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Brexit and Equality Act 2010 - the Great Repeal Bill

What are the consequences of Brexit for disability discrimination under the Equality Act? Essentially the Equality Act is likely to continue after Brexit and be interpreted in according with pre-Brexit decisions of the EU Court of Justice. However, subject to the outcome of negotiations with the EU, after Brexit the UK will be entitled to amend the Equality Act without regard to EU law. This is the position under the proposed EU (Withdrawal) Bill, sometimes known as the 'Great Repeal Bill'.

Summary

Equality Act continues even after Brexit

Past EU case law remains important after Brexit, unless UK amends the legislation

Possible amendment of Equality Act after Brexit

UK disability discrimination law originated in Britain rather than the EU

The UK currently remains part of the EU

BrexitThe UK currently remains a member of the European Union. Notification under Article 50 of the TEU was given on 29th March 2017. Article 50 provides that unless otherwise agreed, the member state leaves the EU two years after the notification is given. Accordingly the UK will remain a member of the EU until March 2019 at which point it leaves, unless there is agreement to the contrary. (This assumes the UK does not seek to revoke the notification, which seems unlikely.)

The reason why EU law has effect in the UK is because the British Parliament has passed an Act of Parliament saying so, namely the European Communities Act 1972. The Westminster Parliament remains sovereign and can amend or repeal this Act whenever it wants. However to repeal the 1972 Act before the UK ceases to be an EU member would presumably be a breach of both EU law and international law. The European Union (Withdrawal) Bill (link to parliament.uk) would therefore repeal the European Communities Act 1972 on 'exit day', which would be 'the day we leave the EU' according to The Great Repeal Bill: White Paper (link to gov.uk) (in the Foreword by David Davis) - though see below 'Exit day'.

Accordingly at present the UK must still comply with EU discrimination law

Under the European Communities Act 1972, British courts and other bodies currently remain bound by EU legislation, including the Framework Employment Directive on discrimination, and by decisions of the EU Court of Justice. Accordingly, for the time being -

Equality Act continues even after Brexit

The UK currently remains a member of the European Union (see above).

However the Equality Act 2010 will continue as it is even after the UK ceases to be an EU member, unless and until Britain amends it. This is because the Equality Act is a British statute, passed by the Westminster Parliament.

That is also consistent with the government's approach to Brexit generally, namely that existing laws whether EU laws or not should continue after Brexit, but can then be amended by Parliament (or by the government in some cases) without being constrained by EU requirements. To implement this, and also to take the UK out of the European Union, the government has introduced into Parliament the European Union (Withdrawal) Bill (link to parliament.uk), sometimes called the 'Great Repeal Bill'. This Bill follows on from the government's proposals in the The Great Repeal Bill: White Paper (link to gov.uk) of March 2017. The Bill would repeal the European Communities Act 1972 with effect from the 'exit day', but simultaneously make EU law into British law. This law could however then be amended by the British Parliament or government because the supremacy of EU law will have ended. See below as to 'exit day'. Of course the Bill has not yet been passed by Parliament, so the current version may well be amended. This page is based on the original 13th July version of the Bill.

What does the Bill say about the Equality Act? Most important is what clause 6 of the Bill says about the ongoing effect of EU law on interpreting legislation post-Brexit: see below After Brexit: Effect of EU law when interpreting Equality Act. Also however, the Equality Act 2010 so far as it relates to employment seems to be (at least mostly) 'EU-derived domestic legislation' within clause 2(2)(b)(c) of the Bill, because the Act implements EU law. Clause 2 of the Bill says that EU-derived domestic legislation, as it has effect immediately before exit day, continues to have effect in UK domestic law on and after exit day. Incidentally, some areas of the Equality Act apart from employment might also be 'EU-derived domestic legislation', such as information society services: see below Henry VIII clauses.

Whilst clause 2 therefore confirms that the Equality Act continues in effect, more importantly the Equality Act does not need legislation such as this for it to continue in force after Brexit. This is because the Equality Act is already a British Act of Parliament as I say above.

Incidentally, Britain introduced disability discrimination law some years before the European Union did. Indeed the EU directive on it was influenced by British law. See below UK disability discrimination law is British in origin.

