The Government is looking to remove or replace retained EU law and last week it introduced the Retained EU Law (Revocation and Reform) Bill 2022 to Parliament.
Following Brexit and to ease the transition out of the EU, the body of applicable EU law which was in force in the UK on 31 December 2020 was kept on the statute books and became known as "retained EU law". The rationale set out in the Government's press release following publication of the Bill explains that, "…having mapped where EU-derived legislation sits on the UK statute book, [the Government] is bringing forward this Bill in order to fully realise the opportunities of Brexit, and to support the unique culture of innovation in the UK."
The Bill provides for the "sunsetting" of the majority of retained EU law so that it expires on 31 December 2023 with provision for an extension mechanism for specified pieces of law until 23 June 2026. This means that all retained EU law contained in secondary legislation, such as regulations, and retained direct EU legislation will expire on this date, unless it is preserved in some form. Where it is decided that retained EU law should be preserved it will then be assimilated into domestic law.
The Bill also provides for the ending of the principle of the supremacy of EU law, general principles of EU law and directly effective EU rights which will also end on 31 December 2023. Thereafter, domestic law will be the highest law in the UK subject to special powers to amend the new order of priority in specific circumstances where it is necessary to preserve the current hierarchy. Domestic courts will also have greater discretion to depart from retained case law and new court procedures will be introduced for referrals and interventions in cases regarding retained EU case law.
The Bill is far reaching and has huge implications for employment law in the UK. In particular, areas such as TUPE, paid annual holiday, the 48 hour working week, part-time and fixed-term worker regulations and the agency worker regulations will all be impacted by the Bill, but it is not yet known what the Government proposes in relation to these specific areas. The relevant retained EU laws must now be incorporated into domestic law in time or risk being lost, but the Government may take this opportunity to reform the law and to bring about change on certain key issues, for example, in the calculation of holiday pay or the ability to change terms and conditions of employment following a TUPE transfer.
This will have a significant impact on businesses because of the immediate uncertainty over employment law reforms which may now be on the horizon. One point to note is that under the European Trade and Cooperation Agreement, if changes to UK employment law have a material effect on trade and investment or reduce employment rights, the UK may face tariffs from the EU. It remains to be seen what effect the sanction of such enforcement measures will have on the scope of reforms. The first reading of the Bill in the House of Commons took place on 22 September 2022. The second reading is yet to be scheduled.