In a move that has been widely predicted, the government has reversed its decision to automatically revoke the majority of retained EU law at the end of 2023 via the controversial Retained EU Law (Revocation and Reform) Bill.
Prime Minister Rishi Sunak had pledged to review or abolish EU laws within his first 100 days in office, but the proposed “bonfire of EU laws” faced strong opposition from organisations , who expressed concerns about significant regulatory uncertainty. In recent weeks, both Conservative Party MPs and members of the House of Lords have also voiced their opposition to the Bill, disappointing staunch supporters of Brexit.
In a written statement on 10 May, the Business and Trade Secretary, Kemi Badenoch, acknowledged that removing EU-derived laws automatically through a sunset clause in the Retained EU Law Bill would carry the “risk of legal uncertainty.”
Is the Bill still going ahead?
The Retained EU Law Bill is still progressing through Parliament. However, the government has decided to abandon the “sunset clause” in the Bill, which would have led to the automatic removal of retained EU laws on December 31, 2023.
As a result, all retained EU laws will now remain in effect unless a deliberate decision is made to revoke or change them. According to Kemi Badenoch, this change means that fewer than 600 laws will be revoked under the Bill. It is worth noting that during a session in the House of Commons on May 11, 2023, Badenoch indicated that more than 2,000 pieces of retained EU law would have been revoked by the end of the year, as opposed to the original estimate of around 4,000.
Which employment laws will be repealed?
Following the government’s announcement, it has published a list of retained EU laws that it still intends to revoke under the Bill at the end of 2023. From an employment law perspective, there are only a few relatively obscure laws affected:
- The Community Drivers’ Hours and Working Time (Road Tankers) (Temporary Exception) (Amendment) Regulations 2006, which allow drivers of road tankers transporting specific materials to work longer hours and have shorter rest periods during national emergencies.
- The Posted Workers (Enforcement of Employment Rights) Regulations 2016, which require employers to pay posted workers at least the minimum wage and provide certain working conditions in the country where they are working.
- The Posted Workers (Agency Workers) Regulations 2020, which aim to protect the rights of agency workers when they are sent to work in another EEA country where they do not usually work.
This doesn’t necessarily mean that all other employment laws are safe. The government is still pursuing deregulation in the post-Brexit period.
Are all other employment laws unaffected?
In addition to scrapping the sunset clause, the government has introduced a new policy paper titled “Smarter Regulation to Grow the Economy,” which outlines potential changes to employment law aimed at reducing costs for businesses while safeguarding workers’ rights. These changes include:
- TUPE (Transfer of Undertakings (Protection of Employment)) regulations: Currently, employers with no appropriate employee representatives can only inform and consult employees directly in relation to a TUPE transfer where they employ fewer than 10 employees in total. The government plans to consult on expanding the exemption to small businesses (with fewer than 50 employees) where transfers affect fewer than 10 employees.
- Non-compete clauses: The government proposes limiting the duration of non-compete clauses to three months. The policy paper states that this will not interfere with the ability of employers to use (paid) notice periods or garden leave, non-solicitation clauses or confidentiality clauses. There is, however, no mention of non-dealing clauses. No details have been provided as to whether they will have to be retrospectively applied, but this could have a serious impact.
- Working Time Regulations (WTR): The WTR may be reformed this year and the government will be consulting on proposals to remove the requirement for employers to keep records of all individuals’ working hours. It will also look to simplify holiday pay by introducing rolled-up holiday pay and merging the current four weeks’ EU-derived annual leave entitlement with the additional 1.6 weeks’ statutory annual leave.
What’s next for the Bill?
The amended Retained EU Law Bill will likely go through the report stage in the House of Lords. Employers and HR professionals will need to wait and see how it progresses and what practical implications it will have. However, concerns remain about the potential use of “Henry VIII” powers under Clause 15 of the Bill and how previous European Court of Justice decisions will be handled.
The removal of the sunset clause is generally welcomed as it eliminates the uncertainty of which laws would remain in place in 2024. However, questions remain about the extent of changes to employment law and the level of Parliamentary scrutiny, as the Bill still grants significant power to the government to make changes without thorough scrutiny. We will be closely monitoring the progress of the Bill through the House of Lords.