'Exit day'

A note on the meaning of 'exit day' in the Bill: One would expect this to be the day on which we cease to be a member of the EU, probably 29th March 2019 when the Article 50 notice expires. However the Bill gives the government power to designate what is the 'exit day'. Indeed in the view of the House of Lords Constitution Committee, Schedule 7 para 13 of the Bill could allow the government to designate a different 'exit day' for different parts of the Bill (HL Constitution Committee interim report pdf, Sept 2017, para 20). The Committee expresses concern that the power to define the 'exit day' is not subject to any parliamentary scrutiny.

After Brexit: Effect of EU law when interpreting Equality Act

The Framework Employment Directive and decisions of the EU Court of Justice currently have a significant effect on how British courts interpret and apply the Equality Act.

Basic principle: pre-exit EU case law will still apply

The EU (Withdrawal) Bill says that in interpreting 'retained EU law':

Accordingly most UK courts will be bound by pre-Brexit decisions of the EU Court of Justice (unless legislation has been modified after exit day). However the Supreme Court will not be absolutely bound by these EU court decisions (clause 6(4)(5)). The Supreme Court can depart from pre-exit EU court decisions where it would depart from its own decisions. The Supreme Court normally treats its former decisions as binding but departs from them when it appears right to do so. This means EU court decisions as at exit day are not fossilised in stone for ever.

What about a decision made by the EU court on or after exit day? The Bill says UK courts are not bound by it after exit day, but may have regard to it if they consider appropiate (clause 6(1)(2)). Lord Neuberger, the retiring president of the Supreme Court, has said the legislation should be clearer on this. Judges would hope and expect Parliament to spell out how in a statute to approach this sort of issue after Brexit. If the government doesn't express clearly what the judges should do about EU court decisions, then the judges will simply have to do their best. However to blame the judges for making the law when parliament has failed to do so would be unfair. UK judges need clarity after Brexit - Lord Neuberger (bbc.co.uk, 8/8/17). The House of Lords Constitution Committee considers it at least arguable that the Bill should provide more guidance to the courts, and intends to consider such issues further (HL Constitution Committee interim report pdf, Sept 2017, para 67-70).

'Retained general principles of EU law' - ie the principles as they stood immediately before exit day - also need to be followed when interpreting retained EU law (clause (3)(7)). It seems the UK Supreme Court is not allowed to depart from these, but presumably the intention is that the normal clause 6 rules apply as regards case law about them. Examples of general principles given in the Explanatory Notes include proportionality, fundamental rights and non-retroactivity. Further examples given in the Equality Analysis: EU (Withdrawal) Bill (pdf), para 21, are the general principles of equality before the law, non-discrimination and equality between men and women.

The purpose of applying pre-Brexit case law is to maximise certainty. Everyone will have been operating on the basis that the law means what the EU court has already determined it does, and any other starting point would be to change the law (The Great Repeal Bill: White Paper (link to gov.uk)). Unless previous case law is applied, no one will know post-Brexit what the law is, how they should or shouldn't act - until new cases have made their way up through the courts.

A UK court would not be allowed to refer any matter to the EU court on or after exit day (clause 6(1)).

Does this apply to the Equality Act?

Is the Equality Act 2010 'retained EU law', so as to fall within those provisions on applying pre-Brexit case law?

I would certainly say yes it is 'retained EU law', so far as it implements EU law. That includes most of the Act's employment provisions. The Act would therefore be covered by the Clause 6 provisions on applying pre-Brexit case law. (Note: the House of Lords Constitution Committee disagrees, see below.)

Technical explanation of why the Equality Act so far as it implements EU law is 'retained EU law' under the Bill: Clause 6(7) pf the Bill defines as retained EU law: 'anything which, on or after exit day, continues to be, or forms part of, domestic law by virtue of section 2, 3 or 4...'. As mentioned above, the Equality Act so far as it relates to employment should largely be 'EU-derived domestic legislation' falling within clause 2 of the Bill ('clauses' become 'sections' when the Bill is passed).. It might be argued that the definition in clause 6(7) does not include the Equality Act, since the Act continues as part of domestic law because it is an Act of Parliament in its own right, rather than by virtue of clause 2. However clause 14(3) of the Bill effectively extends clause 6(7) to include anything to which clause 2(1) applies which continues to be domestic law on or after exit day, whether or not it would have done so irrespective of clause 2(1). See also para 139 of the Explanatory Notes, and footnote 5 on p.8 of them. Since the Equality Act 2010 continues to be domestic law after exit day, it can under clause 14(3) be 'retained EU law' even though it would have continued in force irrespective of clause 2.

