Retained EU Law (Revocation and Reform) Bill

Written evidence submitted by the Law Society of England and Wales (REULB86)

Summary

 

1. The Retained EU Law Bill could see a devastating impact on legal certainty in the UK and a negative impact on its status as an internationally competitive business environment.

2. The speed at which government intends to review retained EU law is a recipe for bad law-making and, coupled with the bypassing of parliamentary scrutiny and stakeholder consultation, could yield a period of uncertainty over the status of regulations. The Law Society recommends extending the timeline for reform and removing the deadline of 31 December 2023. We would support Amendment 26, which would change the date that the revocation of EU-derived subordinate legislation and retained direct EU legislation would take effect to the end of 2026 to provide time for adequate scrutiny and implementation.

3. The Bill raises key constitutional questions around ministerial powers and parliamentary sovereignty, as well as the devolution settlements with the nations of the UK potentially enforcing different regulations, which would lead to confusion for businesses and consumers alike.

4. The consequences of the legislation must also be considered, especially in areas such as employment law where workers could lose access to long-established rights that now form an integral part of Britain’s reputation as a fair society, such as holiday pay or protection against fire and rehire. The Law Society would support the addition of Amendment 90 to ensure that all instruments to be revoked by the Bill are included in a Definitive List, to provide greater clarity to individuals and businesses as to which legislation will be impacted.

5. The Bill could also have a significant impact on the UK’s relationship with the EU, threatening the UK-EU Trade and Co-operation Agreement (TCA) upon which the operations of many sectors are dependent.

Introduction

6. The Law Society is concerned that the Retained EU Law (Revocation and Reform) Bill could see a devastating impact on legal certainty in the UK. Such a transformation of the UK statute book as would be made possible by the Bill risks undermining the UK’s reputation as an attractive international business environment.

7. Through the creation of a sunset clause (causing most retained EU law to expire at the end of 2023), the G is setting itself an overly ambitious target to review and consider important areas of domestic legislation by the end of next year. In sticking to that target, the government risks a rush of key legislation ahead of the end of 2023, not giving itself, stakeholders, or Parliament enough time for adequate consideration due to competing priorities facing the UK, such as the cost-of-living crisis. The Law Society would therefore call for an extension of the timeline to review retained EU law and the removal of this deadline. We would support Amendment 26, which would change the date that the revocation of EU-derived subordinate legislation and retained direct EU legislation would take effect to the end of 2026 to provide time for adequate scrutiny and implementation.

8. Indeed, the Bill raises questions about parliamentary sovereignty and the rule of law in the UK. It provides extensive delegated powers that enable ministers to revoke, restate, replace or update retained EU law, while effectively bypassing parliamentary scrutiny and stakeholder consultation – key principles essential for good law-making. Furthermore, if laws were to be changed through these delegated powers, this could run the risk of upsetting the devolution settlements with Wales, Scotland, and Northern Ireland.

9. Parties are likely to be encouraged to bring litigation looking to overturn previous rulings based on EU case law, creating more pressure on a justice system that is already facing a significant backlog.

10. The later consequences of the proposed legislation must also be considered. Elements of the over 2,400 pieces of retained EU law - including on topics such as employment law or consumer rights - provide confidence for businesses and individuals and underpin the UK’s reputation as a fair and just society. The Law Society would support the addition of Amendment 90 to ensure that all instruments to be revoked by the Bill are included in a Definitive List, to provide greater clarity to individuals and businesses as to which legislation will be impacted.

11. Furthermore, regulatory divergence with the EU may make trade with the bloc more difficult for UK businesses. It is important that the UK honours its level playing field commitments under the EU-UK Trade and Cooperation Agreement in areas such as employment, social standards, and the environment.

Legal certainty and sunset clause

12. The Law Society is concerned that the Bill could see a devastating impact on legal certainty in the UK. By introducing 31 December 2023 as a sunset date by which all remaining retained EU law will either be repealed or assimilated into domestic law, the Government risks creating exceptional uncertainty for businesses and workers, both domestic and international, as well as their own governmental departments, due to confusion over what the legal landscape will look like on 1 January 2024.

13. This is an ambitious timeline and may lead to Parliament facing a rush of legislation to hurry through at the end of next year. This is likely to lead to laws not receiving adequate scrutiny. Furthermore, the Bill does not specify any requirement for consultation on changes to retained EU law, which leads to the danger of bad law being passed as there will not be the chance for external experts to offer suggestions for improvement or for scrutiny of any proposed changes to take place.

14. Such a major transformation of the UK statute book risks undermining the UK’s reputation as a renowned and attractive international business environment. Businesses cannot have the confidence to invest in the UK if they are uncertain of the regulatory and legal landscape.

15. The Law Society calls on the Government to remove this arbitrary deadline to allow Ministers, Government officials, parliamentarians, and key stakeholders, including businesses, an appropriate amount of time in which to consider each piece of retained EU law, scrutinise any suggested reforms, and prepare for any incoming changes. We would support Amendment 26, which would change the date that the revocation of EU-derived subordinate legislation and retained direct EU legislation would take effect to the end of 2026 to provide time for adequate scrutiny and implementation.

Constitutional Issues

Ministerial powers

16. Clauses 10 and 11 in the Bill grant Ministers "Henry VIII"-style powers to amend retained EU law. The Law Society believe that such delegated powers should be used only when their use can be clearly anticipated and defined. Broad or vague powers are inappropriate. When broad powers are sought, the Government should allow time for Parliament to effectively scrutinise any secondary legislation, which is unlikely to be the case with this Bill due to the short timelines envisaged for amending retained EU law.

