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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 Parliament will be entitled to amend the Equality Act without regard to EU law. This is the position under the proposed EU (Withdrawal) Bill, commonly known as the 'Great Repeal Bill'.

Summary

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).

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 the British Parliament 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) 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 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. 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, since it is already a British Act of Parliament as I say above. (Footnote 5 on p.8 of the Explanatory Notes confirms that clause 2 is not intended to be limited to legislation which would otherwise fall away with the repeal of European Communities Act 1972.)

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.

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).

'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.

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? Probably it is supposed to be, though the Bill's wording is not clear.

As mentioned above, the Equality Act so far as it relates to employment is probably within clause 2 of the Bill. Clause 6(7) 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...'. However the Equality Act really continues as part of domestic law because it is an Act of Parliament in its own right, rather than by virtue of clause 2. Even so it would make sense for the Equality Act to be included. The Bill may well be clarified before it is passed. If not, I think it is probable that courts interpreting clause 6(7) would give it a meaning wide enough to include Acts of Parliament such as the Equality Act which implement EU law into the UK. Such an interpretation would be very much in line with the purpose of the Bill to create certainty - to avoid past case law suddenly falling away on exit day. It would also avoid the courts having to decide whether or not a particular piece of legislation would have fallen away but for clause 2 (cf para 72 of Explanatory Notes), when there is no sensible reason why that should make any difference as to whether clause 6 applies.

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 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-Brexit decisions on it. This would not apply to any post-Brexit 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 Britain leaves the EU, 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-Brexit amendment of the Equality Act.

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 very clear. Paragraph 92 of the Explanatory Notes seems to say it is a question of whether the particular provision of the directive has been recognised as having direct effect in a court decision prior to exit day.

It seems therefore that one would have to check whether the particular Framework Employment Directive provision has been said in a court decision to have direct effect pre-exit day.

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 may 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. Nevertheless, in a case against a private sector employer where an EU-compliant interpretation under Marleasing (above) is not possible, it may still be possible under clause 6 of the Bill to rely on the principle in Kücükdeveci: see Framework Employment Directive>Beyond direct effect.

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

Uncertainty on what will be negotiated

From government statements one would think it unlikely that in negotiations the UK will agree to remain bound by EU employment laws after it leaves, such as the Framework Employment Directive which covers disability discrimination. The emphasis is that the UK will be 'free' of EU law and the jurisdiction of the EU Court of Justice as soon as it leaves. Even so an agreement for some continuing compliance with EU law remains possible depending on what is negotiated. In particular, in July 2017 there has been a move towards having an 'implementation' or 'transitional' period. If the purpose of this is to have trade continue during the implementation period much as before Brexit, the EU may say that is only acceptable if the UK is not allowed to undercut other EU businesses by reducing social protections such as the Equality Act during that period.

However let us assume that the UK does not agree to continue complying with EU discrimination law after it ceases to be an EU member. Or if it does reach some special agreement during the implementation period but is free to do as it wants after that, what would be the position after the implementation 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. The UK would remain legally obliged to comply with the UN Disability Convention (CRPD), but that is less detailed and its enforcement mechanisms are weaker than EU law.

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.

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, this would probably mean some claimants no longer being compensated in full for the financial loss they suffer due to unlawful discrimination. That applies particularly to claimants who have suffered long-term damage (eg long-term mental illness restricting their employment prospects), or who are in high paid roles, such as the consultant physician in the Michalak case.

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

'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 power for the government to pass regulations, for example to remedy deficiencies in 'retained EU law' arising from the withdrawal of the UK from the EU (Clause 7), or for the purpose of implementing the withdrawal agreement (Clause 9). In many cases these powers are subject to Parliamentary scrutiny. However these provisions are particularly contentious and likely to be much debated as the the Bill passes through Parliament.

It seems that as 'EU retained law' the Equality Act so far as it relates to employment (and perhaps some other areas, see next paragraph) would be covered by these powers. However it is not apparent at present how any really significant amendment of the Act's disability discrimination provisions would be appropriate under the proposed powers, either to correct problems from leaving the EU or as a result of implementing the withdrawal agreement.

One potential area of amendment by regulation might be Schedule 25 of the Equality Act dealing with services from 'information society service providers' (see eg Services: Connection with Britain>Information Society Services). Some examples of more minor changes to correct the Act might be deleting mention of elections to the European Parliament in ss.104 and 106, dealing with s.140A on the 'Mediation Directive', and s.203 on harmonisation with EU law.

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 8th August, 2017