Implications Brexit employment law perspective

Brexit legal institutional framework

Brexit legal institutional framework

What will be the legal route to achieving a Brexit?

Following the vote to leave the EU, in order to start a formal legal process the UK will need to notify the European Council of the UK’s intention to withdraw from the EU. The service of formal notice will trigger Article 50 of the Treaty on European Union (the  TEU), the mechanism by which an EU member state is able to legally withdraw from the EU and under EU and international treaty law. Announcing his intention to step down as Prime Minister, David Cameron stated that Article 50 notification will take place after a new leader is in place, likely to be by October. Following the service of notice on the European Council, Article 50 provides for a two year period for the withdrawal to take effect. There are likely to be negotiations between the UK and the European Commission1, as EU negotiator, based on guidelines issued by the European Council and in accordance with article 218(3) of the Treaty on the Functioning of the European Union (TFEU). The negotiating period can be extended by agreement of all EU member states. If no extension is agreed, the UK would automatically cease to be a member of the EU at the end of two years. A link to our Brexit timeline tracker can be found here. It is anticipated that even if there is a formal exit after 2 years, much of the detail of the negotiation will need to be dealt with over a longer period. Article 50 has never been used before so the UK would be setting a new precedent and this is likely to bring its own challenges for all parties involved in so far as there is “no clear legal framework for how it would work”2.

What UK legislation will need to be repealed or amended in order for a Brexit to take effect?

The most important piece of UK legislation that would need to be repealed is the European Communities Act 1972 (ECA), which provides for the supremacy of EU law. Repealing the ECA would bring an end to the constitutional relationship that exists between EU and UK law. Moreover, the vast amounts of secondary legislation that have been passed with the objective and justification of implementing EU law would have to be considered by the government.

Commercially however, even if the UK decided not to replicate any EU law, companies looking to trade in the EU would nevertheless still be required to comply with EU laws such as EU competition rules, regulations and standards.

What will be the impact on existing European Union Directives?

EU Directives require implementation into UK law in order to have effect. This creates the task for any UK government overseeing Brexit of deciding whether to embark on a process of reviewing Acts of Parliament and statutory instruments with a view to ascertaining whether or not to maintain, replace or repeal each piece of legislation. As with EU Regulations (see below), Parliament might choose to pass laws affirming the status of UK legislation passed pursuant to EU Directives, but much legislation would need to be amended to take into account the new relationship with the EU, such as the appointment and oversight of new UK regulators in place of the EU institutions.

What will be the impact on existing European Union Regulations?

EU Regulations rely on the principle of direct applicability, which means that unlike EU Directives, they are directly implemented into UK law without the need for legislation from the UK Parliament. In this light, Regulations are more powerful legislative tools for the EU because of their immediate applicability. However, this strength could lead to a quicker erosion of their effect following Brexit compared to Directives, as there would be no implementing national legislation to rely on during any period of transition. Parliament would need to consider the implementation of new legislation to fill these gaps well in advance of an actual Brexit. Depending on the form of Brexit, Parliament may decide that the wholesale replacement of existing EU Regulations in some areas may not be practical and may instead elect effectively to implement Regulations by way of statutory instrument, possibly under the authority of some form of transitional Brexit Act.

Will UK courts still be bound by decisions of the CJEU?

The Court of Justice of the European Union (CJEU) situated in Luxembourg is the final arbiter on questions of the interpretation of EU law. Insofar as the aim of Brexit is to achieve political independence from the influence of EU institutions, it is difficult to envisage the CJEU continuing to have a long term role of direct influence on UK jurisprudence and Brexit could mean that CJEU decisions would cease to be binding on the English courts.

However, in practice, given the extent of the task of unpicking existing EU-influenced law, the UK courts are likely to continue to have regard to the rulings of the CJEU, at least until a fuller transition has taken place. In addition, previous CJEU decisions have influenced many areas of English case law and similarly, the English courts have looked at the wording of EU Directives for the purposes of construing UK legislation which was passed to give them effect. It is possible that the UK courts may start to move away from such decisions once the UK is no longer bound by EU law and/or such decisions may be superseded by post-Brexit legislation, but in the interim we envisage that the interpretation of EU law will likely continue to play some role in English jurisprudence.

Footnotes

  1. EU Referendum, the process of leaving the EU, House of Commons briefing paper, April 2016.
  2. EU referendum: the process of leaving the EU, House of Commons briefing paper April 2016.

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