Will Brexit change employment law?

The UK’s transition period out of the EU ended on 31 December 2020 and existing EU law was converted into domestic UK law.  There’s often a perception that the protections to which UK employees are entitled all flow from Europe. So what are the potential implications on employment law of a post Brexit UK?

Here we explore some of the misconceptions around the EU and wider UK employment law and whether or not our employment laws are now going to change in the wake of Brexit.

Misconceptions with European and UK employment law

It may come as a surprise that the law on ‘ordinary’ unfair dismissal, minimum wage and breach of contract – together with many other employment laws, historic and recent – are not related to the European Union.

The UK had anti-discrimination laws in place long before its membership of the EU required it to.  While it is true to say that the Equality Act 2010 implements EU law, we had race and disability discrimination laws in place in the UK before EU anti-discrimination legislation.  This was also the case for the UK law in relation to equal pay and the right to maternity leave and pay.  And many UK laws are more generous than the EU requires – our maternity leave and pay are great examples.

Another common misconception is that leaving the European Union has freed the UK of its obligations under the European Convention on Human Rights (ECHR), which can have a bearing on employment cases, including an employee’s right to a private life. The ECHR sets out standards for the protection of human rights and applies to countries that belong to the Council of Europe.  However, the Council of Europe is a separate organisation from the European Union and the UK’s membership of the Council of Europe is not affected by Brexit.  The Human Rights Act will continue to apply (although, prior to the EU referendum, the UK government had indicated an intention to replace the Human Rights Act with alternative provisions).

That all said, the UK’s membership of the European Union has clearly had a major influence on UK employment law. For example, prior to the UK joining the EU, we did not have in place any specific protections for agency workers.  In addition, the binding effect of judgments of the European Court of Justice (ECJ) on UK Tribunals as to how a particular European Directive should be interpreted extended employee rights beyond what the UK courts would have done. A good example of this is in the calculation of holiday pay.

What might change in the future?

We have considered some of the more common areas of UK employment law in which the European Union has had a material influence:

1. Working Time Directive/Regulations

This legislation gives employees the right to certain rest periods and breaks and to paid holiday.  While the UK has extended holiday entitlement, beyond the European minimum of 4 weeks, to a total of 5.6 weeks, there are other aspects of the legislation which have been more controversial in the UK.  For example:

• For an employer to lawfully permit an individual to work more than an average of 48 hours a week, it is necessary that the individual has signed an ‘opt out’ form – but the individual can cancel that agreement for any reason.
• A week’s pay for holiday pay purposes must now include certain overtime and commission payments as a result of European law.
• Those who have been off sick or on maternity leave continue to accrue holiday entitlement while off and can carry forward unused holiday from one year to the next.  They can return to work with a year or more of annual leave still to take.

2. The Equality Act 2010

The 2010 Act protects individuals who are, or might otherwise be, subject to unlawful discrimination on the grounds of the ‘protected characteristics’ set out in the legislation (age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, sexual orientation).  While many of the principles, but not all, were already part of UK law, EU law has extended some protections.

3. Continuity of employment – TUPE

Broadly speaking, the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) ensure that employees have continuity of employment, on the same terms and conditions, if a different employer takes over.  This can happen where part of a business is sold or where a contract was lost to another provider.  TUPE means that the successful organisation/the purchaser must employ the individuals on their existing terms and conditions and it gives employees certain rights if the employer fails to do so. While some businesses would like to get rid of TUPE, it seems more likely that the government might make small changes to the regime to make it more business friendly.

Is employment law going to change much now the UK has left the EU?

Probably not. Or at least not soon…

Discrimination law

‘Think tanks’ have discussed whether a cap should be applied to discrimination awards (as there is in unfair dismissal cases), and that is one possibility. More generally though, rightly or wrongly, few major employers will rush to openly argue that what is currently deemed to be discrimination should, now post Brexit, be permitted. The UK Government has anticipated that there will be limited or no adverse impact on equality legislation post Brexit.

TUPE

There are potentially cumbersome obligations in TUPE that might be tweaked, for example in relation to the consultation process or in changing terms and conditions after the transfer. Other than that, TUPE is a law that protects employees and can potentially be helpful to businesses where those who lose work to a competitor no longer need as many staff but cannot afford to make redundancies.  So, there is no great clamour for change.

Working Time Regulations

The 48 hour working week and obtaining opt-out forms is not an everyday problem for most businesses.  Most have become familiar with the issues in relation to holiday pay, holidays and rest periods.  Other than tinkering around the edges in things like on-call working and perhaps the calculation of holiday pay in due course, no great change is anticipated.

Summary

There are very few areas of EU-derived law in which significant reform might be popular with employers or employees and be politically acceptable.

Given the numerous other priorities that the UK Government are facing following Brexit and the current COVID-19 pandemic, it appears unlikely that a material shift in employment law will reach the top of the To Do list in the months and even years to come.

However, future ECJ judgments will now not have the binding effect on UK courts and Tribunals that they previously had. The Court of Appeal and the Supreme Court can now deviate away from ECJ decisions “where it appears right to do so”.  The UK is not bound by future decisions of the ECJ but can still have regard to them if it is relevant.

The UK Government will not be obliged to implement any future EU Directives, unless there is an agreement to that effect. Over time, there will be a gradual divergence in rights between those in the UK and those in the EU.

But anything can change.  Theresa May said, in 2016, “…let me be absolutely clear: existing workers’ legal rights will continue to be guaranteed in law – and they will be guaranteed as long as I am Prime Minister.”……

Further advice

Anderson Strathern has a team of specialists in Employment Law.  We handle all aspects of Employment Law matters for employers and employees, including:

• Advice on discrimination law and unfair dismissal, including during internal proceedings and then bringing or defending Tribunal claims.
• Providing our own HR Business Partner to clients to investigate allegations on their behalf or to provide HR assistance during hearings.
• Drafting, negotiating or advising on settlement agreements.
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