What will be the impact of BREXIT on Employment Law

At The time of writing (March 2019) it seems unlikely that the UK will leave the EU with a deal on 29th March. What will happen to Employment Law depends very much on whether we leave with a deal (and a transition period) or no deal, and no transition period.

Some key employment rights are domestic in origin, such as the right not to be unfairly dismissed (ERA 1996) and the right to minimum wage (NMW Act 1998). These laws are very unlikely to change as a result of Brexit.

The UK has committed to continuing certain laws, such as the changes to data protection under the GDPR and already provides some rights over and above those provided by the EU, such as 52 weeks maternity leave (14 is the requirement under the EU) and 5.6 weeks holiday (rather than the 4 weeks provided by the EU). However, there are some areas where the position is unclear and we discuss these below;

Discrimination law

The Equality Act 2010 provides protection from discrimination because of ‘protected characteristics’ such as;

  • Age
  • Sex
  • Sexual orientation
  • Disability
  • Gender reassignment
  • Marriage and civil partnership
  • Race
  • Maternity and Pregnancy
  • Religion or belief

Although the government could repeal the Equality Act 2010 after exiting the EU, to do so would be controversial. It is difficult to imagine many employers arguing that they should be free to discriminate on any of the protected grounds. However a cap may be introduced to discrimination compensation, which is currently unlimited. possibility is that the government could change the law to allow positive discrimination in favour of under-represented groups in a way that is not currently permissible under EU law.

Equality and human rights law

The Charter of Fundamental Rights of the European Union brings together in a single document the fundamental rights and freedoms of individuals; dignity, freedoms, equality, solidarity, citizens’ rights and justice.

The European Union (Withdrawal) Act 2018 (EUWA) provides that the Charter will specifically no longer be part of domestic law on or after exit day. However, the Charter is likely to still have an interpretative effect following Brexit.

The European Convention on Human Rights (ECHR) sets out minimal international standards for the protection of human rights of countries that belong to the Council of Europe. The UK’s membership of the ECHR is unaffected by Brexit. The Conservative government has previously indicated its desire to replace the HRA 1998 with a British Bill of Rights. However, it has pledged to remain a signatory to the ECHR during the course of this Parliament while the process of withdrawing from the EU is underway.

Parental leave and pay

Rights to parental and family-related leave in the UK are a mixture of rights deriving from the EU and rights originating in the UK. UK maternity leave and pay preceded the EU rights and are more generous than those rights in some respects. The right to shared parental leave and the right to request flexible working are purely domestic in origin. Accordingly, although some critics consider these rights to be a burden on business, there seems little political appetite for their repeal or even for watering them down.

Transfer of undertakings

TUPE can attract a lot of negative press but the principle that employees in a transferred business or undertaking should transfer with it is often useful for businesses and is incorporated and priced into many commercial outsourcing agreements.

Although there may be some businesses that would like to get rid of TUPE, it seems more likely that, following Brexit the government would make small changes to make it more business friendly. For example, it might choose to make it easier to harmonise terms following a TUPE transfer.

Holidays and working time

The right to statutory paid holiday is now well established and it would be deeply unpopular with workers and trade unions if it was removed. This right is also now broadly accepted by most employers. For these reasons, a wholesale repeal of the Working Time Regulations 1998 (WTR) is unlikely. However, there are aspects of the right to paid holiday and other rights under the WTR that the government may want to amend if it was not prevented from doing so by membership of the EU. Various ECJ decisions on holiday pay are unpopular with UK businesses, for example the right to keep accruing holiday while on sick leave and the fact that holiday pay should be based on all aspects of remuneration, not just basic pay. Following Brexit the government may want to retain a right to paid holiday based on basic pay and with limited rights to accrue and carry it over into new holiday years. The UK may also wish to remove the cap on maximum weekly working hours under the WTR. It is less clear whether there is a demand to limit the rights to other rest breaks or the protections for night workers contained in the WTR.

Collective redundancy consultation

Collective redundancy consultation obligations were reduced by the last government. The obligation is now not particularly onerous and trade unions are likely to fight any plan to remove it altogether. It is not obvious what would happen to this obligation following Brexit. It is possible that it could be watered down further or done away with, particularly as many employees arguably do not feel particularly strongly about this right. On the other hand, it is not clear to what extent businesses regard this obligation as a burden that needs ameliorating. Similarly, other collective consultation rights such as works councils and transnational works councils are possible candidates for removal, but the obligations imposed by them on UK businesses are relatively light.

Agency workers

 The Agency Workers Regulations 2010 (SI 2010/93) (AWR 2010) (which implement the EU Temporary Workers Directive) might be seen as a possible candidate for complete revocation as they are complex, unpopular with businesses and have not yet become embedded in a way that might make them politically difficult to remove. However, the government has not so far indicated this to be its intention. On the contrary, following the recommendations of the Taylor review, it proposes to strengthen agency workers’ rights under the AWR 2010 by removing the “Swedish derogation” so that all agency workers have the right to pay parity with effect from April 2020.

Freedom of movement

 There are currently large numbers of UK nationals living and working in other EU countries and many nationals of other EU member states living and working in the UK. Following Brexit EU nationals would no longer have the automatic right to work in the UK. One of the main issues to be covered by the Withdrawal Agreement will be the rights of EU citizens in the UK (and the rights of UK citizens in the EU).

WHAT NEXT?

If there is a deal, it is not unreasonable to think it may be dependent on the EU being satisfied as to certain levels of employment protection within the UK following the split. This factor combined with a planned transitional period from 29 March 2019 until 31 December 2020 intended to minimise the short-term disruption of Brexit, means that immediate and drastic changes to UK employment law would seem unlikely.

If the UK does leave the EU without a deal, Parliament will need time to consider what changes can reasonably be made to previous EU legislation. Many legal rights are written into an individuals’ employment contract. If key rights were suddenly withdrawn, this could cause confusion for all parties and the UK could be left with an aggrieved workforce and numerous employers facing breach of contract claims for which they would seek to hold Parliament accountable.