- The Retained EU Law (Revocation and Reform) Bill, or “Brexit Freedoms Bill,” is moving through the UK Parliament.
- Bill would end the special status of Retained EU Law in the UK (those laws kept in place at the time of Brexit) andenable it to be amended, repealed or replaced more quickly and easily.
- The immediate potential impact of this law for employers would be the possible deletion of certain employment regulations unless they are preserved or replaced.
The Retained EU Law (Revocation and Reform) Bill was introduced into parliament in autumn 2022. Colloquially named the “Brexit Freedoms Bill,” the UK government has described it as the “culmination of a journey that began on 23 June 2016 when more than 17 million citizens of the UK and Gibraltar voted for the UK to leave the European Union (EU).”
The Bill had its third reading in parliament on January 18, 2023 and will now go to the House of Lords for consideration. In the lead up to this, the Bill has had significant press coverage with commentators concerned about the potential “bonfire” of employment rights.
We set out below what the Bill proposes in its original (and current form) and what impacts it might have.
But wait a minute – hasn’t the UK already left the EU?
You would be forgiven for wondering what the hype around the Bill is given that Brexit has already happened. So before we explain the Bill, it is important to understand the current position.
Following the UK’s departure from the EU, to help ease the transition and given the sheer amount of work that would be required to disentangle UK law from EU law, a new category of UK law called “Retained EU Law” was created. Essentially, at the moment the UK left the EU, the European Union (Withdrawal) Act 2018 (EUWA), took a snapshot of the applicable EU law in force in the UK on December 31, 2020 and provided provisions on its interpretation to ensure continuity, legal certainty, and to avoid an interpretative void.
The UK is now free to remove Retained EU Law, but the process is not always quick or straightforward. There are reportedly over 50,000 laws introduced in the UK as a result of EU membership since 1990. The current position is that to change Retained EU Law there must be new primary or secondary legislation or a court decision.
What does the Bill propose?
The Bill is designed to end the special status of Retained EU Law in the UK and to enable it to be amended, repealed or replaced more quickly and easily. It proposes that:
- Certain categories of Retained EU Law will be subject to “sunset provisions” so that they will expire on December 31, 2023 (or June 23, 2026 if the extension power is utilised) unless restated or replaced. Not all Retained EU Law will be captured by the sunset provisions, but would include such EU-derived laws set out in regulations unless they are specifically preserved.
- The supremacy of EU law over domestic UK legislation will end:
- Currently retained direct EU legislation takes priority over domestic UK legislation passed prior to December 31, 2020. The Bill proposes to reverse this.
- The general principles of EU law will be abolished.
- Retained EU Law will become “assimilated law,” removing its special status.
- The UK courts will have greater discretion to depart from Retained EU case law (including new tests and processes that must be followed by the higher appellate courts and the lower courts and tribunals).
Retained direct EU legislation will be “downgraded” so that it can be amended by secondary legislation, reducing the parliamentary scrutiny of amendments. Currently, to amend retained direct principal EU legislation, Parliament would have to pass primary legislation, which has to pass through a strict legislative process through the House of Commons and the House of Lords before it can become law. Secondary legislation, on the other hand, is delegated legislation made by a person or body under authority contained in primary legislation (such as ministers, the Crown, or on public bodies), and follows a much less rigorous process (the details of which are dependent on whether it is follows the affirmative or negative procedure). The Delegated Powers Memorandum published alongside the Bill indicates that the “negative” procedure “will generally apply” to amendments to retained direct EU legislation. Secondary legislation made under the negative procedure does not need active approval by Parliament to become law but automatically comes into effect unless either House stops it within a fixed period after having been laid.
What will this mean for employment law?
The immediate potential impact is with the potential deletion of all Retained EU Law caught by the sunset provisions (namely EU-derived regulations), unless these are preserved or replaced. Currently, there are around 4,000 laws in total in scope (although the accuracy has been debated). Given the December 2023 deadline, this would leave little time for the full consideration by the raft of civil servants, regulators and ministers required.
