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Understanding the Retained EU Law Bill

Calendar June 19, 2023

Understanding the Retained EU Law (Revocation and Reform) Bill – Latest Developments and Implications


Amidst all the publicity surrounding the death of the late Queen, an important piece of employment legislation was proposed, initially overlooked in the eyes of many. This is the Retained EU Law (Revocation and Reform) Bill (the “Bill”). It aims to address the future of EU laws that were retained after the country’s formal departure from the European Union. Since its introduction in September 2022, it has undergone significant developments, presenting a minefield of complex issues for both employers and employees alike. Initially, the Bill included a controversial “sunset clause” that planned to automatically revoke approximately 4,800 EU-era rules by December of 2023. In the employment sphere, this would mean the potential deletion of (to name just a few): the Working Time Regulations (WTR), the Transfer of Undertakings (Protection of Employment) Regulations (TUPE), Maternity and Parental Leave Regulations and Agency Worker Regulations.

It is not wholly unsurprising, therefore, that the UK government announced recently that it was pursuing a more targeted approach going forward, replacing the current sunset provisions in the Bill with a more defined schedule of just under 600 retained EU laws to be revoked.

Laws to be Revoked:

The laws identified for revocation include regulations related to posted workers, European Cooperative Society regulations, and working time for road tanker drivers. These revocations aim to streamline the statute and remove regulations that no longer make sense post-Brexit. It is important to note that the UK government has clarified that the vast majority of retained EU employment laws will be preserved in areas where no reforms or revocations are proposed. They have also confirmed that with the proposed revocations, they are not intending to weaken workers’ rights – a concern that many commentators expressed when the Bill was initially proposed.
This targeted approach no doubt provides a degree of relief for employers and workers who were concerned about the sudden disappearance of workers’ rights. Through careful selection of which laws to be revoked, the government aims to strike a balance between maintaining essential protections for employees and reducing unnecessary regulatory burdens.

Proposed Reforms:

In addition to the revocations, on May 10, 2023, the UK government also published a policy paper Smarter regulation to grow the economy (the “Policy Paper”) setting out in brief some proposals to reform employment law, including:

  • Reforms to holiday pay, the WTR, and TUPE; and
  • Limiting the duration of post-termination non-competes.
  • Further details on these proposals were outlined in a published consultation on “Retained EU Employment Law” (the “Consultation”). The Consultation does not include the plans in respect of the non-competes, which are instead covered by a recent response to a previous consultation on non-compete clauses.

    The reforms set out in the Policy Paper and the Consultation are aimed at de-regulation and removing unnecessary complexity to promote economic growth.

    The proposals include:

  • Removing the requirement to keep working hour records:
  • This is to alleviate the uncertainty regarding employers’ recordkeeping obligations. The Consultation proposes legislating to clarify that businesses do not need to keep a record of daily working hours of their workers to show their compliance with the WTR. Although the removal of legal uncertainty is always welcomed, the impact of this may be overstated, as employers will no doubt still want to keep track of workers’ working time for other purposes, such as National Minimum Wage compliance.

  • Merging workers’ basic and additional holiday entitlement:
  • The Consultation proposes combining the different leave entitlements into one pot of 5.6 weeks of paid leave. Currently, different rules apply in respect of minimum holiday pay. No specific plans are put forward, but the Consultation seeks views as to how holiday pay is currently calculated and how employers and workers think “normal remuneration” should be defined in legislation.

  • Reducing Employers’ TUPE consultation obligations:
  • Under TUPE, employee representatives must be in place before employers can inform and consult on proposed TUPE transfers. The government is proposing to permit employers to consult directly with employees for:

  • Small businesses with fewer than 50 employees; and
  • Businesses where fewer than 10 employees are transferring.
  • In addition, the consultation asks the open question of whether other aspects of TUPE could also be improved.

  • Limiting the length of post-employment non-compete clauses:
  • The current proposal moves to impose a limit of three months to the duration of post-employment non-compete restrictions (i.e., restrictions prohibiting an employee from going to work for a competitor or starting a rival business after they have left employment).

    What does the future look like?

    All the changes listed are only proposals and timelines are not clear. The proposed changes to the WTR, holiday pay and TUPE are subject to the outcomes of the published consultation (which closes on July 7, 2023). The Bill is also currently facing scrutiny and amendments in the House of Lords. The proposed amendments seek to grant UK Parliament and devolved governments greater oversight than Westminster ministers in deciding which laws to revoke and to enhance scrutiny of the government’s Brexit promises. Both the House of Commons and the House of Lords must agree on the precise wording of the Bill before it can become law. And it is still unclear how much of this will work in practice, including how applicable laws are going to be interpreted following the end of the supremacy of EU law.

    Personal Opinion:

    The Bill represents in my opinion, a significant undertaking as the UK navigates this post-Brexit landscape. Despite initial concerns such as which body should be in charge of deciding whether laws are scraped or retained, the proposed reforms detailed in the Policy Paper and the Consultation reflect the government’s intention to simplify regulations while striking a balance between employer flexibility and employee protections. If the government continue to head down this path of deliberation, the ongoing developments in Employment law are poised to expand, providing crucial clarity and guidance for both employers and employees. One thing is for sure though, it’s evident that extracting years of entanglement of our employment laws with those from the EU is a trickier job than first envisioned. As the Policy Paper implies, this might just be the first in a series of de-regulation proposals. Therefore, employers will need to keep a keen eye on this space as developments continue to unfold.

    By Suraj Purohit.
    Employment Paralegal at Kalra Legal Group


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