Government plans to “sunset” EU derived laws by the end of 2023

What does the Retained EU Law (Revocation and Reform) Bill mean for employment law? 

The Retained EU Law (Revocation and Reform) Bill sets out the Government’s plans to allow many EU-derived laws to expire at the end of 2023. This could have a significant impact on employment law. 

What does the Bill do? 

Under the Bill’s sunset provisions, retained EU law set out in secondary legislation will expire at the end of 2023, unless the Government decides that it should be preserved and remain part of UK law. The Government may also decide to postpone the expiry of any EU-derived secondary legislation to a later date, but not later than 23 June 2026. It can also decide to restate legislation, replace it or revoke it (without replacing it). Any replacement legislation must not increase the regulatory burden. 

Primary legislation implementing EU law (for example the Equality Act 2010) is not caught by these provisions. However, EU-derived laws contained in Acts, but which were put there by regulations, are caught (such as some of the collective redundancy consultation requirements in the Trade Union and Labour Relations (Consolidation) Act 1992). 

Directly effective EU rights and obligations derived from EU Treaties and Directives will cease to be recognised, enforced or followed in domestic law after 31 December 2023. However, the Bill includes powers enabling their effect to be reproduced if the Government chooses to do so. 

The supremacy of EU law will also end on 31 December 2023 (so UK law will take priority) and general principles of EU will no longer be part of domestic law, unless the Government exercises its power to restate legislation to produce an equivalent effect. 

After the end of 2023, any EU retained law will be known as “assimilated law”.

The Bill also makes it easier for courts to depart from retained EU case law by: 

• Introducing new tests for higher courts (Court of Appeal and Supreme Court) to apply when considering whether to depart from retained EU case law and 
• Allowing lower courts (including tribunals) to ask appeal courts if they remain bound by EU case law if points of law of ‘general public importance’ are at stake. 

Impact on employment law? 

Many of the UK's most significant EU-derived employment rights and protections are contained in secondary legislation. This means they will be affected by the Bill's sunset provisions and could be allowed to expire at the end of 2023. Obvious examples include the Working Time Regulations 1998, the Agency Workers Regulations 2010, the Part-Time Workers Regulations 2000, the Fixed Term Employees Regulations 2002 and TUPE 2006 (with the exception of the service provision changes which gold-plate EU law). It remains to be seen what legislation the Government will allow to expire and what it will choose to restate or replace. 

The inability to rely on directly effective EU rights where equivalent rights are unavailable under UK law could also have an impact, for example on employees bringing equal pay claims. Employees sometimes rely directly on Article 157 of the EU Treaty when bringing an equal pay claim, where comparisons are not confined to employees working for the same or associated employers. Again it remains to be seen whether this is something the Government will reproduce in UK law. 

Employers will face a period of uncertainty while the Government decides on its approach. The Bill received its second reading in the House of Commons on 25 October 2022. During the debate, the Government accepted that some retained EU law within the scope of the Bill’s sunset provisions will have to continue due to the UK’s international obligations, including those in the UK-EU trade and co-operation agreement. The December 2020 trade and co-operation agreement precludes the UK from reducing employment protections where doing so could affect trade or investment between the EU and UK. This is intended to ensure that UK employers are not able to take advantage of lower and cheaper employment standards to undercut their EU counterparts. How this will affect the Government’s decisions on employment laws remains to be seen.