In the employment sphere, in scope would be (to name just a few):
- Working Time Regulations
- TUPE
- Maternity and Parental Leave Regulations
- Agency Worker Regulations
In addition, the removal of the supremacy of EU law will also mean that some directly effective EU rights (such as the right to equal pay) will also no longer apply in the UK.
Commentators are concerned that this will lead to:
- the removal of important underlying employment rights
- employment laws being removed, amended or replaced too quickly, without proper understanding of the implications or parliamentary scrutiny, creating “bad law”
- the creation of a legal vacuum, which EUWA aimed to prevent, causing legal uncertainty
- greater litigation to either resolve the raft of uncertainties or to re-open previously settled areas of law
There is, however, alternative view to all this—that this could be an opportunity to shake up areas of UK employment law that are ripe for reform and that give you (and us lawyers) a headache. For example, the rules on holiday pay set out in the Working Time Regulations, which are complex. In fact the government has just commenced a consultation on calculating holiday entitlement for part-year and irregular hours workers (following the Supreme Court’s decision in Harpur Trust v Brazel last year), which could mean that the Working Time Regulations will be ripe for the first bonfire.
Wait a minute – wasn’t there some agreement with the EU about employment rights being protected?
As part of the UK’s Trade and Cooperation Agreement with the EU, the UK committed that it would not weaken or reduce the employment rights that were in existence at the end of the transition period. The promise, however, is limited to reductions in protection that affect trade or investment between the parties. If the EU believes there is a breach, a process is trigged under the agreement to resolve the dispute, and if it is not resolved the UK could face tariffs or other trade barriers. The extent to which the UK will choose to meddle with UK employment rights in practice, therefore, remains to be seen. However, even if these rights are to be maintained somehow, changes would be required if the framework of Retained EU Law that sits around employment law is pulled away.
Changes to employment law following Brexit would also be somewhat at odds with the commitment given by the Thersea May government when the UK left the EU in 2019 not to reduce the standards of workers’ rights from EU laws retained in UK law and of the manifesto of the current government to “raise standards in areas like workers’ rights.” We will see.
Final thoughts
Regardless of your views on the matter, if the Bill is passed the effects will likely be significant. The extent to which employment rights are kept, changed or removed remains unknown, which leaves employers with a lot of uncertainty. For now, we will have to remain patient until more concrete policy proposals regarding UK employment laws are confirmed, but employers may need to brace themselves for extensive changes at the end of the year with little forewarning.
FAQs
What is the status of retained EU law in the UK? ›
The Bill will be proceeding through Commons Committee stage during November 2022. The aim of the Bill is to make it easier to amend, repeal or replace EU law retained on the UK statute book to reduce regulatory burdens and costs on UK businesses. This will end its special status in the UK by 31st December 2023.
What is the retained EU law revocation and reform Bill? ›The Bill as introduced would give Ministers powers to preserve REUL together with powers to repeal or replace with other laws as they "consider appropriate”.
What is retained EU law after Brexit? ›Retained EU law is a form of UK domestic law. It was created to preserve the substantive law of the UK after EU law was “cut-off” as a source. The purpose of doing this was to provide legal continuity and certainty in the aftermath of Brexit, for individuals, government, businesses and other organisations.
Is TFEU retained EU law? ›An example is Article 157 of the Treaty on the Functioning of the European Union (TFEU) on equal pay. Directly effective rights arising under other treaties brought into domestic law by the ECA, such as international agreements made by the EU with countries outside the EU, will also be retained by the Bill.
Does EU employment law still apply in the UK? ›On 23 September 2022 the UK government announced its intention to automatically sunset EU Regulations by December 2023.
Will UK businesses still have to comply after leaving the EU? ›Data protection law after 31 December 2020: does the GDPR apply in the UK after Brexit? No, the EU GDPR does not apply in the UK after the end of the Brexit transition period on 31 December 2020.
How does EU law affect UK law? ›All EU law, across all policy areas, will still be applicable to and in the United Kingdom, with the exception of provisions of the Treaties and acts, which were not binding upon and in the United Kingdom before the entry into force of the Withdrawal Agreement. The same is true for acts amending such acts.
