EU Retained Law Bill: Employment rights at risk?

Written by: Lucas Nacif

On Wednesday 18 January 2023, Parliament will reach the report stage for the Retained EU Law (Revocation and Reform) Bill (“the Revocation Bill” or “the Bill”). This Bill will give Ministers the power to determine whether EU-derived legislation is replaced or revoked completely.

During the report stage, the House of Commons will have the opportunity to consider proposed amendments to the Revocation Bill.

Background

The Revocation Bill was introduced by the Department for Business, Energy and Industrial Strategy on 22 September 2022. The purpose behind this Bill is to end the special status of retained EU Law in the UK on 31 December 2023 (see press release).

The Government intends to abolish the status of Retained EU Law by stating that all EU-derived secondary legislation and retained direct EU legislation will expire on 31 December 2023, unless otherwise preserved. The Revocation Bill also aims to abolish the principle of supremacy of EU law, the general principles of EU law and directly effective EU rights on 31 December 2023.

The Bill also gives Ministers the power to allow certain pieces of retained EU law to postpone its expiry until 2026, so that the Government can have additional time if necessary to assess whether some retained EU law should be preserved.

Retained EU law that is preserved on 31 December 2023 will become known as “assimilated law” and courts will be no longer be required to apply general principles of EU law when interpreting assimilated law.

Significantly, the Bill confers extensive powers to the Executive, by granting powers to Ministers to create secondary legislation to amend, repeal or replace retained EU law.

How will this affect Employment rights?

The Revocation Bill could result in the potential loss of all EU-derived secondary legislation, including the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”) and the Working Time Regulations 1998 (“WTR”). Although the Government has the power to preserve TUPE and WTR as assimilated law by way of secondary legislation, there is a risk that the Government will have insufficient time before 31 December 2023 to assess what EU-derived secondary legislation and retained direct EU legislation should be preserved.

The Revocation Bill will not only result in the revocation of numerous secondary legislations, but it also abolishes direct effect, EU law supremacy and the general principles of EU law in the UK legal system. This means, for example, that equal pay claimants will be unable to rely on Article 157 TFEU, which, unlike section 79 of the Equality Act 2010 (“EqA 2010”), does not require claimants and their own chosen comparators to be in common employment in order for an equal pay claim to proceed.

The ECJ held in Lawrence v Regent Office Care Ltd [2003] ICR 1092 that Article 157 allows a comparison to be made between employees of different employers so long as it can be shown that any pay differential can be attributed to a “single source” – a single body responsible for the inequality that has the power to restore equal treatment in the workplace. As confirmed by the ECJ in K v Tesco Stores Ltd [2021] ICR 1524, Article 157 is capable of direct effect in both equal work and equal value claims.

Article 157 TFEU therefore allows claimants in equal pay claims to displace the restrictive provisions of s 79 EqA 2010 by enabling claimants to argue that their pay should be equal to that of men who are not, on the face of it, valid comparators under s 79. However, the ability to rely on Article 157 TFEU in equal pay claims may no longer be possible after 31 December 2023, if the Revocation Bill is given Royal Assent.

Recent developments

Stella Creasy MP and David Davis MP introduced a cross-party amendment which aims to provide more transparency in the process behind determining what becomes assimilated law after 31 December 2023. This proposed amendment would require the Secretary of State to publish a list of legislation being revoked and lay a copy before Parliament. Any legislation not included in this revocation list will not be revoked.

The cross-party amendment also gives the House of Commons or the House of Lords the power to make a resolution to amend the revocation list.

If the cross-party amendment is passed on 18 January 2023, this will provide Parliament with oversight of what legislation becomes revoked by 31 December 2023 and ensure that the House of Commons is given the ultimate say on which legislation will become affected by the Revocation Bill (see Amendment Paper dated 16 January 2023 at page 10).

Given the broad scope of the Revocation Bill and the potential legal uncertainty that may arise after 31 December 2023, the proposed cross-party amendment from Stella Creasy MP and David Davis MP is welcomed.