Cable pledges end to legal 'gold plating' and to review EU laws

The Business Secretary, Vince Cable, announced yesterday that he would put an end to the 'gold plating' of EU laws when applying them to the UK. The aim is to improve the competitiveness of UK business and to answer pleas by business organisations, which have long criticised the way the UK seems to put a stricter interpretation on EU laws than other countries.

The announcement sets out several principles which the government will apply to legislation originating from the EU. Key to the announcement is the principle that EU directives will simply be 'copied out' into UK law, rather than interpreted and re-worded – with the aim of keeping the law as simple as possible. A second principle will make it a legal duty for ministers to review UK legislation that implements EU directives every five years.

Many employment laws arise from EU directives – examples are the existing laws on working time and the new law on agency workers due to come into force in October 2011 – so at first sight, a promise to end “gold plating” of future legislation will appear attractive to employers. However, it is unclear how this will work in practice. In addition, the promise to review laws every five years could mean even more frequent changes for employers to absorb – potentially including changes to laws currently in force.

What does “gold plating” of EU laws mean?

The member states of the EU agree on the aims of laws that will affect all member states. These aims are issued as 'directives' which then must be put into force by each member state by a set date. The way these laws are put into force in the UK has been criticised in the past as being too restrictive on business – in other words, the UK has made the law more complicated than it needed to do to comply with the EU Directive.

Is this criticism valid?

Many people think so – and point to the way that other EU member states seem to find ways around directives if they want to.

Will “copying out” EU directives into UK law help?

Simply 'copying out' EU directives into UK law would mean the UK will have done the minimum necessary to comply with EU law – and will not be guilty of 'gold plating'. The problem with this approach is that EU directives are often drafted in a deliberately vague way, setting out objectives to be achieved, with the intention that individual member states will draft detailed laws appropriate to their own situations.

So, the result might not make it sufficiently clear to businesses what they need to do to comply with the law – which might be a worse problem than having an 'overly-prescriptive' law.

Is reviewing the law every five years a good idea?

All employment laws originating from the EU are subject to judgments by the European Court of Justice (ECJ). Quite often, the ECJ makes rulings that change the impact of the law – so a review after five years would be a good idea, if only to ensure the UK has laws that comply with ECJ rulings. This in turn will mean that employers will not run the risk of a legal challenge in the European Court even when they have complied with the UK law.

In addition, the government’s proposals include a promise to consult with business during any review and to ensure EU law places the least possible burden on UK businesses, which again should be helpful to business owners.

Set against this is the disruption to business that is likely to be caused by the constant revision of existing laws – which already take time and resources to understand - while new laws are being added as well.