What might the Brexit Freedoms Bill mean for employment law in Northern Ireland?

A major shake-up of Northern Irish employment legislation is on the cards, complicated by there being no functioning Northern Ireland Executive, or Assembly in Northern Ireland.

The Retained EU Law (Revocation and Reform) Bill (Brexit Freedoms Bill) was introduced in the House of Commons on 22 September 2022. The Brexit Freedoms Bill aims to dramatically increase the pace of repealing, restating or replacing EU laws which were retained by the UK when it exited the EU on 31 December 2020.

The UK is already free to remove retained EU law through the normal parliamentary process, but this can be quite slow. The Brexit Freedoms Bill confers extensive powers on the government to remove or replace EU law by means of regulations. This is a much faster process as it significantly curtails Parliament’s ability to scrutinise any proposals. This has been criticised as being “undemocratic.”

We commented in this article about the Brexit Freedoms Bill’s potential implications for employment law in Great Britain. In this article we consider the potential implications of the Brexit Freedoms Bill for employment laws in Northern Ireland, especially in light of the commitments given to protect Good Friday Agreement rights and the EU Directives that underpin those rights.

What does the Brexit Freedoms Bill do?

The Brexit Freedoms Bill:

“sunsets” EU laws that are currently retained in employment law, which means these laws are revoked, unless they are restated as, or replaced by, UK domestic legislation by the end of 2023;

removes directly effective rights and obligations under EU treaties and directives;

abolishes the principal of supremacy of EU law (the concept which forces all other UK legislation to be interpreted so as to give way to EU law where there is a conflict) by the end of 2023;

removes from UK law the effects of general principles of EU law from the end of 2023;

renames retained EU law “assimilated law” after the end of 2023;

provides national authorities with the power to restate any retained EU law (and clarify, consolidate or restate retained EU law);

gives national authorities powers to revoke or replace any retained EU law or assimilated law, provided this does not increase the regulatory burden;

replaces the test for departure from retained EU case law (“when it appears right to do so”) with a new test (extent to which retained EU case law restricts proper development of domestic law);

establishes a new reference procedure, which enables lower courts or tribunals, to refer points of law on retained case law to a relevant higher court if they are of general public importance; and

gives domestic law priority over retained EU legislation where a domestic enactment cannot be interpreted compatibly with a provision of retained direct EU legislation.

The “sunset” provision effectively means that, unless positive action is taken in the form of amending or restating the retained EU law that is in scope, it will automatically expire at the end of 2023. This deadline can be extended until June 2026 (10 years after the Brexit referendum) for specific laws or categories of laws. However, the government’s Memorandum to the Delegated Powers and Regulatory Reform Committee observes that the power to extend the deadline for the sunset provisions is not intended for wide use, and ministers do not intend to allow use of this power without collective agreement.

Extent of legal change

The “sunset” provisions in the Brexit Freedoms Bill applies to secondary legislation (e.g., regulations) made under:

EU law; and

primary legislation, e.g., an Act.

The Brexit Freedoms Bill excludes “an instrument that is Northern Ireland legislation” from the definition of secondary legislation.

Northern Ireland legislation is defined in section 24(5) of the Interpretation Act 1978 and includes some secondary legislation which, although made under primary legislation, is used as primary legislation because of the history of direct rule (these secondary pieces of legislation were enacted by the UK government during various stages when the Stormont institutions were not operating).

This quite poorly drafted carve out appears to exclude legislation such as Orders in Council (e.g., the Sex Discrimination (Northern Ireland) Order 1976) from the sunset clause. For all intents and purposes, these statutes are considered primary legislation, conferring powers on relevant Departments to enact secondary legislation, in the form of regulations. Therefore, while the Orders themselves would be out of the scope of the sunset provision, it appears that the subsequent regulations enacted under them, insofar as they implement EU legislation, would be included.

What’s in scope?

A large amount of employment law is therefore within the scope of the Brexit Freedoms Bill’s provisions. This could impact a vast range of employment-related regulation in Northern Ireland including:

the Working Time Regulations (Northern Ireland) 2016;

the Agency Workers Regulations (Northern Ireland) 2011;

the Part-time Workers (Prevention of Less Favourable Treatment) Regulations (Northern Ireland) 2000;

the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations (Northern Ireland) 2002;

the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”) (only insofar as it implements EU law) and the Service Provision Change (Protection of Employment) Regulations (Northern Ireland) 2006 (which go further than EU law);

the Information & Consultation of Employees Regulations (Northern Ireland) 2005; and

certain health & safety regulations.

In addition to these regulations, because most of Northern Ireland’s equality legislation has been made by statutory instrument, these will be in scope. Therefore, regulations such as the Employment Equality (Age) Regulations and the Employment Equality (Sexual Orientation) Regulations will be in scope. However, some pieces of legislation, such as the Disability Discrimination Act 1995, will not be in scope due to it being a piece of primary legislation.

Northern Ireland - devolved Issues

Employment law is devolved to the Northern Ireland Executive. However, the Brexit Freedoms Bill specifically states that it applies to Northern Ireland, Wales and Scotland. Therefore, as noted above, our employment laws are in scope in the same way as those in the rest of the UK.

