Sunset clause removed from the Retained EU Law (Revocation and Reform) Bill

The Retained EU Law (Revocation and Reform) Bill

As a reminder, after the UK left the EU it entered a transition period which ended at 11pm on 31 December 2020. To avoid legal uncertainty, retained EU law became domestic law at the end of the transition period.

The purpose of the Bill is to end the status of retained EU law from 31 December 2023 (the sunset clause) unless it has been preserved before that date or the sunset clause has been triggered to extend the deadline to 23 June 2026.

There are around 4,800 pieces of legislation that need to be reviewed before a decision can be made about whether they should be preserved, reformed or revoked. A wide range of organisations including the CIPD, Institute of Directors and TUC expressed their concern at the confusion and disruption for businesses that revoking EU laws and legal principles would cause. Concerns were also expressed about the feasibility of reviewing such an amount of legislation in the time available.

Back in November 2022, the Regulatory Policy Committee published its formal opinion on the Government’s impact assessment for the Bill. It gave it a formal red rating as “not fit for purpose” and the Government “has not made a sufficient case” for the sunsetting of all retained EU regulations by December 2023.

On 10 May 2023, Kemi Badenoch, the Secretary of State for the Department for Business and Trade announced that amendments would be made to the Bill and a new approach was proposed.

Rather than keeping the sunset clause, the Government has decided instead to remove it from the Bill and prepare a Schedule of the retained EU laws that it intends to revoke at the end of 2023. That Schedule was published yesterday and contains around 600 pieces of legislation. The remaining legislation will be retained but can still be revoked or reformed “after proper assessment and consultation“.

Policy paper: Smarter regulation to grow the economy

The policy paper published on 10 May 2023 is the first in a series of upcoming regulatory reform announcements. In the employment law context, the paper sets out proposed changes “that will cut red tape for businesses and save £1 billion a year while safeguarding the rights of workers.” Specifically:

• Reducing Working Time Regulations reporting burdens

The Government plans to reduce time-consuming and “disproportionate” reporting requirements but without affecting workers’ rights. It will consult on removing the need to keep working time records for almost all members of the workforce. It will also consult on reducing the administrative burden and complexity of calculating holiday pay and proposes introducing rolled-up holiday pay, so that workers can receive their holiday pay with every payslip. Finally, it proposes merging the current two separate statutory leave entitlements (basic and additional) but with no reduction in the amount of statutory annual leave.

It intends to make these reforms this year but there is no further information about the consultation process.

• Simplifying the TUPE Regulations

The Government’s view is that the Regulations provide important protections for employees but there are some simplifications that can be made to reduce the administrative burden without changing employee rights. Businesses cannot consult employees directly where they do not have employee representatives in place and must elect new employee representatives.

The Government will consult on removing this requirement for businesses with fewer than 50 people where the transfer affects fewer than 10 employees.

• Reforming non-compete clauses

In order to boost competition and innovation the Government intends to legislate (when Parliamentary time allows) to limit the length of non-compete clauses to three months. This change will not impact on employers’ ability to use paid notice periods or gardening leave, or to use non-solicitation clauses.

The potential implications of the proposed changes to employment law set out in the policy paper are significant and we will keep you updated.