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DOI: 10.5553/EELC/187791072023008004002

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2023/30 The Retained EU Law Revocation and Reform Act 2023: what it is and what it does (UK)

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Catherine Barnard, "2023/30 The Retained EU Law Revocation and Reform Act 2023: what it is and what it does (UK)", European Employment Law Cases, 4, (2023):158-162

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    • 1. Introduction

      The question is how do you leave a legal system (the European Union) which you’ve been part of for more than 50 years? The answer, at least in 2018, was slowly. The European Union Withdrawal Act (EUWA) 2018, adopted pre-Brexit but in anticipation of a hard Brexit, effectively took a screenshot of all of EU law, EU case law and general principles of EU law on Brexit day (properly known as Implementation Period Completion Day (IPCD)), and ensured they applied in the United Kingdom just as before Brexit, thus ensuring continuity and a properly functioning statute book. The principle of supremacy was also carried over in respect of pre-Brexit EU Treaty provisions and EU legislation. It went by the (unattractive) name of Retained EU Law (REUL). The only exception to the continuity principle was the Charter of Fundamental Rights which was not carried over and so did not become REUL. The idea was that the pre-Brexit law would continue to apply seamlessly post Brexit; as time went by the law would be changed as government worked out new policies it wished to apply.
      The problem has been, at least for ardent Brexiteers, that this process has been too slow. They argued that the benefits of Brexit would not be felt so long as we were shackled to retained EU law. So, under the brief period of Liz Truss’ Prime Ministership in September 2022, a new Bill was put forward. Commonly known as the REUL Bill (pronounced ‘rule’), it was intended to sunset (i.e. repeal) all 5000 or so pieces of retained EU law, albeit with powers to keep some legislation, delay the sunset on other legislation and reform yet other legislation. The Bill also contained provisions to turn off the principle of supremacy of EU law and general principles of EU law, as well as to encourage the courts to depart more readily from pre-Brexit case law. This was to be counterbalanced by the significant powers given to government to restate, reproduce and revoke or replace REUL.
      Much of the preparatory work had been done on the Bill by Jacob Rees-Mogg MP following the approach advocated by Lord Frost. Jacob Rees-Mogg, then Secretary of State, argued strongly in favour of a bonfire of EU rules.1xA bonfire of EU laws is easily achieved (telegraph.co.uk). However, an extraordinarily wide coalition of interest groups, ranging from the Royal Society for the Protection of Birds (RSPB) to the Employment Lawyers Association, made a strong case that turning off all EU rules would be very dangerous, not least because there were no policies in place to replace them.2xUK pulls back on plan to revoke all EU regulations (ft.com). In May 2023, the new Secretary of State, Kemi Badenoch, announced a reversal of the policy underpinning the Bill. Her approach was that the old REUL would stay except the 600 or so pieces listed in the Schedule, much of which was redundant anyway. However apart from this significant change, the Bill, now Act, kept much of the original content of the Rees-Mogg version of the Bill. These may well lead to significant changes to UK law but their effects will not be felt immediately.
      This article will provide an overview of the Retained EU Law (Revocation and Reform) Act (REULA) 2023 as well as an initial assessment of the effect of the legislation.

    • 2. Sunsets of REUL

      As the introduction showed, the question of the sunset was the most controversial aspect of the legislation. The 2023 Act contains two sunsets: (1) Sunset of EU-derived subordinate legislation and retained direct EU legislation;3xSection 1. and (2) Sunset of retained EU rights, powers and liabilities under Section 4 EUWA.4xSection 2. These provisions came into force on Royal Assent (29 June 2023) but do not come into effect until the end of 2023.
      The first sunset in Section 1 concerns, not the entire corpus of REUL as originally proposed, but the 600 or so measures listed in Schedule 1. The effect of Section 1 is therefore to confirm the position under the 2018 Act: the default is that everything will stay except the provisions now comprehensively listed in the Schedule. Labour law does not feature prominently in the Schedule apart from the ‘Community Drivers’ Hours (Foot-and-Mouth Disease) (Temporary Exception) (No. 2) Regulations 2001 (S.I. 2001/1293) and the amendment Regulations (S.I. 2001/1822). These are of historic interest only. The Posted Workers (Enforcement of Employment Rights) Regulations 2016 (S.I. 2016/539) and the Posted Workers (Agency Workers) Regulations 2020 (S.I. 2020/384) have also been turned off. This is consistent with the fact that free movement of services under Article 56 TFEU has also ended.
      The true sunset can be found in Section 2 which turns off Section 4 EUWA, the ‘sweeper’ provision. Section 4 ensured that all ‘rights, powers, liabilities etc under section 2(1) of the European Communities Act 1972’ (i.e. the direct effect of any remaining Treaty provisions such as Article 157 TFEU on equal pay for men and women as well as some directly effective provisions of Directives) continued to apply in UK law. Section 4 will go at the end of 2023; there are no exceptions to this provision. However, Section 11 REULA enables these legal effects to be reproduced by Regulations adopted before the end of the year (concerning REUL); Section 12 enables these legal effects to be reproduced by Regulations until 23 June 2026 (concerning assimilated law).5xSee also Section 1 of the Draft Finance Bill Measures which has kept Section 4 EUWA despite the provisions of Section 2 REULA. A story in the Financial Times considered below suggests this may well happen.