Currently, there is no functioning Northern Ireland Executive, or Assembly. This means it will not be possible to prepare the Executive’s legislative consent memoranda or debate the necessary legislative consent motions. Furthermore, it would appear optimistic to consider that there will be enough time to review employment legislation and make decisions as to whether to restate, replace or revoke the relevant laws in this jurisdiction before the end of 2023. Accordingly, it is not clear whether these provisions will just lapse under the sunset provisions or whether Northern Ireland will be given additional time, if needed.

The UK Government has, in the past, proceeded to legislate without devolved consent in Northern Ireland in circumstances such as these, for example in respect of the European Union (Withdrawal) Act 2018. It also legislated against the wishes of the Northern Ireland Assembly in relation to the EU (Withdrawal Agreement) Bill and the EU (Future Relationship) Bill in 2020.

It is noteworthy that the power in the Brexit Freedoms Bill to extend the deadline for the sunsetting provisions is given to UK Ministers alone, leaving the devolved administrations, including Northern Ireland, with no powers to extend the deadline in relation to specific laws or categories of laws.

Incompatibility with the Northern Ireland Protocol?

It is difficult to reconcile the Brexit Freedoms Bill with the provisions of the Northern Ireland Protocol.

As we have reported, the Protocol plays an important role in securing the employment and equality protections central to the Good Friday Agreement. Article 2 of the Protocol provides that there should be no diminution of the rights, safeguards and equality of opportunity provisions set out in the Good Friday Agreement, which are underpinned by certain EU Directives dealing with discrimination on the grounds of protected characteristics (gender, racial or ethnic origin, religion or belief, disability, age or sexual orientation). The fact that the Brexit Freedoms Bill would sunset or possibly revoke certain secondary equality regulations such as the Employment Equality (Age) Regulations and the Employment Equality (Sexual Orientation) Regulations means that the UK could be in breach of its obligations under the EU Withdrawal Agreement. Similarly, it is difficult to reconcile the non-diminution principle contained in the Protocol with the ending of supremacy of EU law and removal of principles of EU law.

The UK government has accepted that some retained EU law within the scope of the Brexit Freedoms Bill’s sunset provisions is required to continue to operate the UK’s international obligations, including those under the UK-EU trade and co-operation agreement and the UK-EU withdrawal agreement (including the Protocol). The House of Commons Briefing Paper on the Brexit Freedoms Bill says that as with other directly effective parts of the Withdrawal Agreement, the Protocol displaces REUL (the Brexit Freedoms Bill) to the extent that the two are inconsistent.

However, the Northern Ireland Protocol Bill (currently being considered by Parliament) could disapply key provisions of the Protocol, and expressly authorises UK ministers to make contradictory provision, which may mean that the Protocol becomes more susceptible to challenge and erosion.

However, in those circumstances the EU would retain the right to consider imposing penalties or trade sanctions on the UK if this resulted in a competitive advantage to the UK and faces the prospect of tariffs if it reduces employment rights.

Potential for divergence

The Brexit Freedoms Bill will sunset key pieces of employment legislation throughout the UK, with the powers to decide what to do next granted to the relevant UK Minister and devolved administrations. While the revoking of such legislation is the default position of the Brexit Freedom Bill’s sunset provision, it would be hard to imagine the entirety of the Working Time Regulations, for example, disappearing from the statute books without something to replace it. Indeed, it would be wise to assume that most of these regulations will, in some form or another, be restated or replaced in domestic legislation.

However, it is possible to foresee a situation where, for example, the GB government replaces a particular law (e.g., the Working Time Regulations) with a new domestic version; and the Northern Ireland Executive either revokes or restates the regulations. This would undoubtedly lead to significant divergence between the jurisdictions. This is just one of many potential implications arising in connection with the Brexit Freedoms Bill.

The potential for such divergence increases when the collapsed institutions and political instability in Northern Ireland are taken into account, which may leave it impossible to ensure that the review and necessary decisions are taken within the relevant time period.

What next?

We can expect debate and many proposed amendments before the Brexit Freedoms Bill is eventually passed into law. But the end of 2023 is not very far away, and presumably government departments will be under pressure to start reviewing any retained EU laws that fall within their remit to avoid inadvertent exposure to the sunset provision.

Given the complexity of employment law, it seems reasonably likely that the extension power may be needed to keep certain regulations in place while we debate an appropriate replacement. On the other hand, there is a general election coming in 2024, and a new government might have different ideas for reform, while the current government may be keen to push many reforms through before the election.

It appears that we are potentially facing a very significant shake-up of employment rights. When it came to implementing EU directives, employers would generally have at least two years to get ready. At present, it appears that we may not have the same amount of time to prepare and no clarity as to what we are preparing for. With no functioning Executive, or Assembly, in Northern Ireland to consider what the Brexit Freedoms Bill means for Northern Ireland, employers in this jurisdiction face great uncertainty as to what this legislation means for them.