Also, such an interpretation is very much in line with the purpose of the Bill to create certainty - to avoid past case law suddenly falling away on exit day.

The House of Lords Constitution Committee disagrees, it specifically says that the Equality Act would not be 'retained EU law' within the clause 6(7) definition because the Act would have continued in force with or without clause 2 (HL Constitution Committee interim report pdf, Sept 2017, para 26). The Committee says this in connection with the Henry VIII powers in clause 7, but clause 7 uses the same clause 6(7) definition of 'retained EU law'. However the Committee's report does not seem to consider clause 14(3) of the Bill. I think the effect of clause 14(3) is that legislation such as the Equality Act can be 'retained EU law' even if it would continue in force without clause 2.

I shall assume below that the Equality Act so far as it relates to employment is 'retained EU law'.

How does the Framework Employment Directive fit into the Bill?

As regards disability discrimination, the European directive which the Equality Act implements into UK law is the Framework Employment Directive.

Interpreting the Equality Act to conform with the directive

One important principle laid down in EU and UK court decisions is that UK legislation implementing EU directives must be interpreted where possible to conform with EU law (the Marleasing principle). It seems that after exit day this principle will therefore continue to apply under Clause 6, as 'retained case law'. This would mean that the Equality Act should continue to be interpreted in accordance with the Framework Employment Directive, including the EU court's pre-exit decisions on it. This would not apply to any post-exit modification of the Act, unless applying retained case law is consistent with the purpose of the modification (clause 6(6), clause 5(3)).

For example the EU court decisions discussed under EU law: 'normal day-to-day activity' is very wide in employment claims, and any future EU court decisions on this made before exit day, would continue to apply - unless and until the UK Supreme Court decides to depart from them. Also it seems that the many British court decisions interpreting the effect of the EU court decisions, such as the EAT decision in Paterson on 'normal day-to-day activities' under the link above, would also continue as precedents in the normal way.

It seems that British courts will even be allowed - indeed required - to depart from the express wording of an EU-derived British statute such as the Equality Act subject to the same limitations as now, in order to comply with the Framework Employment Directive and/or an EU court decision issued before exit day. That is part of what is required and allowed under the Marleasing principle, which will, it seems, be 'retained case law'. It is also consistent with clause 5(2) which says the principle of the supremacy of EU law continues to apply on or after exit day as regards enactments passed or made before exit day.This is subject of course to any post-exit amendment of the Equality Act.

This view is supported by the Government's Equality Analysis: EU (Withdrawal) Bill (pdf). The Analysis says at para 28 that 'the Bill preserves the requirement on our courts and tribunals to interpret domestic legislation, so far as possible, in light of relevant directives (this is often referred to as the duty of consistent interpretation)'. Also para 35 of the Analysis cites as an example of this principle the case of Coleman. In that case the UK courts departed from the wording of the UK statute to make it consistent with EU law.

UK courts would not be bound by EU court decisions made on or after exit day, but could have regard to them if they consider appropriate.

Direct effect

Some provisions of directives have direct effect, ie they are sufficiently clear to create rights against public bodies such as a public sector employer, if a member state has not properly implemented the directive. This is not normally that important as regards disability discrimination. The courts will normally give a wide interpretation to the Equality Act, so that direct effect is not needed.

These 'direct effect' rights would be brought into UK law on exit day by clause 4 of the EU (Withdrawal) Bill. However clause 4(2)(b) says such rights arising under a directive must be 'of a kind recognised by the European Court or any court or tribunal in the United Kingdom in a case decided before exit day (whether or not as an essential part of the decision in the case)'. 'Of a kind' is not at all clear. Paragraph 92 of the Explanatory Notes says it applies '[w]here directly effective provisions of directives have been recognised by a court or tribunal before exit day". Perhaps the Government is intending to say that a court pre-exit must have recognised the right is unimplemented in the UK and has direct effect. However the interpretation of clause 4(2)(b) and also the Government's interpretation of it seem unclear.