What does Retained EU law mean? ›Retained EU law. Retained EU law started life as a "snapshot" of all EU law which was in force and applicable in the UK at the end of the Brexit transition period i.e. 11 pm on 31 December 2020 (referred to in the legislation as "IP Completion Day").
Does EU reverse charge still apply after Brexit? ›After Brexit: Changes to Import / Export rules
As of 31 January 2021, the United Kingdom became a third country for VAT purposes, and the EU reverse charge rules for the supply of goods sent to/from the UK no longer applies. Companies instead should treat such transactions as exports or imports.
This principle of the 'primacy' of EU law means that any conflicting national law in areas covered by the EU treaties cannot be enforced. However, the Court of Justice does not have any power to strike down national law – this is a task for national courts.
What are the new rules for EU citizens in UK? ›
- have settled or pre-settled status under the EU Settlement Scheme.
- applied to the EU Settlement Scheme by 30 June 2021 but have not received a decision yet.
- have an EU Settlement Scheme family permit.
From the 2022 new financial year, all UK businesses liable to pay Corporation Tax will be required to pay a main rate of 19% for all non-ring fence profits over £250,000. This is set to increase further in 2023 to 25%.
Has UK employment law changed since Brexit? ›Employment rights remain the same since the UK's withdrawal from the EU (Brexit), except some changes to: employer insolvency for UK employees working in the EU. membership of European Works Councils. employing EU citizens.
Can countries ignore EU law and rely on their own laws? ›When countries fail to apply EU law. If national authorities fail to properly implement EU laws, the Commission may launch a formal infringement procedure against the country in question. If the issue is still not settled, the Commission may eventually refer the case to the Court of Justice of the European Union.
Does retained EU law have supremacy? ›Clause 4 of the Retained EU Law Bill abolishes the principle of supremacy from 31st December 2023, along with other aids to interpretation. The Government agrees with the Committee that retained EU Law should not be supreme over any UK law, and the Bill legislates for this to come into effect on 31st December 2023.
What are the three sources of employment law in UK? ›There are 3 main sources of Employment Law in England & Wales; the Common Law, Statute and European Law (European Directive and decisions of the European Court of Justice).
How will leaving the EU affect UK businesses? ›Trade could flow freely with no additional paperwork. But since the UK's departure, these supply chains have ended, meaning British businesses have to fill in a lot more paperwork in order to move goods between the two trading blocs.
What opportunities might leaving the EU offer to UK businesses? ›- Overseas markets. The opportunity for UK businesses to trade globally is seen as one of the main advantages of leaving the EU. ...
- Supply chain. ...
- Authorised Economic Operator status. ...
- Home markets. ...
- Digitalisation. ...
- Team recruitment.
The Withdrawal Agreement guarantees British citizens (who are lawfully resident in EU member states) broadly the same rights as they have now. They can continue to live, work and travel (although these rights would cease after a leave of absence of more than five years).
Did EU law supersede UK law? ›The Prime Minister has said that the European Communities Act 1972 (the Act that enshrined UK membership of the EU in UK law) will be repealed once the UK formally leaves the EU. EU law-derived provisions will remain in UK law until reviewed and decisions are made as to whether to keep, amend or repeal them.
How many EU laws have been repealed since Brexit? ›
Database of laws
2,006 of those are unchanged and 182 have been amended. 196 have been repealed and just 33 replaced.
It is an important part of UK labor law to protect workers whose work is transferred to another country. The regulations of 2006 replace the old regulations of 1981 introduced the original directive.
What are the 3 types of EU law that the Act retains? ›the Charter of Fundamental Rights of the European Union; the legislative instruments known as EU directives themselves (as opposed to the legislation implementing them or rights and obligations under them, which will be retained); the principle of supremacy of EU law (for prospective legislation); and.
Will UK deport EU citizens? ›Deportation. If you have Settled Status or Pre-Settled Status in the UK (or are eligible to apply), you could still be at risk of deportation from the UK if you are convicted of committing a criminal offence.
