Goodbye EU law

The Working Time Regulations have long been the bane of many an HR department. Issues such as calculation of holiday pay and carry-over of annual leave have taken up disproportionate time and expense.  But the saga of the ever-evolving rights conferred by the WTR may finally be resolved, although it is not clear what, if anything, might replace it.

The Retained EU Law Bill

On 22 September 2022, the Retained EU Law (Revocation and Reform) Bill was introduced to the House of Commons.  Under the Bill, all EU-derived subordinate (or secondary) legislation is due to be repealed. So while Acts of Parliament (or primary legislation) are unaffected, the Bill contains a sunset provision under which all subordinate legislation will expire automatically (absent further action) in little more than a year, ceasing to be part of UK law. 

What does this mean for employment law?

Headlining the list of employment laws to be repealed are TUPE, the Working Time Regulations, the Agency Worker Regulations, and protection against discrimination for part-time workers and fixed-term employees.These laws are all subordinate legislation introduced to implement European Directives. Their expiry would potentially mark the biggest ever shake-up of employment law.

Directly effective rights from EU treaties will also cease to be part of domestic law. This includes article 157 of the Treaty on the Functioning of the EU which enshrines the principle of equal pay. Article 157 is currently being relied upon by thousands of retail workers in their claims against supermarkets for pay parity with distribution workers.

Which employment laws will not expire?

All UK Acts of Parliament will remain in force including the Equality Act 2010, the Employment Rights Act 1996 and the Employment Relations Acts 1999 and 2004. This means that protection against discrimination will remain in force, as well as notice rights and the unfair dismissal regime.

Temporary extension

Although the default position would be the automatic expiry of all in-scope legislation, the government could give a temporary reprieve. The Bill allows for an extension of the expiry date, subject to regulations being made, but only until 23 June 2026 (the date of the ten-year anniversary of the Brexit referendum).

Goodbye principles of EU law

It is not only subordinate legislation that is set to disappear from UK law. The Bill also provides that general principles of EU law, such as proportionality, legal certainty and purposive interpretation of legislation, will cease to be part of domestic law. The latter is the principle that allowed UK courts to read words into legislation in order to render it compatible with EU law. An example of this is the decision in Bear Scotland v Fulton in which the Employment Appeal Tribunal rewrote the entitlement to holiday pay to give workers the right to receive normal remuneration during annual leave.

An ambitious timetable

Perhaps the biggest shock of the Bill is the timetable for change.  It is little more than 12 months before the provisions take effect, leaving businesses with only a small window of time in which to prepare.  At this stage, the full impact of the Bill is unclear, raising more questions than answers as to the consequences for employment law.  

Untangling EU and UK law

Assuming that the government does not act to save the rights contained in retained EU law, it will need to clarify how EU law concepts might be divorced from UK law. For example:

  • What will be the impact on active litigation involving EU law concepts? It is unclear whether the courts and tribunals should interpret the law as it stood at the time the claim arose or whether their interpretation should be through a solely UK law lens.  
  • What will happen to legislation, such as TUPE, which has both an EU and UK legislative source? (TUPE primarily transposes the European Acquired Rights Directive but the service provision change provisions are “gold-plating” derived from the Employment Relations Act 1999.) This is particularly difficult where the EU and UK rights are interwoven throughout legislation and case law.  
  • How will courts approach domestic cases, such as the case law on holiday pay, which affirm and build on judgments of the European Court of Justice? In such instances, it will be difficult to identify where the line should be drawn between concepts derived from European Directives and those of domestic law.  

Repeal, restate or amend?

It remains to be seen what approach the government will take when applying the Bill to employment law. As the Bill was not accompanied by any policy statements, there is no indication as to whether its approach will be to repeal, restate or amend legislation which has formed part of UK employment laws for over a quarter of a century.