At present, where a directive has not been properly implemented in the UK but a person cannot rely on direct effect (perhaps it is a private sector employer), the person might be able to claim 'Francovich damages' against the UK government. However such claims are excluded after exit day by Schedule 1 para 4 of the Bill. Another option pre-Brexit in a claim against a private sector employer where an EU-compliant interpretation under Marleasing (above) is not possible is claiming under the principle in Kücükdeveci: see Framework Employment Directive>Beyond direct effect. However the Government considers such a claim would not be possible after Brexit under clause 6 of the Bill, presumably on the ground that it is blocked by Schedule 1 para 3 (para 22 of Equality Analysis: EU (Withdrawal) Bill (pdf)).

After Brexit: Ability to amend the Equality Act without regard to EU law

Uncertainty on what will be negotiated

It may be that as part of negotiations the UK will agree to abide by at least some EU law for a transitional period. This might include the EU Framework Employment Directive which covers disability discrimination.

However let us assume that the UK does not agree to continue complying with EU discrimination law after ceasing to be an EU member. Or if it does agree to do continue complying during a transitional period but is free to do as it wants afterwards, what would be the position after the transitional period?

UK could amend legislation without regard to EU law

The UK Parliament will then be entitled to amend (or perhaps repeal) the Equality Act without regard to EU law. However:

See also below Henry VIII clauses as to powers of the UK government (without Parliament) to amend statutes.

What is likely to happen to the Equality Act after Brexit?

It seems very likely in practice that the Equality Act will continue for the foreseeable future, even after Brexit.

What about amendments? Major changes to the basic principles seem unlikely, at least in the short term. However since the 2010 election there have been employment law reforms particularly in areas not covered by EU law, for example increasing the qualifying period for unfair dismissal from one to two years. When equality law no longer has to meet EU minimum standards, the government (most obviously a Conservative governement) may consider some changes to restrict rights under the Equality Act.

The Government says in its Equality Analysis: EU (Withdrawal) Bill (pdf), para 8 and 9, that it is committed to ensuring that the protections in the Equality Act 2010 will continue to apply after Brexit. It says it is similarly committed to maintaining the continued role of the Equality and Human Rights Commission (EHRC), Northern Ireland Human Rights Commission (NHRC) and the Equality Commission for Northern Ireland (ECNI)..

Capping compensation?

One possible change would be to limit the amount of compensation that can be awarded under the Equality Act. At present there is a statutory limit on compensation for unfair dismissal. Suggestions to do the same for discrimination claims have been blocked by the argument that it would breach EU law.

If a cap on Equality Act compensation is introduced, its effect would very much depend on the amount of the cap. A very small cap could mean the Act is deprived of any significant effect. More likely would be a cap along the lines of that for unfair dismissal compensation awards. In broad terms, this is currently set at one year's pay, subject to a maximum of £80,541 (for the year from April 2017). Even so this would mean a significant number of claimants no longer being compensated in full for the distress and financial loss they suffer due to unlawful discrimination. That applies particularly to claimants who have suffered more serious distress or long-term financial damage (eg long-term mental illness restricting their employment prospects), including particularly lower paid workers because the one year's pay limit for them is lower. It would also deny full compensation to those in high paid roles such as the consultant physician who was deprived of her career in the Michalak case.

Link: Cap on discrimination awards (link to yougov.co.uk).

See also next heading on the possible issue of whether Henry VIII clauses in the Bill might allow the government to make such a change without an Act of Parliament.

'Henry VIII' clauses - new government powers to amend statutes

Normally an Act of Parliament is needed to change a statute. However due to the volume of changes required by Brexit, the EU (Withdrawal) Bill (link to parliament.uk) being considered by Parliament includes extensive powers for the government to pass regulations. That includes powers, where the government considers appropriate:

These powers and the limits on them are very contentious, and will doubtless be much debated as the Bill passes through Parliament. The proposed powers are worded to go well beyond just making technical changes to legislation, and raise issues of the sovereignty of Parliament. Keir Starmer, the Shadow Brexit Secretary, set out concerns about their breadth and the lack of Parliamentary involvement in a House of Commons speech on 7th September https://goo.gl/9Lk8Hz, and the House of Lords Constitution Committee is objecting that the powers do not have sufficient safeguards HL Constitution Committee interim report pdf, Sept 2017. However, this web page deals only with the Equality Act:

Equality Act and Henry VIII clauses

It seems that as 'retained EU law' the Equality Act so far as it implements EU law on employment, and perhaps in some other areas (see below), would be covered by the Clause 7 power on remedying deficiencies. (The House of Lords Constitution Committee disagrees though, see above Does this apply to the Equality Act?) Regulation-making powers in the other clauses might also possibly apply.

