it domestic legal effect and enabling the UK Government to ratify the WA as a treaty. Its key features include:
• amending the European Union (Withdrawal) Act 2018 ('Withdrawal Act') so its provisions take effect at the end of the transition period rather than on Brexit day; repealing the European Communities Act 1972 as at the point of Brexit, but then immediately preserving key aspects for the duration of the transition period (in particular, the application and supremacy of EU law), a mechanism that has been described as 'repeal and save';
• giving effect to the UK/Switzerland Citizens’ Rights Agreement and the EEA/EFTA Separation Agreement (between the UK and Norway, Iceland and Liechtenstein), which are in broadly similar terms to the equivalent provisions in the WA;
• creating powers to make secondary legislation, where appropriate, to enable the WA to be implemented domestically, in particular in connection with the transition period, citizens’ rights and the revised Protocol on Ireland/Northern Ireland; and
• making necessary amendments to the Northern Ireland Act 1998 in relation to rights, safeguards and equality of opportunity protections contained in the Belfast Agreement.
The key changes from the earlier Withdrawal Agreement legislation
The predecessor to the 2020 Act was a Bill which was introduced to Parliament in October 2019 but then withdrawn by the Government when it became clear it would not pass by the then-applicable 31 October Brexit deadline. That Bill then fell when December's general election was called.
The 2020 Act retains key elements of the first version, though the existence of the new Conservative Party majority means that some significant changes have been made. The key changes are:
Extension of the transition period
Article 132 of the WA allows for a Joint UK-EU Committee to adopt a single decision, before 1 July 2020, extending the transition period for either one or two years. However, section 33 of the 2020 Act prohibits the UK Government from agreeing to any such extension (and so the 2020 Act does not repeat the previous provision that gave MPs a veto over the Government agreeing to an extension, which has much less relevance in a majority-government scenario.
This prohibition could always be repealed at a later date so it is largely symbolic, but it does indicate that the Prime Minister intends to stick to his commitment not to extend the transition period. The 2020 Act in its current form therefore limits the transition period to 11 months.
Parliamentary oversight of negotiations for future relationship
The 2020 Act also no longer allows MPs any veto or approval rights over the future relationship talks with the EU, including not repeating what would have been an enhanced Parliamentary approval process for any treaty agreed with the EU.
This means that Parliament's influence on shaping the future relationship with the EU is more limited. However, that is again to be expected when a Government has a significant majority.
Protection of workers' rights
Section 34 and Schedule 4 of the previous Bill provided additional protections for workers' rights post-Brexit, but these have been removed. Under the WA, EU laws on workers' rights will apply in the UK until the end of the transition period.
These include laws on issues such as working time, holiday pay and maternity leave. These existing rights will survive the end of the transition period as they will remain part of UK law, as part of the concept of 'retained EU law' (explained further below).
The previous Bill had added that the 'retained' laws in this area would not be reduced below the minimum levels required under EU law, but the 2020 Act no longer contains these provisions. This is again a reflection of the post-election reality, and in particular of the principle that Parliament cannot bind itself and so would always have been free to depart from EU standards post-Brexit, notwithstanding any legislative admonition not to do so.
The prohibition only really had value in a minority Government situation, as a concession to try to persuade opposition MPs to vote for the legislation. However, the Government has announced an intention to protect and enhance workers' rights in a (to be published) Employment Bill, rather than in the 2020 Act.
Arrangements with EU about unaccompanied children seeking asylum
The 2020 Act, at section 37, removes the UK Government’s obligations (under section 17 of the Withdrawal Act) with regard to unaccompanied children seeking asylum in the EU who have family members in the UK. Section 17 had required the Government to seek to negotiate an agreement with the EU, aiming to facilitate family reunion for unaccompanied children who have claimed asylum in the EU and have a relative in the UK (or vice versa).
Section 37 of the 2020 Act replaces this obligation with a duty to make a policy statement to Parliament “in relation to any future arrangements” between the UK and EU about these children within two months of the 2020 Act receiving Royal Assent. This policy statement can therefore be expected before the end of March 2020.
Interpretation of retained EU law
As noted above, the Withdrawal Act makes provision for EU law as it stands on 'exit day' (now the end of the transition period) to continue in force in domestic law until repealed or amended.
This 'retained EU law' includes laws that have been interpreted by judgements of the Court of Justice of the European Union ("CJEU"). The Withdrawal Act in its original form required UK courts, as a general rule, to decide questions about the validity, meaning and effect of retained EU law in accordance with CJEU case law, subject to the Supreme Court and High Court of Justiciary being able to depart from CJEU decisions using the same tests they adopt when departing from their own precedents.
The 2020 Act now includes a new provision (section 26(1)) that allows Ministers (but only prior to the end of the transition period, and after consulting senior judicial office-holders such as the President of the Supreme Court and the Lord President of the Court of Session) to set out circumstances in which any UK court or tribunal, including lower course, can depart from the rulings of the CJEU.
What will happen next?
While the immediate impact of the UK's formal exit from the EU will be limited by the effect of the transition period, it is important to understand that this is not the end of the Brexit process.
The UK and EU are about to embark on detailed negotiations on the details of their future relationship. If no agreement can be reached (or such a deal is not finalised and ratified) before the end of the transition period, this will lead to another 'no-deal' scenario at the end of the year.
While those areas dealt with in the WA have been resolved (citizens' rights, post-Brexit trade with Northern Ireland and money), in other areas the 'no-deal' risks that businesses thought they might have to navigate first in March 2019, then in October 2019 and then again in January 2020 (e.g. tariffs on UK-EU trade) will reappear at the end of this year.
Businesses should therefore keep a close eye on negotiations and their 'no deal' plans close to hand.