Supremacy and sunset clauses

The Retained EU Law (Revocation and Reform) Bill (the "REUL Bill") moved from the House of Commons to the House of Lords on 19 January 2023; it is currently on its second reading in the House of Lords.

By virtue of its “sunset” provision, the REUL Bill provides for the expiration (on 31 December 2023) of all unprotected EU-derived secondary legislation. This includes the right to an entitlement of 20 days’ annual leave, family friendly rights, protections from dismissal where employment is transferred or outsourced, maternity, pregnancy, part-time and fixed term worker protections and certain health and safety requirements.

The REUL Bill has the potential to revoke over 3,800 pieces of EU-derived legislation in one fell swoop. Importantly, however, this sunset provision will only catch a defined sub-set of EU-related secondary legislation, meaning that laws contained in Acts of Parliament would not fall within scope.

Impact on UK employment law

In the context of employment law, the REUL Bill has the potential to impact a vast array of employment-related regulations, including:

• The Agency Workers Regulations;
• The Fixed Term Employees Regulations;
• The Information & Consultation of Employees Regulations;
• The Maternity & Parental Leave Regulations (in respect of parental leave and potentially certain aspects of the maternity regime but only insofar as the regulations operate to implement EU law);
• The Part-time Workers Regulations;
• The Working Time Regulations;
• TUPE (only insofar as it implements EU law); and
• Various Health & Safety regulations.

Precedent and legal supremacy

Additionally, since the REUL Bill explicitly ends the principle of EU supremacy, the UK courts would no longer be bound to interpret domestic legislation in line with wider EU case law. This ending of EU supremacy would also repeal some directly effective EU rights including the right to equal pay under the Treaty on the Functioning of the European Union (although such rights may be codified via a restatement process described below).

Moreover, the practice of reading words into domestic legislation, to conform with underlying EU law, would no longer be required.

The REUL Bill also encourages courts to be enthusiastic about setting out new tests, speeding up the process of departing from ECJ caselaw; allowing lower courts (including employment tribunals) to challenge (when of “general public importance”) whether they are bound by certain retained caselaw. This provision alone has the potential to cause chaos in employment tribunal litigation if not thoroughly contemplated in advance of the REUL Bill’s enactment.

Legislative protections

The REUL Bill does provide for certain protections. The regulations mentioned above would not fall away if the government specifically legislates to:

• Preserve them before the end of 2023.
• Postpone, before the end of 2023, their revocation to no later than 23 June 2026 (which also extends the window to preserve them).
• Restate them as purely domestic law before the end of 2023.
• Replace them with new legislation before the end of 2023.

Notably, the power to postpone cannot be used by devolved authorities, unlike the concurrent powers in the REUL Bill.

Proposed amendments and next steps

As the REUL Bill is considered in both chambers in the Houses of Parliament, it has been subjected to various criticisms and commentary. For example, Labour has proposed amendments aiming to retain key workers’ rights including annual leave and maternity rights. There have also been calls to shift the REUL Bill’s approach – focussing on a sunrise clause rather than a sunset clause – which would ensure that all EU law (including UK statutory instruments introduced to comply with EU law) would remain, unless or until it is specifically amended or repealed.

Given employment law’s complexity, it is reasonably likely that postponement powers will be used to keep certain regulations in place, while appropriate replacements are mooted. However, on the other hand, with a general election on the horizon, a new government could approach this reform differently. Therefore, the current government might be keen to push reforms through before an election takes place.

Amendments had been tabled to exclude listed instruments relating to employment law from the sunset clause; however, these amendments were defeated in the House of Commons.

Considerations for employers

We are still uncertain what shape or form (if at all) the REUL Bill will take. All that remains certain is that the progress of the REUL Bill will be one to watch throughout the year. If passed, its effects will be significant, not just within the employment sphere, but more broadly.