The retained EU law bill: What does it mean for workers’ rights?

Last week’s retained EU law bill has received little attention so far amid the political and economic fallout from the mini-budget, but it is set to play a profound role in the government’s economic agenda.

The new bill – introduced in parliament by new business secretary Jacob Rees-Mogg – lays the foundations for a major programme of deregulation. It gives ministers extraordinary powers to repeal and revise EU-derived legislation, covering swathes of employment, environmental, and consumer protections. At particular risk are EU-derived workers’ rights, the focus of this analysis.

The bill is concerned with the issue of ‘retained EU law’ – in effect, the body of EU law which was ‘copied and pasted’ or preserved in the UK statute book when the UK left the EU. The government has identified over 2,400 pieces of retained EU law cutting across multiple sectors and policy areas. This covers both retained direct EU legislation, including EU regulations which have been converted into UK law, and EU-derived domestic legislation, including UK laws implementing EU directives which have been ‘saved’ post-Brexit. Within this latter category is most EU-derived employment law, including protections for fixed-term, part-time and agency workers, information and consultation rights, and occupational health and safety.

Not all EU-derived labour law is the same, however. Some are pieces of secondary legislation made under section 2(2) of the 1972 European Communities Act (for example, the working time regulations). Some have been made under other acts of parliament (such as the fixed-term employees regulations), and some are primary legislation (such as the Equality Act). The chart below – from IPPR’s earlier paper on labour rights post-Brexit – gives further examples for each of these three categories.

Source: Author's analysis

The new bill intends to give the government wide-ranging powers to repeal and revise these laws. At the heart of the bill is a ‘sunset clause’ which by default revokes all EU-derived subordinate legislation and retained direct EU legislation on 31 December 2023, unless an exemption is made. This includes all legislation made under section 2(2) the 1972 European Communities Act and other subordinate legislation made with the purpose of implementing EU rights and obligations (see the first two columns of the chart above). The bill also sunsets other EU rights and obligations, including directly effective rights from the EU treaties (for example, the right to equal pay for work of equal value), unless explicitly codified before the deadline.

“But the bill doesn’t stop there: it also gives ministers sweeping new powers to restate, revoke, replace, and update retained EU law”

The bill therefore sets the clock ticking for a mass repeal of retained EU law, including the bulk of EU-derived employment protections. Legislation can only be preserved if a relevant national authority (a UK or devolved government minister) proactively chooses to exempt it from the revocation. And while there is an option to extend the sunset clause for specified legislation, the maximum length for the extension is 23 June 2026 – 10 years on from the date of the EU referendum.

But the bill doesn’t stop there: it also gives ministers sweeping new powers to restate, revoke, replace, and update retained EU law. In particular, clause 15 allows the government to replace secondary retained EU law with “such provision as the relevant national authority considers to be appropriate and to achieve the same or similar objectives”. Moreover, there is an even broader power to get rid of secondary retained EU law and “make such alternative provision as the relevant national authority considers appropriate”. The key limit to these powers is that the overall effect of changes in a particular subject area cannot ‘increase the regulatory burden’ – making clear the deregulatory objectives behind the bill.

This means that, under clause 15, ministers have the freedom to make major changes to EU-derived employment protections without the need for an act of parliament. Instead, they can use statutory instruments, which involve considerably less parliamentary scrutiny. This is particularly relevant for employment legislation originally made under section 2(2) of the European Communities Act, like the working time regulations, given that they have no parent act under which changes can be made.

“The working time regulations – which include the 48 hour working week, minimum rest periods, and annual paid leave entitlements – appear to be at particular risk”

There are some provisions for parliament to have a say in this process: for instance, in some cases, statutory instruments under clause 15 are required to follow the affirmative procedure, which involves greater parliamentary scrutiny. But, in practice, the bill gives the government virtually cart blanche to change most EU-derived labour laws as it likes – not least because, if ministers decide to sit on their hands, the sunset clause threatens their complete repeal by the end of 2023.

Four concerns immediately stand out. First, there is a direct threat to core rights and protections. The working time regulations – which include the 48 hour working week, minimum rest periods, and annual paid leave entitlements – appear to be at particular risk, according to recent media reports.

Second, the new bill sets the stage for renewed tensions with the EU. In 2020, the UK and the EU negotiated a series of ‘level playing field’ provisions as part of their free trade agreement. Reducing labour protections in a way which affects trade or investment could trigger a breach of these provisions and result in a future dispute – potentially leading to new trade barriers.

Third, the sunset clause creates extraordinary uncertainty for businesses and workers. The threat of the mass repeal of retained EU law – including many EU-derived labour protections – raises the prospect of legal chaos. During a period of exceptional economic turbulence, another arbitrary Brexit deadline seems self-defeating.

Finally, the bill points to a concerning lack of democratic scrutiny and accountability. Ministers will be given near free reign over critical protections for workers’ rights – alongside a range of other issues – with limited parliamentary involvement. This continues a dangerous precedent of growing executive power. Parliament is at risk of becoming increasingly marginalised as the government forges ahead with its post-Brexit plans.

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