Devolved administrations

17. Clause 1 (2) allows different devolved nations to adopt different regulations so this could see England, Wales and Scotland applying different laws across areas of devolved competence. For example, the Scottish Government could decide to reinstate retained EU law related to product standards that would otherwise be subject to a sunset clause. This could have consequences for the UK Internal Market Act, with English producers technically having the right to sell goods or services into Scotland under the Act even if Scotland had adopted more stringent regulations. This could lead to tensions between the devolved administrations and confusion for businesses and consumers.

Legislative consequences

18. While the Bill establishes a new framework for the expiry of most retained EU law, it is important to also consider what is at stake and what kinds of provisions are included in retained EU law.

Employment Law

The removal of basic employment rights

19. Unless a proactive decision is taken to keep EU derived employment law legislation then many of the basic protections workers take for granted could disappear. This includes:

a) Holidays: being allowed to take paid annual leave – leaving only a minimum entitlement of eight bank holidays for UK workers.

b) Equal Pay: being able to challenge your employer if a member of the opposite sex gets paid more for doing the same job.

c) Family Friendly policies: being paid for maternity, paternity, and parental leave along with any protections against unfair treatment, such as being sacked or being overlooked for promotion, when taking such leave.

d) Rest Breaks: the right to have a rest break of 20 minutes when working over six hours and the right to have a two-day break every fortnight.

e) Pregnancy protections: protections against discrimination for pregnant women and women on maternity leave, and the right to suitable alternative work on no less favourable terms.

f) Security if your job is outsourced: outsourced workers can have their pay cut, sick and holiday pay and leave cut, and they do not even need to be informed and consulted before a transfer. Outsourced workers could simply be sacked if their employment is taken over by a new organisation.

g) Safety at work: removal of support and paid time off for health and safety reps, whose role it is to protect and keep people safe at work.

h) Fire and Rehire: removal of the few existing protections against fire and rehire and mass redundancy.

20. The Law Society would support the addition of Amendment 90 to ensure that all instruments to be revoked by the Bill are included in a Definitive List, to provide greater clarity to individuals and businesses as to which legislation will be impacted.

Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE)

21. The repeal of TUPE would create very significant uncertainty for employers and employees alike, particularly in relation to outsourcing and retendering arrangements. Purchasers of businesses and those taking on contracts through outsourcing and retendering arrangements would lose the current level of certainty that they enjoy that they will inherit the current workforce potentially needed to conduct the activities in question.

22. Commercial and practical chaos may also result in relation to existing outsourcing and other contracts which were concluded on the basis that TUPE would apply on their termination and contain commercial exit provisions which would no longer be consistent with the legal position. When repeal was proposed of the "service provision change" provisions of TUPE ahead of the amendments made to the legislation in 2014, the majority of business opinion was that those provisions should be retained given the concern that their repeal would lead to the loss of the relative legal certainty and level playing field that they established for the outsourcing and retendering markets. Repealing TUPE would likewise create immense commercial uncertainty in addition to diminishing employees’ rights very significantly.

23. The repeal of TUPE would diminish employees’ rights significantly as they would lose the important protections that TUPE provides on business sales and other transactions to which the legislation applies – the right to transfer across with terms protected, to claim unfair dismissal if dismissed because of the transfer other than for genuine business reasons, and the obligation on the relevant employers to conduct consultation about the transfer process with appropriate representatives.

Relationship with the EU

24. Some retained EU law being considered for review is required to continue to operate the UK’s international obligations, including the TCA, the Withdrawal Agreement, and the Northern Ireland protocol. The Government must ensure that such law is safeguarded to uphold the UK’s international obligations and to ensure it does not further jeopardise the UK’s relationship with the EU.

25. Indeed, the Bill commits ministers to an obligation not to impose further regulation on UK businesses and consumers when reviewing the retained EU law within their remit. Significant divergence from EU standards could see tariffs imposed upon the UK or even the suspension of parts of the TCA under the level playing field agreements.

26. Changes to data protection regulation must also be carefully considered as they may lead to the EU withdrawing its adequacy decision in respect to the UK. This would make the transfer of data from the EU more difficult for UK businesses and therefore have significant impact on the legal sector, which contributes £60 billion to the UK economy, and its £5 billion worth of exports.

Conclusion

27. The Retained EU Law Bill could see a devastating impact on legal certainty in the UK and a negative impact on its status as an internationally competitive business environment. The speed at which government intends to review retained EU law is a recipe for bad law-making and, coupled with the bypassing of parliamentary scrutiny and stakeholder consultation, could yield a period of uncertainty over the status of regulations. The Law Society recommends extending the timeline for reform and removing the deadline of 31 December 2023. We would support Amendment 26, which would change the date that the revocation of EU-derived subordinate legislation and retained direct EU legislation would take effect to the end of 2026 to provide time for adequate scrutiny and implementation.

28. The Bill raises key constitutional questions around ministerial powers and parliamentary sovereignty, as well as the devolution settlements with the nations of the UK potentially enforcing different regulations, which would lead to confusion for businesses and consumers alike.

29. The consequences of the legislation must also be considered, especially in areas such as employment law where workers could lose access to long-established rights that now form an integral part of Britain’s reputation as a fair society, such as holiday pay or protection against fire and rehire. The Law Society would support the addition of Amendment 90 to ensure that all instruments to be revoked by the Bill are included in a Definitive List, to provide greater clarity to individuals and businesses as to which legislation will be impacted.

30. The Bill could also have a significant impact on the UK’s relationship with the EU, threatening the UK-EU Trade and Co-operation Agreement (TCA) upon which the operations of many sectors are dependent.

November 2022