The Retained EU Law (Revocation and Reform) Bill was published the day before the Chancellor’s mini-budget announcement on 23rd September 2022.
The purpose of the Bill is to automatically repeal any retained EU Law by 31 December 2023 at the earliest unless specific legislation is brought in to retain it. The Scottish Government has, in its own announcement expressing serious concerns about the Bill, referred to 2,400 pieces of legislation that will be affected on matters such as food hygiene standard and environmental issues. Substantial areas of Employment Law are also among the legislation affected.
In some quarters the description “bonfire of employment rights” has been used. In the Government’s view it is part of putting “the UK statute book on a more sustainable footing” and moving to “reclaim the sovereignty of Parliament”.
The Government’s stated priority in the mini-budget is to boost growth by encouraging investment and spending. Many of the changes announced are linked to this and a desire to “maximise the potential of the private sector”. Measures such as removing the cap on bankers’ bonuses are aimed at providing financial institutions with significant flexibility on how they reward their staff, and consequently making it more attractive to base their employees in London compared to other leading financial hubs. Allowing strike action to be taken only once any pay offers have been put to a member vote will also be likely to be viewed as good news by employers as will the removal of the complex IR35 rules.
Certainly there are some areas of EU-derived Employment Law that are similarly viewed by employers as cumbersome and unduly restrictive. The way that holiday pay is calculated and the maximum 48-hour working week have been cited as likely potential areas for change and the Agency Worker Regulations have never been popular. It is therefore fair to say that some degree of change is inevitable but it seems premature to refer to a “bonfire of employment rights” at this stage.
Taking the maximum 48-hour working week as an example, the efficacy of the current legislation is at best questionable. Many employees waive their right to limit their maximum working hours in this way. It does not take much time to find articles and reports that refer, for example, to NHS workers working lengthy shifts and excessive hours often in critical roles. The current position on holiday pay on the other hand is often viewed as complex and confused with both employers and employees not knowing what, in truth, should be being paid.
It is also important to note that currently many sectors continue to have severe challenges in attracting and retaining workers. There is undeniably a need at this time for the UK to be able to attract labour from overseas. Should workers’ rights be severely compromised it is unlikely that skilled workers in particular would choose to come to work in the UK. This would hamper growth significantly, going against the Government’s stated aims. The Government will also be mindful that a general election will need to take place within 12 months of the proposed date for the repeal of retained EU Law and it is unlikely that a significant erosion of workers’ rights prior to then would go unnoticed.
The TUPE regulations are another example of legislation derived from EU Law and, although complex, they are generally viewed as an adequate and useful way to manage employee transfers on business sales or service provision changes. It is therefore likely that these regulations would be retained, albeit it would be unsurprising if they were amended so that, for example, employers were able to harmonise the terms of transferring employees with those of their existing workforce. It is perhaps these types of changes that we should expect to see in future.
All said, at this early stage we can only speculate what the Bill will mean in practice for UK Employment Law but we will follow developments with interest and keep you appraised of developments. For more information please contact a member of our employment team.
