For nearly 50 years UK businesses have had to take account of legislation arising from the UK’s membership of the EU. Paul Clarke examines the background to that legislation, describes to what degree it will apply now the UK has left the Union and discusses what impact future European law will have on those trading with the EU Member States.
Possibly the best known of Europe’s legislative options, directives are used by the European Commission in areas where the Member States can be given general policy outlines and targets and left to devise, within their own legislative processes and traditions, how those principles should be achieved. Underpinning this system was the proviso that any dispute as to the meaning of an individual item of legislation would ultimately be subject to a decision by the Court of Justice (CJEU).
Over the years, this legislative path gave us the Working Time Directive, the Equal Treatment Directive, the Waste Framework Directive, the Industrial Emissions Directive and a whole range of health and safety legislation including the Personal Protective Equipment Directive, the Machinery Directive and the Pregnant Workers Directive. One factor common to them all is that they always come with a long lead-in period, typically two years, to allow the Member States time to devise domestic legislation that will (subject to Commission approval) properly implement the Directive’s requirements.
When it comes to sectors where allowing individual Member States to put their own interpretation on legislation would cause problems, such as trade, the Commission has always used regulations to ensure strict conformity. They generally come into effect within a few weeks of appearing in the EU’s Official Journal and apply directly across the Union ensuring, for example, that all Member States impose identical tariffs on cars from a non-EU country on the same day.
Where implementing legislation is required by the Member States with regard to EU regulations, it is only to introduce, for example, specific national penalties for failing to comply with the new rules. Probably the most significant EU legislation of this type in recent years was 2016’s General Data Protection Regulation (GDPR). This was supplemented by the UK’s Data Protection Act 2018 which extended its requirements into areas not covered by the EU law. The Act does not, however, implement the GDPR in UK law (despite insistence to the contrary by many online guides). As we have already established, EU regulations do not need implementation.
Still on the subject of regulations, another important body of European law brings us to the question of what happens now, with the UK no longer a Member State and no longer tied by the requirements of the transition period. The mass of legislation adopted under Regulation (EC) 1907/2006 concerning the Registration, Evaluation, Authorisation and Restriction of Chemicals (the REACH Regulation) has had significant impact in the outside world as well as within Europe. This comment from a business forum in the United States will illustrate its international importance: “US companies are not immune to REACH requirements or penalties and should incorporate REACH requirements into their environmental health and safety compliance programs and their long-term planning.”
The REACH Regulation, and its numerous amendments covering everything from dangerous chemicals to the labelling of tyres, have applied in the UK since 1 June 2007 and would not only leave a large hole in the statute book if they were removed but, if the US argument is valid, would leave UK manufacturers at a disadvantage if they were unaware of changes to REACH standards as they continue trading with the EU.
Retained EU law
It would have been impossible to replace all EU laws in the time available and allowing them simply to lapse would, as suggested above, have left whole industries lacking vital legislation. The answer was the European Union (Withdrawal) Act 2018 which repealed the European Communities Act (ECA) 1972, the legal channel through which parts of EU law were given direct force in the UK. It takes the great majority of legislation derived from EU law and ensures that it remains applicable, at the Government’s discretion.
The Government also took specific powers to amend this “retained EU law” in order to correct deficiencies arising from the UK’s withdrawal from the Union. This could involve, for example, removing an instruction that certain matters are to be reported to the European Commission and replacing this requirement with one naming a relevant UK body such as the Health and Safety Executive (HSE).
REACH is again a good example of ensuring that former legislation is carried forward as, on 1 January 2021, the Government introduced UK REACH. This ensures REACH, and related legislation, will be replicated in the UK with the necessary changes to make it operable in a domestic context. “The key principles of the EU REACH Regulation will be retained”, the Government guide confirms. It is important to note that, while UK REACH currently mirrors the original, it is an independent regime and could diverge in the future.
With a body of law as well-established on the world stage as REACH, however, it is difficult to see why the Government would want to break away from it and thus make life more difficult for its manufacturers and exporters. It therefore seems likely that it will continue to follow the development of the EU regime and that UK companies will accordingly need to stay aware of developments in Brussels.
Another sector where it will be difficult to break ties with the Union is transport, given the daily movement of thousands of lorries in both directions across the Channel and the significant body of EU law that has built up regarding matters such as driver training, tachographs, inter-continental passenger transport and the regulation of driving hours. In recent months, in line with the plans described above for retained EU law, we have seen examples such as the Carriage of Dangerous Goods and Use of Transportable Pressure Equipment (Amendment) (EU Exit) Regulations 2020, made in order to “restate retained EU law in a clearer and more accessible way” (including the Dangerous Goods Directive and the Transportable Pressure Equipment Directive).
In a further indication of the Government’s intention to stay reasonably close to EU transport law, the Driver and Vehicle Standards Agency (DVSA) announced on 4 January 2021 that it is to monitor Driver Certificate of Professional Competence (CPC) periodic training to ensure drivers are not unnecessarily repeating training as part of the 35-hour requirement (introduced by Directive 2003/59/EC on the initial qualification and periodic training of drivers of certain road vehicles for the carriage of goods or passengers). “This follows,” the Agency explained, “a review of Driver CPC training and recommendations made by the European Commission which the Government has adopted.”
In the UK-EU Trade and Cooperation Agreement (TCA), the two sides agreed that divergence would be possible but, if it tends to give one side an unfair advantage in terms of trade between the two, then a mechanism is in place to impose sanctions in the form of tariffs on the guilty party. While the UK Government has its long-awaited freedom to go its own way, therefore, it risks penalties if it does so to the detriment of EU companies. In addition, as we have seen with REACH, there are clear business reasons why it should stay close to areas of EU law that are internationally recognised and the gateway for manufacturers wanting to trade with the Union. This also applies in areas such as transport where the two sides will continue to be working closely together.
Not surprisingly, given the way the recently concluded trade agreement took so much attention and ministerial time, not to mention the ongoing complications of the coronavirus pandemic, the Government has not yet made clear its intentions with regard to regulatory alignment. For at least the next few years, however, the above arguments suggest that the UK will probably remain closer to the EU than the Brexit rhetoric has perhaps indicated. It will therefore continue to be a sensible business decision to stay on top of the Union’s legislative moves in key areas such as trade, transport and health and safety.