Expiration of IR35 and (some) retained EU law | Hogan Lovells

The Upholding EU Law (Revocation and Reform) Bill

Earlier this year, the government signaled its post-Brexit determination to review retained EU legislation. He has just published the Retained European Law (Revocation and Reform) Bill (the Bill), which has potentially significant implications for UK employment law.

The bill will “overrule” most EU laws retained in secondary legislation, such as regulations, which means that unless such law is preserved in some form (see below below), it will expire on 31 December 2023. The principle of directly effective EU rights will end on the same date. In the context of employment, this could include laws such as the TUPE, working time regulations, rules for part-time, fixed-term and agency workers and certain equal pay provisions. However, rights contained in primary legislation, such as the Equality Act, should not be affected.

It does not automatically follow that most EU employment laws will expire. Some retained EU law will be preserved and fully assimilated into national law and ministries will now engage in a process of deciding what to keep and what to let expire. There will be a period of uncertainty until there are further announcements about what will be kept in EU labor law and what will be reformed or dropped.

The government also intends to make it easier for courts to deviate from existing CJEU case law. This will include giving lower courts the power to refer EU case law to higher courts which have the power to deviate from it if points of law are of general public importance. While this may speed up the process of decoupling from historic CJEU case law, the potential benefits could be outweighed by additional legal uncertainty. This uncertainty could be particularly acute in the field of employment, given the influence of the EU on labor rights before Brexit.

The growth project

One aspect of the growth plan announced on September 23 that is of particular interest to employers is the decision to repeal the non-payroll work rules introduced in April 2021 effective April 2023. After that date, end users will no longer have to make determinations of employment status. if they hire someone through a human service company. The responsibility for tax and NICs will rest with the person providing the services, not the end user, as was the case prior to the introduction of the IR35 reforms.

Other changes to industrial relations legislation could also be considered. The growth plan pledges to introduce minimum levels of service on public transport, designed to minimize disruption caused by industrial action. The government also intends to introduce legislation to ensure that meaningful employer wage offers are made available to employees, with the aim of facilitating the settlement of labor disputes.

Next steps

Most employers will say goodbye to the complexities introduced by non-regret work rules. However, the uncertainty created by the bill is less welcomed. It is to be hoped that the government clarifies the EU law which it intends to preserve without undue delay, to enable businesses to plan accordingly. The fate of TUPE will be particularly important in this regard.

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