Employment law reforms announced as government retreats on Brexit-induced ‘sunset clauses’

May 11, 2023

Just yesterday, the government submitted  a written statement to parliament to announce revocation of the proposed “sunset clause” contained in the Retained EU Law (Revocation and Reform) Bill.

Introduced to Parliament in September last year, the function of this clause was to ensure that any retained EU law that had not otherwise been expressly preserved or replaced by other UK law before the end of 2023 would be automatically repealed at the end of the year. A slow and automatic descent beneath the visible horizon, if you will.

In a surprising (or perhaps not so) twist of events, that position is now being completely reversed –EU law will instead remain binding in the UK unless it is expressly repealed. The Bill will contain a list of the EU laws that the government intends to revoke on 31 December 2023. Anything not on that list will remain valid moving forward.

What has the government said?

The government’s Secretary of State for the Department of Business and Trade (DB&T), Kemi Badenoch, made the following comment:

The ability for an independent UK to forge its own place in the world is one of the main reasons the country voted to leave the European Union. This government is committed to seizing the opportunities following our exit, which is why we are now removingEU laws from the UK statute book.

Over the past year Whitehall departments have been working hard to identify retained EU law to preserve, reform or revoke. However, with the growing volume of REUL being identified, and the risks of legal uncertainty posed by sunsetting instruments made underEU law, it has become clear that the programme was becoming more about reducing legal risk by preserving EU laws than prioritising meaningful reform. That is why today I am proposing a new approach: one that will ensure ministers and officials can focus more on reforming REUL, and doing that faster.”

Nevertheless, contrary to the tone of this statement, the revocation of sunset clauses will almost certainly result in the retention of more EU legislation, not less. From an employment law perspective, this comes as no great shock.

What does this mean for employment law?

Only this morning, the government has published the list of EU based statutory instruments that it intends to repeal on 31 December 2023, and it’s unsurprising that we do not find a swathe of employment related legislation on that list. In fact, the only pieces of legislation relevant to employment law which are being repealed are the following relatively obscure regulations. (Personally,I have never referred to them in over 16 years as an employment lawyer and please don’t test me on their contents!!!)

·       The Community Drivers’ Hours and Working Time (Road Tankers) (Temporary Exception) (Amendment) Regulations2006

·       The Posted Workers(Enforcement of Employment Rights) Regulations 2016

·       The Posted Workers (AgencyWorkers) Regulations 2020

Despite only repealing the above regulations, the government has announced plans to reform existing legislation. The DB&T now intends to make the following changes:

Working hours

·      remove retainedEU case law that imposes what the government refers to as “time-consuming and disproportionate requirements on business for working hour records to be kept for almost all members of the workforce”. However, given that most employers never did this in the first place, and most likely weren’t aware of this requirement, it’s unlikely that this will have much of an impact on most businesses.


·       merge ‘normal’ holiday leave with ‘additional’ holiday leave, to create one entitlement.  Although the government does not specifically say this, it could well result in the calculation of holiday pay reverting to the old method (i.e. excluding commission, overtime etc.).

·       allow ‘rolled-up’ holiday pay. This has been technically unlawful under EU law for some years, although, again, many businesses that engaged casual workers did this anyway with little risk as the remedy for breach is limited if the rolled-up element is shown clearly on payslips.


·      remove the requirement to consult with appointed representatives when there are fewer than 50 employees in the business and fewer than 10 transferees. Practically, this will have little impact, due to the existing exemption where consultation wasn’t required for businesses with fewer than 10 employees. As a result, the change means that where a business has between 10and 49 employees, of whom 9 or fewer are transferring, they will also be exempted from the collective consultation rules.

Side note: what’s TUPE?

‘TUPE’ stands for ‘transfer of undertakings (protection of employment)’ and is a set of regulations introduced in 2006 the aim of which is to protect the position of employees (like it says on the tin) when part of a business ora service provided to a business is transferred from one organisation to another.  It can be pretty complex and comes with risks so if you need more information or guidance, please do contact us.

What does the changes mean for Employers?

From a day-to-day perspective, very little. However, the changes to holiday are likely to be welcomed by many employers, particularly if we do see a reversion to how holiday pay is calculated. The inclusion of bonuses, commissions etc. can be costly and time-consuming to calculate, so a reversion to basic pay only would be welcomed by many businesses.

Next steps?

Although no specific timetable has been produced, it is anticipated that these changes will come into effect fairly soon and quickly, as there is no requirement to amend primary legislation.

The Bill itself is currently before the House of Lords for scrutiny,  and will be followed by the report stage on 15 May. Changes to the sunset clause have been requested by opponents of the Bill, so we can expect to welcome further amendments soon.

If you need support with employment matters, contact us now for a free, no-obligation discovery call.

Receive our insights directly to your inbox by signing up to our newsletter

Recommended content