The Retained EU Law (Revocation and Reform) Act 2023

The 2018 European Union (Withdrawal) Act (EUWA) created a specific category of ‘retained EU law’ post-Brexit, to provide continuity in the numerous areas of EU law which applied on 31 December 2020 into UK law.

The Retained EU Law (Revocation and Reform) Act 2023 (REUL) came into force on 1 January 2024.

REUL was originally intended to revoke all EU-derived legislation, including TUPE and the Working Time Regulations. Instead, although from the end of 2023 approximately 600 pieces of legislation were repealed, none of them are significant from an employment law perspective. The effect of REUL is therefore that all EU-derived employment law remains in place, subject to the reforms.

However, REUL does still significantly impact on employment law. This is by removing the principle of supremacy of EU law, so that domestic legislation takes precedence over retained direct EU legislation, and removing the obligation of UK courts to interpret domestic legislation consistently with EU laws. Retained EU law has been re-named ‘assimilated law’ to reflect these changes.

Assimilated law is not set in stone because the government has extensive powers, through secondary legislation – which is subject to much less parliamentary scrutiny than primary legislation – to revoke, amend or replace assimilated law. We do not know how or to what extent the government will use these powers. Note that any particular act, event or reference occurring before the end of 2023 continues to be known as ‘retained EU law’, in respect of which the original EUWA provisions on supremacy and general principles of EU law developed by European Court of Justice (ECJ) case law still apply.

EU-based case law from pre-Brexit judgments – both decisions of the ECJ and domestic decisions that have been influenced by EU law – is still binding on UK lower courts, unless the Court of Appeal or the Supreme Court overrules it, or until UK legislation modifies the relevant assimilated law.

This all creates uncertainty over the status of EU case law and the way EU-derived law will be interpreted by the UK in the future. This is significant for employment law, because so many workers’ rights have been shaped by EU legislation.

As part of the reforms, the government has introduced legislation to preserve the effects of key case law decisions into UK law. Some of this legislation involves ECJ decisions which had not previously been applied by the UK in practice, and so look like new law. Key areas include TUPE – see section one of this edition of Workplace Thinking – and as set out below.

The Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023

These Regulations  amend the Working Time Regulations 1998 as follows:

• Permitting up to four weeks’ holiday to be carried over for up to 18 months where the worker has been unable to take it due to sickness or family related leave, or where the employer has failed to either give them a reasonable opportunity to take the holiday or encourage them to take it
• Confirming that ‘normal remuneration’ for the purposes of calculating the first four weeks of holiday includes, amongst other things, commission and regular overtime
• Abolishing the requirement to keep a full record of all daily hours worked, instead requiring employers to keep ‘adequate’ records demonstrating compliance with the Working Time Regulations 1998
• For leave years starting on or after 1 April 2024, providing a method of holiday accrual for irregular hours and part-year workers based on 12.07% of hours worked in the previous pay period – except in cases of sick or family related leave where a 52 week reference period applies – and permitting rolled up holiday pay for irregular hours and part year workers.

The Equality Act 2010 (Amendment) Regulations 2023

These Regulations amend the Equality Act 2010 to ensure that current protections in relation to pregnancy and maternity discrimination, equal pay, disability discrimination and indirect discrimination continue to apply, subject to various changes effective from 1 January 2024. These include the following:

• Direct discrimination protection for women who are breastfeeding
• Extending pregnancy and maternity discrimination protection to cover unfavourable treatment after the protected period because of pregnancy or pregnancy-related illness during the protected period
• Allowing claims for indirect associative discrimination
• Direct discrimination protection in relation to discriminatory statements regarding recruitment, even where no recruitment exercise is ongoing
• Amending the definition of disability to include a person’s ability to participate fully in working life on an equal footing with other workers, when considering ‘day to day activities’
• Introducing a ‘single body’ rather than single employer test for equal pay.