Since the implementation of Brexit, we were wondering whether to expect a diversion from EU employment laws and regulations at some point, but no timetable had previously been announced for reform. It is now anticipated that we will be witnessing one of the most important pieces of employment legislation to be introduced since the Equality Act 2010, with a major effect on workers’ rights and labour unions.
On 22 September 2022, the UK Government published The Retained EU Law (Revocation and Reform) Bill where Liz Truss has implemented plans to urgently 'revoke or reform' all EU law (including UK statutory instruments introduced to comply with EU law) that still has the effect in the UK. The aim being to expunge the concept of EU law, and its effect, from the British legal system.
What effect will the Bill have on retained EU law?
All EU law that applied to the UK on 31 December 2020 became part of the UK’s domestic legislation, known as 'EU-retained law'. Since Brexit, the Government had the option to make changes to EU-retained law, however the Bill has now significantly increased the pace to decide whether to revoke, repeal or amend such legislation. This means that all law derived from the UK’s 40-year membership of the EU must be reviewed and either transferred into UK law or scrapped by 31 December 2023. This date can be extended to 23 June 2026 for some regulations if specific legislation is introduced to retain such legislation.
Which areas of employment law are likely to be affected by the Bill?
Key areas which will be affected by the Bill are:
- The Working Time Regulations 1998 – including, paid holiday, rest breaks and the Working Time Directive caps working hours at 48 hours per week (but UK employees are currently allowed to opt out of the 48 hour limit).
- TUPE (The Transfer of Undertakings (Protection of Employment) Regulations) 2006 – employees are currently protected when the business they work for is sold or when there is a service provision change.
- The Agency Worker Regulations 2020 – which provides employment rights to agency workers.
- The Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000 – which provides employment protections for part-time workers.
- UK Courts will no longer need to apply EU principles, which will include equal pay/treatment legislation.
- The Information and Consultation of Employees Regulations 2004.
It will also affect how UK courts will interpret UK legislation in light of EU case law which will end on 31 December 2023.
The Government has not yet confirmed if such areas will be revoked, appealed or amended and have not provided a timeframe as to when this legislation will be reviewed.
The Bill only applies to EU-retained law, so all purely domestic legislation and Acts will not be affected. This includes the Equality Act 2010 and the protections for whistleblowers.
What could be the changes to this legislation?
It is currently unknown what the changes could be, but there may be possibilities of the following changes:
- Clarification may be given in relation to the calculation of holiday pay, for example, whether this should continue to include commission and overtime or be calculated in relation to basic pay only.
- Discrimination law - the Government may consider introducing a cap/upper limit in relation to financial compensation for discrimination claims.
- TUPE – there may be changes to the consultation process.
- Agency workers – there is a possibility the Regulations may be repealed.
- Likely changes to the protections for equal pay for work of equal value.
Removing such legislation will create uncertainty for both employers and workers allowing UK courts greater discretion to depart from retained case law, which will be particularly difficult for holiday entitlements, for example.
What will happen next?
The final form of the Bill is subject to Parliamentary process and will be subject to extensive scrutiny. However given the timeframe for a potential election in two years’ time, it is envisaged that the Government will want to ensure the Bill is passed as quickly as possible.
We are not yet aware of a timeframe for when the Government will publish details of what it intends to repeal, revoke or retain under the Bill, and we will keep up-to-date with developments.
This uncertainty unfortunately means that employers cannot yet prepare for the changes, though it is expected that the changes will be significant.