Following the UK's exit from the EU on 31 January 2020, the Brexit trade deal between both parties sought to ensure a level playing field was maintained in terms of employment law rights. However, the Retained EU Law (Revocation and Reform) Bill 2022-23 (the Bill) may change this approach, with the move away from "retained EU law" expected to happen more rapidly than initially anticipated. The government made the point with the announcement of the Bill that it was never intended that retained EU law would be part of UK law forever. 

Glossary: Retained EU law is the law created on 31 December 2020, the end of the transition period, by the European Union (Withdrawal) Act 2018, and consists of EU-derived legislation that has been incorporated into UK legislation. 

Current landscape

We explored in a previous blog post how the Brexit trade deal would impact UK legislation that stemmed from retained EU law. The European Union (Withdrawal) Act 2018 created retained EU law. The aim was to prevent any "gaps" appearing in the UK statute book. Retained EU law is essentially a snapshot of the EU law which was in force in the UK at the end of the transition period. It was expected that retained EU law would be reviewed and subsequently amended and adapted over time, either by the courts or through enacting new domestic legislation. However, the government is expediting this process to "develop new laws that best fit the needs of the country and grow the economy", by introducing the Bill. The Bill seeks to end the special legal status of all retained EU law by 31 December 2023, the "sunset" date (subject to review and extension until 2026).

Key provisions of the Bill

The primary purpose of the Bill is to remove the special status and EU-derived features of retained EU law at the end of 2023. The Bill includes various tools by which the government can change the content and operation of retained EU law. The Bill includes provisions to:

• revoke EU-derived subordinate legislation and retained direct EU legislation (i.e. regulations and decisions) at the end of 2023, if such legislation does not meet the government's desired policy effect. There is scope to push this date out to 23 June 2026 (the 10-year anniversary of the referendum outcome);
• repeal directly effective rights and obligations derived from EU treaties and EU directives;
• give UK legislation priority over retained direct EU legislation in the event of a conflict between the two;
• restate legislation so that it is removed from the category of "retained EU law", but it maintains the effect of the law in the UK by "restating" it as ordinary UK legislation. However, when restating such legislation, this will be limited to only resolving any ambiguities; and 
• rename retained EU law "assimilated law" after the end of 2023.

Glossary: To revoke a piece of legislation will mean to cancel/scrap it without replacing it in any way. Subordinate legislation is also called secondary legislation and it comprises the mass of legislation that is not an Act of Parliament. The main type of secondary legislation is Statutory Instruments. There are three main types of UK Statutory Instrument: "Orders", "Regulations" and "Rules". 

One principle runs through all options: that any new or replacement legislation may not increase the regulatory burden on businesses. At least this will be welcome news to employers. 

Which UK employment laws are likely to be affected?

The scope of the Bill is broad, with more than 2,400 pieces of retained EU legislation falling within it, and much of the EU derived secondary legislation applicable in the UK is anticipated to be affected. This includes the Working Time Regulations 1998, the Agency Workers Regulations 2010, the Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000, the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002, and the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). Unless action is taken by the government to restate such secondary legislation, it is destined to disappear with the sunset! 

Although it is expected that much of the current legislation would be restated or amended, as opposed to entirely revoked, the fact that the Bill would automatically revoke retained legislation unless specific steps are taken to preserve it indicates that we can expect to see a significant change to the current landscape of employment law. However, the "sunset date" of 31 December 2023 gives little time for proper consideration and consultation on the laws affected. It seems likely that if the Bill is passed in its current form, the extension will be relied on, so that the "sunset" is delayed until 23 June 2026.

Next steps for employers

The Bill is still in its early stages, and must pass through the usual mechanisms and parliamentary voting processes before it becomes law. In particular, the potential impact of the Bill on the Brexit trade deal must be carefully considered, as it gives rise to a possible end to the "level playing field" of employment protections. This could lead to sanctions, including tariffs from the EU.

At this stage, it remains unclear how extensive the reforms of legislation will be. However, employers may wish to begin considering the practical steps to take in the event of wholesale changes to the law. For example, if new legislation is introduced to replace the Working Time Regulations 1988, employers may need to think about adapting policies which reflect the current law. However, some provisions will have been incorporated into contracts of employment e.g. holiday provisions, and amending employees' contracts needs special care and attention to avoid costly exposure to claims. If you are unsure about navigating your obligations as an employer in the context of the new Bill, please contact our PRM team.