The Retained EU Law (Revocation and Reform) Bill
Earlier this year the government signalled its post-Brexit determination to review retained EU law. It has now published the Retained EU Law (Revocation and Reform) Bill (the Bill), which has potentially significant implications for UK employment law.
The Bill will “sunset” most retained EU law contained in secondary legislation such as regulations, meaning that unless such law is preserved in some form (discussed further below), it will expire on 31 December 2023. The principle of directly effective EU rights will end on the same date. In the employment context, this could include legislation such as TUPE, the Working Time Regulations, rules for agency workers and some equal pay provisions. However, rights contained in primary legislation, such as the Equality Act, should not be affected.
It does not automatically follow that most employment related EU retained law will expire. Some retained EU law will be preserved and fully assimilated into domestic law and government departments will now embark upon a process of deciding what to preserve and what to allow to expire. There will be a period of uncertainty until there are further announcements about what retained EU employment law will be saved and what will be reformed or jettisoned.
The government is also intending to make it easier for courts to depart from existing CJEU caselaw. This will include giving lower courts the power to refer EU caselaw to higher courts that have the power to depart from it if points of law are of general public importance. While this may make the process of de-coupling from historic CJEU caselaw quicker, potential benefits could be offset by additional legal uncertainty. This uncertainty could be particularly acute in the employment arena, given the EU’s influence on pre-Brexit employment rights.
The growth plan
One aspect of the growth plan announced on 23 September of particular interest to employers is the decision to repeal the off-payroll working rules introduced in April 2021 from April 2023. After that date, end users will no longer have to carry out employment status determinations if they are engaging someone via a personal services company. Responsibility for tax and NICs will be the responsibility of the individual providing services, not the end user, as was the case before the IR35 reforms were introduced.
Further changes to industrial relations law may also be in prospect. The growth plan commits to introducing minimum service levels on public transport, designed to minimise the disruption caused by industrial action. The government is also intending to introduce legislation to ensure meaningful employer pay offers are put to employees, with the aim of making it easier to settle industrial disputes.
Next steps
Most employers will wave goodbye to the complexities introduced by the off-payroll working rules without regret. However, the uncertainty created by the Bill is less welcome. It is to be hoped that the government clarifies which retained EU law it intends to preserve without undue delay, to allow businesses to plan accordingly. TUPE’s fate will be particularly important in that respect.
Authored by Jo Broadbent and Stefan Martin.