    • 3. Abolition of supremacy

      Section 3 abolishes the principle of supremacy of EU law, as is by implication, the Marleasing principle. Section 5(A2) goes further and introduces a ‘reverse Marleasing’ principle whereby any Retained Directive EU Legislation (RDEUL), such as the Air Passengers Rights Regulation (EC) No. 261/2004, whether pre or post the domestic enactment, will have to be read in such a way as is compatible with domestic law. Section 3 applies in all cases except to UK GDPR and to any legislation adopted under Section 7 REULA which allows selective reinstatement of supremacy. This provision did not come into force on Royal Assent of the Bill, now Act, and so needs the government to bring it into force by secondary legislation. Further, the principle of supremacy can be restated using the powers in Sections 11 and 12 REULA noted above.

    • 4. Abolition of general principles

      The general principles of law are also abolished by Section 4 REULA. Given the amount of REUL which will remain on the UK statute book from 1 January 2024, the absence of general principles as a guide to interpretation will be significant. The common law principles do overlap in part but, as I shall explain below, some argue that the combined effect of turning off both supremacy and general principles will make a significant difference to the courts’ interpretation of REUL. This provision did not come into force on Royal Assent of the Bill, now Act, and so needs the government to bring it into force by secondary legislation.
      The general principles can be restated using the powers in Sections 11 and 12 REULA noted above. In fact, there is some evidence that the government is doing this already. The Draft Finance Bill Measures has kept the general principles of EU law as they apply to interpreting VAT and excise law.

    • 5. Assimilated law

      From the end of 2023, REUL will be called ‘assimilated law’ (AL), according to Section 5 REULA. A table lists the full changes. So, for example, retained case law becomes ‘assimilated case law’ and retained direct EU legislation becomes ‘assimilated direct legislation’. The name change does not have legal consequences; it is symbolic. These provisions came into force on Royal Assent (29 June 2023) but do not come into effect until the end of 2023.

    • 6. The powers in the Act

      One of the striking – and controversial – features of the Act is the breadth of the secondary powers conferred on the executive to change REUL/AL. All the powers came into force on Royal Assent (29 June 2023). The powers fall into three groups:

      The powers to restate REUL (Sections 11 and 13).
      The powers to restate AL (Sections 12 and 13).
      The powers to revoke or replace REUL (Section 14).

      A running list of legislation being proposed under these powers can be found on the government website.6xREUL (Revocation and Reform) Act 2023 statutory instruments – GOV.UK (www.gov.uk).

