The Retained EU Law (Revocation and Reform) Bill: why it matters to your business

The recently introduced Retained EU Law (Revocation and Reform) Bill 2022-23 (the Bill), as currently drafted, will remove all EU-derived laws from domestic legislation by December 2023 unless steps are taken to preserve it.

If enacted the Bill will:

• result in EU law falling away by 31 December 2022 unless the Government actively takes steps to preserve it. Importantly, EU law that has already become a domestic Act of Parliament, such as the Equality Act 2010, will be unaffected;
• enable Ministers to revoke or amend retained EU law quickly and without the usual Parliamentary scrutiny;
• result in conflicts between retained EU law and domestic law being resolved in favour of the latter unless provision is made to the contrary; and
• mean that the general principles of EU law will no longer apply. Therefore, courts will no longer have to interpret retained EU law in accordance with them.

The Bill requires the Government to take action to maintain the current status quo (by making statutory instruments), and therefore envisages that the Government will, by the end of 2023, have reviewed all EU-derived subordinate legislation and retained direct EU legislation to check whether each piece of legislation still meets the Government’s desired policy effect.

With current pressures on the Government, it is difficult to envisage that a detailed and reasoned review of the circa 2,400 pieces of EU-derived legislation will take place by December 2023; however, the Government does have the option to extend this deadline, and the impact of the Bill, until June 2026.

How will employers be affected?

The Bill results in uncertainty as it is unclear whether and when this will become law. Furthermore, it is not known at this stage what the Government will choose to revoke, preserve, restate or replace with new legislation. However, any weakening of employment protections that affects trade or investment could result in sanctions against the UK under the provisions of the UK-EU trade and co-operation agreement.

The Government is focused on economic growth and therefore some of the likely regulations which currently present “red tape” for business and might be removed or amended are:

• the Working Time Regulations 1998, particularly in light of the difficulties surrounding calculating holiday pay correctly;
• TUPE, however, this is more likely to be revised (perhaps to make post-transfer contract variations easier) than it is to be removed due to the potential implications that could cause; and
• the Fixed Term Employees Regulations 2002, the Part Time Workers (Prevention of Less Favourable Treatment) Regulations 2000, the Agency Workers Regulations 2010 and the Information and Consultation of Employees’ Regulations.

At a time when the Government and businesses alike are focusing on growth, the level of uncertainty that results from this Bill is a concern.

We will continue to update you as and when we have more information regarding the Bill and its progress.