On 23 September 2022 the UK government announced its intention to automatically sunset EU Regulations by December 2023. Then-Chancellor Kwasi Kwarteng stated that this will reduce the burden on business, improve growth and restore the primacy of UK legislation. Amidst the mini budget of the same day and the drama that has ensued, many people missed this statement.
The former Chancellor was referencing the ‘EU law Revocation and Reform Bill’ which was published in the House of Commons on 22 September. This Bill aims to revoke over 2,400 pieces of EU legislation contained in the UK statute book at the end of the Brexit transition period, which will require the relevant departments to review, replace or appeal retained EU law.
Retained EU law is most aspects of UK law that were derived from or influenced by EU legislation. It covers many areas from competition law to data protection and employment law.
The Bill will mean the replacement of retained EU law with new UK legislation more easily. ‘Sunsetting’ means that large parts of retained law will automatically repeal on 31 December 2023 unless Ministers decide to maintain or replace them in advance of that deadline.
In summary, if passed this Bill will makes it easier to amend and replace retained EU law without needing to pass an Act of Parliament.
This key Bill will be debated in both Houses of Parliament over the coming months. It may well be amended due to the vast amount of uncertainty about what the reforms might mean for businesses. There is an extension mechanism for certain pieces of law until 23 June 2026 and it is suspected this will be relied upon to give the UK the extra time it may need to make such huge changes to its legislation.
What does this mean for UK employment laws?
Numerous areas of UK employment law are at risk of being changed quite quickly in light of the way this new Bill is drafted. Those arguably at greatest risk are:
The Working Time Regulations. The amount of annual holiday entitlement for workers the UK exceeds the European Directive – the government may try to reduce the statutory holiday entitlement of 5.6 weeks a year for full-time employees. The UK currently has a 48-hour working week restriction over a reference period of 17 weeks based on an EU Directive. Previous governments have worked hard to ensure that UK workers could opt out of that restriction at their discretion. Both Liz Truss and Jacob Rees-Mogg (when they were Prime Minister and Business Secretary) have previously spoken out against the 48-hour week, giving grounds to suspect, when they were in office, that this may be removed in its entirety so that employers no longer need to rely on any opt out agreement and employees won’t be asked to sign it.
Changes may be made to the Transfer of Undertakings (Protection of Employment) Regulations 2006 which derive from the EU’s Acquired Rights Directive. For example, the government may want to make it easier to harmonise terms following a TUPE transfer which may be welcomed by many employers but greatly opposed by those protecting worker’s rights, such as unions.
In January 2021, Kwasi Kwarteng (when he was the Business Secretary) denied that there were any plans to amend the above areas of law and expressly stated that there was no intention to ‘whittle down’ workers’ rights.
The UK-EU Trade and Cooperation Agreement (‘TCA’) signed on 30 December 2020 states that if changes are made to UK employment law which have a material effect on trade and investment or reduce employment rights, then we may face fines from the EU. The government should therefore be cautious about implementing changes that reduce the level of protection for workers or fail to enforce employment rights in a manner that has an effect on trade.
One of the biggest issues that all employers will face over the next 15 months will undoubtedly be the need to keep on top of potential new and amended employment law changes. This will only result in further uncertainty for employers and employees.
Emma Clark is an employment partner at Keystone Law