A tale of three Acts
The UK’s first attempt to create a post Brexit legal settlement is set out in the European Union (Withdrawal) Act 2018. The 2018 Act started life as part of the UK’s preparation for a no-deal Brexit. The rough and ready approach it took to EU law was in effect a giant cut and paste job, which would have taken applicable EU legislation and case law as it stood at the point of Brexit and incorporated it into domestic law as “retained” EU law.
Reaching an exit deal with the EU opened the way for a more complex articulation of the UK’s legal transition to its new future outside the EU. The European Union (Withdrawal Agreement) Act 2020 provided the necessary framework. That Act legislated for a transitional period during which the UK would remain in the EU single market and directly subject to EU law, postponing the cut and paste of EU law until 31 December 2020, when that period ended. It also incorporated some of the provisions of the Withdrawal Agreeent into domestic law – notably the EU settlement scheme, which was devised to protect the rights of EU nationals living in the UK at the end of the transitional period.
Under increasing pressure to demonstrate a “Brexit dividend”, the Government has now passed a third key Brexit Act – the Retained EU Law (Revocation and Reform) Act 2023, which comes into force at the end of 2023. Originally conceived as a “bonfire” of EU-derived law, its most radical provisions were removed following government defeats in the House of Lords. However, the changes the Act has made to the original Brexit legal settlement are still significant.
Sunsetting EU-derived law
The 2023 Act starts by repealing nearly 600 individual pieces of legislation, which currently form part of retained EU law, that the Government has decided are inoperable or no longer required. These repeals will take effect at the end of 2023. This exercise had always been envisaged and would have been possible using powers the Government already had. However, the Act has provided added impetus to identify and remove as much obsolete legislation as possible, as well as a framework for demonstrating what has been achieved.
Most of the repealed provisions are relatively obscure, but they do reflect a significant tidying up operation. The original plan had been to repeal all provisions of EU retained law that ministers had not made a positive decision to keep. In the end, the Government accepted that this was too radical – and risky – an approach.
Repealing general principles of EU law
The general principles of EU law could be regarded as the thread that weaves the disparate threads of EU legislation and the case law into a stable fabric. The Act doesn’t offer a definition of what they are, but they include well-known principles like non-discrimination and equivalence. The latter principle requires that remedies member states provide for breaches of EU law must be at least as generous as those reserved for comparable breaches of domestic law.
These general principles, which were expressly preserved in the EU Withdrawal Act, will now be repealed with effect from the end of 2023. However, they will be still recognised in litigation involving EU retained law from 1 January 2024 onwards if the facts giving rise to the dispute arose before that date.
There is a considerable overlap between the general principles of EU law and the principles of statutory interpretation that have been developed by our domestic courts. Nonetheless, the removal of these general principles will undoubtedly leave some gaps, which could lead to legal uncertainty in the future.
Restating and assimilating EU law
The 2023 Act gives the Government extensive powers to “restate” retained EU law so that it become fully domesticated. That is one way to plug the gap left by removing the general principles of EU law from domestic law. This restated law will become fully assimilated into domestic law, shorn of the special status that EU-derived law had previously retained.
In the employment field, this exercise has already begun. Draft legislation, which will come into effect on 1 January, has restated the Government’s current understanding of the effect of key EU case law in relation to the entitlement to paid holidays, where this goes beyond the express wording of the Working Time Regulations. Amendments have also been made to the Equality Act 2010 to reflect EU case law on a number of topics, including the definition of indirect discrimination and the interpretation of the phrase “ordinary day-to-day activities” (one of the key components of the definition of disability).
It is strange to see the principles that our domestic courts currently derive from historic EU case law transformed in this way. For example, the general principle that holiday pay must include “normal” pay that is “intrinsically linked” to the job, has morphed into a complex three-part definition that forms part of the latest set of amendments to the Working Time Regulations.
Similar exercises are being conducted in other practice areas which have a significant element of EU retained law, for example pensions, environment and data protection. The Government is taking a separate approach to VAT (which also derives from EU law) in a process being led by the Treasury.
The devolved administrations are also involved in a similar process in respect of legislation which applies exclusively to their particular jurisdictions.
Conclusion
Based on the settlement the UK reached with the EU at the end of 2020 in the Trade and Co-operation Agreement, many had assumed that pace at which UK and EU law diverged would be gradual and organic. Instead, the 2023 Act has forced the pace, provoking a relatively sudden adjustment to the status of EU retained law on 1 January 2024.
That said, it will take years to assess how significant the abolition of the general principles of EU law, and the other changes the Act makes, will prove to be in practice. No doubt there will be further repeals and adjustments in the years to come, but it is worth remembering that the Trade and Co-operation Agreement contains some important limitations on the Government’s powers to pursue a radical programme of divergence. Among other things, these include a commitment by the UK not to “weaken or reduce” its “labour and social levels of protection” below the levels in place at the end of the transition period, where this would affect EU/UK trade or investment.
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