      6.1 Restate

      The Act contains broad powers to restate REUL (before the end of 2023) or assimilated law (after December 2023 but before 23 June 2026).7xSee e.g. draft Aviation (Consumers) (Amendment) Regulations 2023. Section 13(2) says a restatement may use ‘words or concepts that are different from those used in the law being restated’. Section 13(3) explains that: A restatement may make any change which the relevant national authority considers appropriate for one or more of the following purposes — (a) resolving ambiguities; (b) removing doubts or anomalies; (c) facilitating improvement in the clarity or accessibility of the law (including by omitting anything which is legally unnecessary).
      The Explanatory Notes say (para. 175) Section 11 ‘establishes the power to restate provisions of “secondary REUL”, (i.e. including the codification of directly effective rights etc. under section 4 of EUWA, retained case law and general principles)’. Such restatements, however, would not be REUL, and retained general principles, retained case law or the principle of supremacy would not apply for the purposes of interpreting that restatement. The power does, however, enable the effects of those things to be reproduced. This would enable the same policy outcome to be achieved as was produced by the REUL being restated. Thus, for example, the powers could be used to reinstate the principles of direct effect, supremacy and general principles; they would not be called that but the effects would be the same.
      The FT has reported that the government intends to use its powers to restate Article 157 TFEU (and presumably its relevant effects). There was confusion in the original version of the report which was subsequently corrected in the light of a complaint by the Secretary of State, Kemi Badenoch.
      Some have suggested that because of the removal of general principles and supremacy, other legislation will have to be restated, including the Working Time Regulations.

      6.2 Revoke or replace

      The powers considered so far are about preserving secondary REUL and its effects after the sunset. By contrast, the powers in Section 14 concern the total removal of REUL or its replacement. It allows a ‘relevant national authority’ by regulations up until 23 June 2026 to:

      1. Revoke any secondary REUL without replacing it.

      2. Revoke any secondary retained EU law and replace it with such provision as the relevant national authority considers to be appropriate and to achieve the same or similar objectives.

      3. Revoke any secondary retained EU law and make such alternative provision as the relevant national authority considers appropriate.

      In respect of the revoke power in Section 14(1), this is extremely broad and could be used in theory to remove the remaining 5000 pieces of legislation not already removed by the Schedule. Section 14(1) has already been used as the basis for the Retained EU Law (Revocation and Reform) Act 2023 (Revocation and Sunset Disapplication) Regulations 2023)8xThe Retained EU Law (Revocation and Reform) Act 2023 (Revocation and Sunset Disapplication) Regulations 2023 – GOV.UK (www.gov.uk). which turns off yet more secondary legislation including, in the labour law field, the Sex Discrimination Act 1975 (Application to Armed Forces etc) Regulations 1994 (S.I. 1994/3276). The government says it is a tidying up exercise: ‘This piece of legislation no longer has any legal effect as the Sex Discrimination Act 1975 was repealed by the Equality Act 2010. As a result the Sex Discrimination Act 1975 (Application to Armed Forces etc) Regulations 1994 are obsolete.’9xRetained EU Law Revocation Explainer (publishing.service.gov.uk.
      In respect of the second power to revoke and replace in Section 14(2), the replacement provision must achieve the same or similar objectives as the original. In respect of the third power, the power to revoke and replace in Section 14(3), the national authority can make such alternative provision as it considers appropriate. This is the widest and most controversial of the three powers.
      There are certain things that cannot be done under Section 14 such as impose taxation or establish a public authority (Section 14(4)(f)). Further, Section 14(5) says ‘No provision may be made by a relevant national authority under this section in relation to a particular subject area unless the relevant national authority considers that the overall effect of the changes made by it under this section (including changes made previously) in relation to that subject area does not increase the regulatory burden.’ Section 14(10) explains:

      “burden” includes (among other things) — (a) a financial cost; (b) an administrative inconvenience; (c) an obstacle to trade or innovation; (d) an obstacle to efficiency, productivity or profitability; (e) a sanction (criminal or otherwise) which affects the carrying on of any lawful activity; …

      There is no discussion as to how this power would be used. There is also no provision for consultation on the use of this power. Generally, regulations can be made either by draft affirmative procedure or the negative resolution procedure but if the latter the sifting arrangements in Schedule 5 apply.
      The House of Lords Delegated Powers Regulatory Reform Committee was highly critical of the very broad powers given to ministers in this ‘hyper-skeletal’ Bill. Under the heading ‘All powers, no policy’, it said:10xHouse of Lords – Twenty Seventh Report – Delegated Powers and Regulatory Reform Committee (parliament.uk).

      8. REUL—a very large body of law—will be placed in the hands of Ministers. What becomes of it will depend on how Ministers choose to exercise the regulation-making powers in the Bill.
      9. The Bill is sufficiently lacking in substance not even to be described as “skeletal”. It is a mechanism that gives Ministers the power to decide what becomes of whole swathes of UK law deriving from our membership of the EU. Ministers, not Parliament, will be responsible for determining what stays, what goes and what, if anything, is to replace what goes.

