Post Brexit Reforms to EU Legislation

02 January 2024 - Joy Shaw

Many business owners wishing to devote their time to the furtherance of their own specific activities, rather than having to get to grips with new regulations may initially be dismayed to hear that laws relating to employment and equality rights will be changing.

The proposed changes are a result of the UK leaving the EU, but the Government is keen to demonstrate that these will be to the benefit of employers, reducing red tape, whilst retaining important employee rights.

To facilitate the end of the transition period of the UK leaving the EU, on 31 December 2020, and the smooth continuation of trade between the UK and the EU, much of EU law was initially retained within UK legislation.

This is known as REUL – Retained EU Legislation

The importance of this for trade was that nothing changed, the status quo was maintained.

One of the main proposals in the campaign for Brexit, however, was that in the future the UK would set its own laws.

The aim of REUL reforms therefore is to keep the best of EU legislation to maintain standards in the UK, and facilitate continued trade and co-operation with the EU, whilst implementing changes to reduce unnecessary bureaucracy.

The Department for Business and Trade has carried out a number of consultations with business in recent months culminating in the REUL (Revocation and Reform) Act 2023 statutory instruments, that have been laid before Parliament.

This is designed to end the special status of retained EU law in UK legislation, and enable EU law to be more easily amended, revoked and replaced.

We have already considered statutory guidance issued in October 2023 affecting the Wine industry.

In Nov 2023 further statutory guidance was issued affecting Employment Rights and the Equality Act 2010.

Proposed Changes to Employment Rights

The statutory instrument covers three areas for reform to employment rights:

  • To reduce time-consuming reporting requirements under the Working Time Regulations with regard to record keeping
  • To simplify annual leave and holiday pay calculations
  • To streamline the regulations that apply when a business transfers to a new owner, known as “TUPE”, Transfer of Undertakings (Protection of Employment) Regulations by reforming the consultation requirements

The aim of the new legislation is not to remove rights from employees but to reduce the unnecessary bureaucracy that prevent those rights from working and allowing business to benefit from additional freedoms to amend retained EU legislation post Brexit.

In particular, the Government considers it appropriate to ensure the following three principles of employment rights are maintained and that the law has the same effect in practice as it did before the EU law feature was removed:

  • The right to carry over annual leave where an employee has been unable to take it due to being on maternity or other family related leave or sick leave
  • The right to carry over annual leave where the employer has failed to inform the worker of their right to paid annual leave or enable them to take it and
  • The rate of pay for annual leave accrued under the Working Time Regulations.

The Government proposed these changes based on the following beliefs:

  • That EU requirements for reporting under the WTR are disproportionately onerous on business without giving workers substantive new rights
  • That EU overtime legislation has become complicated for employers and in some cases does not achieve the original intended results
  • That some Employers find EU TUPE regulations burdensome and that by introducing additional flexibility it is possible to make transfers quicker and easier whilst retaining important protection for employees.

Kevin Hollinrake MP who is minister for Enterprise, Markets and Small business commented in respect of Human Rights:

“In my view the provisions of the Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023, are compatible with the Convention rights.”

Proposed changes to the Equality Act 2010

The changes are being applied in order to maintain the existing legal position when the interpretive effects of retained EU law cease to apply.

The Government aims that this instrument will continue to offer the same protection after the end of 2023 in relation to pregnancy, maternity and breastfeeding, indirect discrimination, access to employment and occupation, equal pay and the definition of disability.

Whilst the headlines of employment rights and equality act legislation may seem an area of note for both employers and employees, the starting point of reforms seems to have very little effect on employee rights, and to be a genuine attempt to make systems more efficient for employers.

This could however pave the way for further reforms and a gradual divergence of the UK from the EU, with future changes a distinct possibility.

Those concerned with employee rights will certainly wish to keep this area under review, in an everchanging world of global trade and employment of workers overseas.

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