Brexit has left us in the U.K. with various ‘retained EU law’ originally derived, which currently remains in place due to the European Union (Withdrawal) Act 2018. However, the UK Government want to now reconsider all the regulations and laws. They are sifting through what they should retain, amend or remove. We hope to create our own bespoke platform of rules and regulations. One aspect that will be drastically reviewed is Employment Law as much of what we now base our law upon is derived from EU obligations. As such, employers need to be prepared for the likely changes.
Government has a plan to do this by way of the Retained EU Law (Revocation and Reform) Bill 2022-23 (the “Bill”). Implementing this could lead to significant changes to employment rights and obligations. Employers and employees must prepare for contract and policy changes. It is also likely to impact on agency and other types of workers.
When and how will this work?
The laws at play will be identified, according to the Government timescales, by 31 December 2023; unless a law is preserved, it will be withdrawn.
The Government could:
- Amend and replace or restate/adopt (preserving current laws) or revoke them
- EU retained law currently has priority over conflicting UK employment law passed before the end of the Brexit transition period. The Bill reverses this order, prioritising domestic law over retained EU law.
- Abolition of general principles of EU law (UK courts have had to reconcile and uphold what aspects of law are valid) – where EU and UK principles are conflicting. This is currently to prefer principles of EU law, but this Bill seeks to give UK law precedents
- Renaming of Retained EU law as ‘assimilated law’ is to reflect that EU interpretive features no longer apply.
The government state this approach is to make ‘the UK ‘the best-regulated economy in the world as set out in the Benefits of Brexit document published in January 2022. Lawyers, Tribunals, ACAS and employers will all need to review these implementations for staff handbooks and policy changes; new employment contracts; pay and benefits afforded; addressing maybe overseas or seconded workers; pension and benefit offerings; it could all be up for change.
The Bill potentially impacts on significant amounts of legislation, and key areas include health and safety, environmental and consumer protection. It is predicted this will affect our UK regulatory framework substantially.
Although much retained EU law will survive beyond 2023, it will then be referred to as “assimilated law” (clause 6(1), the Bill). The Government, however, want to separate what is UK law versus retained EU law, but it is thought to be labelling only.
The body of retained EU law will impact over 300 policy areas and 21 sectors of the UK economy. The Government has created a dashboard that will apparently be updated quarterly as appropriate EU legislation is identified. Creating a directory of retained EU law was part of the previous Government’s strategy, which planned this as a proactive way to progress the regulatory reform and reclaim the UK regulatory framework. However, as history has shown, the law is slow to evolve, and government timescales have been known to slip, but the mission is to progress this swiftly to disentangle us from EU directives.
Substantial areas may change, such as the Working Time Regulations 1998, which cover holiday entitlement, the Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000, and TUPE (transferring staff upon business sale), amongst others. How they will look after the Bill is largely unknown. Employers need to watch for the proposals and enactments as contracts, staff policies and handbooks, as well as statutory practices, business sales, and their impact may change/need to be changed.
One area that will almost certainly be impacted are regulations concerning agency workers, part-time workers and fixed-term employees, as will be equal pay regulations and various health and safety regulations. If this is the case, vast redrafting may be required for some sectors; changes in insurance; and consideration about how they harmonise UK and overseas employee contracts, so they are non-discriminatory and fair.
If employers have European and UK staff, they may need to consider separate proposals for policies/practices and contracts – whilst ensuring the continuation of terms, non-discriminatory approaches and preparation and advice will be essential as this could be a significant change for many.
Retained EU law relating to tax (VAT and customs duty) will, we are informed by the Government, be dealt with separately under the Finance Bill.
Impact on the Courts
Presently the lower courts in England and Wales are bound by retained EU case law, unlike the Court of Appeal and Supreme Court, who can override this law. The Bill will bestow the lower courts the ability to refer EU case law to the higher courts of England and Wales. This will follow the current UK system of referrals by national courts to the CJEU on matters of EU law.
How to get ready
This is difficult to judge as this is a large ongoing exercise for the Government, and lawyers and employers will not know what to expect until perhaps early 2023. There is likely to be a period where a complete list of employees, agency workers and otherwise need to be prepared and a suit of contracts and policies reviewed and amended. Perhaps consolidating this early and having these ready to be reviewed and amended may assist HR and business lawyers to be ready to progress these along with associated policies
Employers should watch for when these changes are likely to be implemented. They keep abreast of progress as this may impact future recruitment, cash flow, sales and other plans in the future.
Karen Holden is the Managing Director & Founder of A City Law Firm who practise both commercial law and litigation, having been admitted to the roll in 2005. If you require further advice or assistance, please do not hesitate to contact [email protected]
A City Law Firm Limited is a leading entrepreneurial law firm in the city of London, with a dynamic and diverse team of lawyers. It was awarded most innovative law firm, London 2016 and Business Law firm 2017. They specialise in start-up business law, the tech industry, IP and investment.