      In respect of labour law it looks like the government will use these powers to make some changes to labour law specifically on reforms to the Working Time Regulations, and the Transfer of Undertakings (Protection of Employment) Regulations (TUPE). It has consulted on the changes.11xRetained EU employment law reforms – GOV.UK (www.gov.uk). The government said: ‘We want to use this consultation as part of our ongoing dialogue with businesses and workers to set out an employment rights framework that will retain our global position as a dynamic, vibrant, and flexible economy.’12xLink to the consultation: https://www.gov.uk/government/consultations/retained-eu-employment-law-reforms.

      6.3 Other powers

      There are two other powers which are less relevant to the labour law field but are mentioned here for completeness. Section 15 is the power to update, allowing the relevant national authority to make modifications of secondary retained law or its successors to take account of changes in technology or developments in scientific understanding. Section 16 is the power to remove or reduce burdens using a special type of delegated legislation known as a Legislative Reform Order.

    • 7. Role of the courts

      In respect of post-Brexit case law, there is no obligation on UK courts to follow it; they can have regard to it if relevant to matters in the case. In respect of pre-Brexit case law, both of the Court of Justice and of the domestic courts, the courts and tribunals are obliged to follow the decisions, although the Court of Appeal and the Supreme Court can depart from them where it is ‘right to do so’.13xThe 1966 Practice Direction. In fact, little use has been made of this power14xSee e.g. TuneIn Inc – v – Warner Music UK Ltd & Anor [2021] EWCA Civ 441. and so the government in REULA 2023 wanted to encourage the UK courts to depart more willingly from the case law. In summary, the REULA does three things:

      1. It makes it easier to depart from ECJ and domestic retained EU case law by introducing a new test (Sections 6(2)–(7)).

      2. It allows lower courts to make a reference to a higher level court on whether to depart (Section 6(8), introducing Section 6A into EUWA).

      3. It gives the Attorney General and other law officers in the United Kingdom and devolved governments the power to intervene in cases but also they can refer cases to the courts, so that they may be invited to exercise their new discretion to depart from retained EU case law (Section 6(8), introducing Sections 6B and 6C into EUWA).

      7.1 Power to depart

      Section 6(3) establishes a new test to be applied by higher courts (Supreme Court and Court of Appeal and their Scottish and Northern Irish equivalents) when considering whether to depart from retained EU case law. The new test sets out a non-exhaustive list of three factors for the higher court to consider when deciding whether to depart from retained EU case law. It must (among other things) have regard to: (a) the fact that decisions of a foreign court are not usually binding, (b) any changes of circumstances which are relevant to the retained EU case law, and (c) the extent to which the retained EU case law otherwise restricts the proper development of domestic law.
      A similar provision applies in respect of the higher courts departing from retained domestic case law (Section 6(4)). There is considerable lack of clarity as to what these factors mean in practice and how likely the courts are to use them to justify making significant departures from earlier case law. Courts tend to be conservative and reluctant to make radical change, preferring to leave that to the legislature.

      7.2 Reference process

      In order to encourage courts to depart more swiftly from pre-Brexit case law, Section 6(8) REULA has introduced a reference procedure which somewhat mirrors the Article 267 TFEU procedure into Section 6A EUWA. In essence, a court or tribunal which is (a) bound by retained case law and which (b) considers the case raises a point of law of general public importance may make a reference (i) of its own motion or (ii) pursuant to an application made by a party to the proceedings (Section 6A(2)) to the Supreme Court if the reference concerns wholly or in part retained case law of the Supreme Court or, in any other case, to the appropriate court, in most cases the Court of Appeal. The Supreme Court or the Court of Appeal may accept the reference if they consider (a) the single point is (i) relevant to the proceedings and (ii) is of general public importance (Section 6A(4)). The law officers must be notified of the case so they can be joined as a party (Section 6C).

      7.3 Role of the law officers

      The law officers can also refer a case which has been finished to a higher court where no Section 6A reference has been made. The higher court must accept the reference and make a decision. The decision does not affect the outcome of the specific case.