Using the power to remedy deficiencies under Clause 7 or other clauses in the Bill, some areas of the Equality Act where changes might possibly be made include deleting mention of elections to the European Parliament in ss.104 and 106, s.140A on the 'Mediation Directive', and s.203 on harmonisation with EU law. Another potential area of amendment by regulation is Schedule 25 of the Equality Act dealing with services from 'information society service providers' (see eg Services: Connection with Britain>Information Society Services).

What about further-reaching changes? It is difficult to see how any really significant amendments to the disability discrimination provisions of the Equality Act would be necessary as a result of Brexit. On the other hand the wide wording of the powers in the Bill goes well beyond that, and one cannot be sure of their scope. For example the Bill uses a subjective test of what the government considers 'appropriate', and 'deficiencies' in Clause 7 is a broad term. Clause 17 could also be read very widely. However Clause 9 on implementing the withdrawal agreement with the EU, whilst very wide-reaching in other areas of law, seems unlikely to be that important to the Equality Act. This is because the withdrawal agreement seems unlikely to require changes to the Act except perhaps in peripheral areas, such as those mentioned in the last paragraph.

It has been suggested that the regulation-making powers in the Bill might, for example allow the Government, without a further Act of Parliament, to cap compensation payments under the Equality Act (above Capping compensation) which could 'gut' its provisions - see Nick Dearden This is why 'The Great Repeal Bill' is such a big threat to British democracy (independent.co.uk). Personally I rather doubt the courts would allow this particular amendment to be made by regulation, or indeed that the Government would try it. However there may be contentious amendments closer to the 'borderline' that the Government does seek to make to numerous pieces of legislation (and for legislation affected by the withdrawal agreement Clause 9 may give very wide powers indeed).

Hopefully it will be possible to word the Bill so as to make possible the very large number of adjustments to the law needed as a result of Brexit, whilst respecting that genuine Parliamentary scrutiny is required where issues are political rather than just technical.

Note: The Government points out in its Equality Analysis: EU (Withdrawal) Bill (pdf), para 11, that in exercising regulation-making powers due regard will need to be given to equality issues under the public sector equality duty. However this does little to limit government powers provided government considers the equality issues - it may decide other factors such as 'cutting red tape' override them.

UK disability discrimination law is British in origin

Though not relevant legally, it is worth bearing in mind that UK disability discrimination law originated in Britain rather than Europe.

Before the Equality Act, UK disability discrimination law was contained in the Disability Discrimination Act 1995 (DDA). The DDA was introduced by the then Conservative government and passed by the Westminster Parliament. William Hague was the Minister piloting it through the House of Commons. There was no European requirement at that time to pass the legislation.

An EU directive on disability discrimination came later, when in 2000 the EU adopted the Framework Employment Directive. This set minimum standards with which the disability discrimination law of member states must comply. The directive was passed unanimously by the Council of Ministers, so the UK agreed to it. The directive required certain changes to the DDA, which took effect in 2004. The point has been made that a great deal of the development of EU disability discrimination law was directly influenced by Britain's DDA, and by personnel who had worked in the UK on disability and then took that expertise to the EU (Evidence to House of Commons Women and Equalities Committee, 14th Sept 2016, at Q2).

When Parliament consolidated British discrimination law by passing the Equality Act 2010, further changes were made to reflect EU law, partly as a result of the Coleman decision by the EU Court of Justice. The Equality Act brought together into one place the DDA and other anti-discrimination legislation, such as that relating to sex and race, whilst also making various changes to the law.

The Equality Act would quite likely have been passed with or without the EU - though some of its provisions may well have been different without the EU as the UK would not have been obliged to meet the requirements of the Framework Employment Directive. Also EU court cases have been relevant in interpreting the Equality Act - see above Effect of EU directives and court decisions when interpreting Equality Act.

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Last updated 14th September, 2017