Can UK citizens claim tax back from Europe? ›The 'VAT Retail Export Scheme' allowed certain people to claim back the VAT they have paid on most of the goods they took out of the EU. This scheme ended on 31 December 2020 in respect of Great Britain (England, Scotland and Wales). It continues to operate in Northern Ireland.
What happens if UK leaves EU without a deal? ›In the event of a no-deal exit, EU energy law would have no longer applied to the UK. Continuity of supply would have been prioritised. For 12 months until new trading arrangements, a temporary scheme would have been implemented to import electricity with no tariff.
Can EU citizens work in UK 2022? ›The EU Settlement Scheme
EEA citizens, Swiss nationals and their family members, who have made an application to the EUSS up to and including 30 June 2021 and have not yet been granted status, can continue to live in the UK as now and maintain a right to work until their application is finally determined.
British citizens' EU citizenship and free movement rights ended when the Brexit transition period expired on 31 December 2020. Those rights had enabled them to visit, live, work or study in an EU Member State without needing a visa.
Has UK employment law changed? ›The Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2022 have been laid before Parliament and will come into force when they are made (usually a month after being 'laid') and the Liability of Trade Unions in Proceedings in Tort (Increase of Limits on Damages) Order 2022 come into force ...
What is the most common law broken in UK? ›Being drunk in a public place or a pub is probably the most common law to be broken, but flying a kite or knocking on strangers' doors and running away can also get you in trouble.
What's new in employment law 2022? ›
New limits on employment statutory redundancy pay come into force on 6 April 2022. Employers that dismiss employees for redundancy must pay those with two years' service an amount based on the employee's weekly pay, length of service and age.
Does UK have to follow international law? ›International law still applies to the UK on the international level – it is still bound by obligations it has accepted on the international level. NOTE: Customary international law has been accepted by UK courts as being one of the sources of the common law – the unwritten law recognised by courts.
Does international law prevail over EU law? ›The supremacy of the EU law is autonomy and absolute – expressis verbis – without any conditions. This principle states that no national law cannot prevail over the law derived from the Treaty, which is an independent source of law.
Does EU law override domestic law? ›The principle of the primacy (also referred to as 'precedence' or 'supremacy') of European Union (EU) law is based on the idea that where a conflict arises between an aspect of EU law and an aspect of law in an EU Member State (national law), EU law will prevail.
Has the EU withdrawal bill been passed? ›The bill's passage through both Houses of Parliament was completed on 20 June 2018 and it became law by Royal Assent on 26 June. An Act to Repeal the European Communities Act 1972 and make other provision in connection with the withdrawal of the United Kingdom from the EU.
What impact will leaving the EU have on law in the UK? ›Long term effects
In the longer term, IP right holders will need to deal with a major market where IP rights are free standing and where the local law is likely to diverge over time from the law in the EU, as judgments from the EU courts will no longer bind the UK courts.
Brexit (/ˈbrɛksɪt, ˈbrɛɡzɪt/; a portmanteau of "British exit") was the withdrawal of the United Kingdom (UK) from the European Union (EU) at 23:00 GMT on 31 January 2020 (00:00 1 February 2020 CET). The UK is the only sovereign country to have left the EU or the EC.
What is the UK Withdrawal Agreement? ›If you have residence rights under the Withdrawal Agreement, you also have the right to be treated equally with nationals of the country where you live and cannot be discriminated against. You will have broadly the same entitlements to work, study and access benefits and services as before the UK left the EU.
Who is covered by EU Withdrawal Agreement? ›Who is protected by the Withdrawal Agreement? The Withdrawal Agreement protects those EU citizens lawfully residing in the United Kingdom, and UK nationals lawfully residing in one of the 27 EU Member States at the end of the transition period.
Does EU law overrule UK law? ›This principle of the 'primacy' of EU law means that any conflicting national law in areas covered by the EU treaties cannot be enforced.
What benefits does the UK get from leaving the EU? ›
Leaving the EU has meant that the UK has not had to contribute to the significant new liabilities arising from the EU's Covid response including, for the first time, the EU's borrowing of up to €750 billion between 2021–24.