    • 8. Conclusions

      The REUL Bill, had it been enacted as first presented, had the potential to dramatically change the legislative landscape in the United Kingdom. It was subject to a significant amount of attention – and criticism – from across the political spectrum as well as from a wide coalition of interest groups. The fact that the default has been reversed has meant the potential damage to labour law and other areas is less acute.
      However, just because the default in the Bill has been reversed does not mean that labour law is protected. Section 14 can be used to revoke swathes of secondary legislation with very little parliamentary scrutiny, although there is little evidence of government desire to do this at the moment. For example, in a press release issued when the original version of the Bill (when the default was to sunset all REUL) was being considered, the government said:15xThe Retained EU Law (Revocation and Reform) Bill 2022 – GOV.UK (www.gov.uk).

      the Bill would not weaken environmental protections;
      the government would continue to honour its commitment to protecting workers’ rights in matters of health and safety in the workplace;16xBNR_Letter_to_Lord_Hendy_and_Baroness_Finlay_REUL_Report_Stage.pdf (parliament.uk). and
      as a priority, the government would take the necessary action to safeguard the substance of any retained EU law and legal effects required to operate international obligations within domestic law.

      Presumably these commitments to fulfilling its international obligations would also cover the level playing field (LPF) obligations under the Trade and Cooperation Agreement.
      Some of the criticisms levelled at the Bill by various parliamentary committees are, however, still valid, not least about the scope of the powers. As noted above, the Bill was described by the Delegated Powers and Regulatory Reform (DPRR) Committee as ‘hyper-skeletal’.17xDelegated Powers and Regulatory Reform Committee, 25th Report of Session 2022-23, (HL Paper 147), para. 63. The Committee recommended that ‘of the six most important provisions containing delegated powers in this Bill, five should be removed from the Bill altogether. The shortcomings of this hyper-skeletal Bill justify our approach.’18xPara. 63.
      More concerning for labour law is the uncertainty generated by the combined effect of the removal of supremacy, general principles and the strong nudge to the judges to depart more enthusiastically from pre-Brexit case law. As Mohinderpal Sethi KC explains:19xBarrister, Littleton Chambers.

      At some point the [EU] interpretive obligations will need to be replaced by domestic case law. However, there have been plenty of domestic cases where domestic principles of interpretation do not go far enough and the directive is used to understand the meaning of regulations (unlike in the case of domestic law, directives set out the object and purpose in the recitals). If we do not have these principles, it is not clear what they are replaced with.

      So the REULA has the potential to lead to significant change in labour law both direct and indirect. The speed of that change will largely be the result of political decision. In the meantime a lot of secondary law is likely to be forthcoming to try to clarify the potentially confused legal position.

    Noten

    • 1 A bonfire of EU laws is easily achieved (telegraph.co.uk).

    • 2 UK pulls back on plan to revoke all EU regulations (ft.com).

    • 3 Section 1.

    • 4 Section 2.

    • 5 See also Section 1 of the Draft Finance Bill Measures which has kept Section 4 EUWA despite the provisions of Section 2 REULA.

    • 6 REUL (Revocation and Reform) Act 2023 statutory instruments – GOV.UK (www.gov.uk).

    • 7 See e.g. draft Aviation (Consumers) (Amendment) Regulations 2023.

    • 8 The Retained EU Law (Revocation and Reform) Act 2023 (Revocation and Sunset Disapplication) Regulations 2023 – GOV.UK (www.gov.uk).

    • 9 Retained EU Law Revocation Explainer (publishing.service.gov.uk.

    • 10 House of Lords – Twenty Seventh Report – Delegated Powers and Regulatory Reform Committee (parliament.uk).

    • 11 Retained EU employment law reforms – GOV.UK (www.gov.uk).

    • 12 Link to the consultation: https://www.gov.uk/government/consultations/retained-eu-employment-law-reforms.

    • 13 The 1966 Practice Direction.

    • 14 See e.g. TuneIn Inc – v – Warner Music UK Ltd & Anor [2021] EWCA Civ 441.

    • 15 The Retained EU Law (Revocation and Reform) Bill 2022 – GOV.UK (www.gov.uk).

    • 16 BNR_Letter_to_Lord_Hendy_and_Baroness_Finlay_REUL_Report_Stage.pdf (parliament.uk).

    • 17 Delegated Powers and Regulatory Reform Committee, 25th Report of Session 2022-23, (HL Paper 147), para. 63.

    • 18 Para. 63.

    • 19 Barrister, Littleton Chambers.


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