Post-Brexit Employment Rights

In this piece, Tom Jones and Richard Arthur of Thompsons discuss what the new Brexit ‘freedoms’ could mean for workers’ rights in the UK. They identify the immediate impact of the cessation of EU supremacy (and therefore a whole host of employee protective precedent from the CJEU) together with a range of unfortunately low hanging fruit that is likely to be targeted by the Conservatives as they deregulate to counteract the economic headwinds unleashed by the end of the transition period at the end of the year.

The UK left the European Union on 31 January. But existing and new EU laws continue to have effect in the UK essentially as before – for now at least. With the UK economy in lockdown due to the Covid-19 crisis at the time of writing, EU workers’ rights are very much centre stage. Requirements for personal protective equipment and health and safety at work, protection for workers in the event of employer insolvency, collective redundancy consultation rights, current debates about annual leave and furlough and the equalities dimensions of the crisis all have significant foundations (and protections) in EU law.

The European Union (Withdrawal) Act 2018 provided for the repeal of the European Communities Act 1972, but its effect is saved throughout the ‘implementation period’ which expires on 31 December 2020. This is achieved by the European Union (Withdrawal Agreement) Act 2020, which provides for the implementation in the UK of Boris Johnson’s withdrawal agreement.

The EU (Withdrawal Agreement) Act 2020 says nothing specifically about EU workers’ rights (unlike Theresa May’s draft Bill which included a mechanism for reporting to parliament about future EU workers’ rights). But its effect will be that, at the end of the implementation period, they (in common with other EU laws applicable in the UK) will be converted into and, retained in, UK domestic law. This means that the full range of EU workers’ rights (as well as those directly relevant to the Covid-19 crisis already mentioned) will continue to apply unless and until they are changed by UK legislation. This includes agency workers’ rights, discrimination rights (to the EU standard) and part-time workers’ rights.

However, it is not just the existence of these rights that has been so fundamental to workers’ rights in the UK. It is also the uniquely powerful set of principles and procedural requirements which attached to those rights under EU law have enabled them to be enforced so effectively. Those requirements have led to advances such as removing the cap on discrimination compensation, widening the scope of comparators in equal pay cases and TUPE applying to public sector contracting out.

Whilst some of the requirements are preserved to a limited extent after the end of the implementation period, for example, subject to the exercise of the wide modification powers in the EU (Withdrawal) Act 2018, retained EU workers’ rights will be interpreted in accordance with pre-exit case law of the Court of Justice many of the requirements will be diminished or abolished from the end of the implementation period.

  • The principle of the supremacy of EU law over new domestic laws (made after the end of the implementation period) will no longer apply.

  • The civil, political, social and economic rights found in the EU Charter of Fundamental Rights will no longer form part of domestic law.

  • The ability of individuals to sue private employers or public authorities for their failure to comply with any of the ‘general principles’ of EU law, such as the principle of equal treatment, will no longer be available.

  • The power of UK courts to dis-apply laws, or find conduct unlawful, because of incompatibility with the ‘general principles’ of EU law will disappear.

  • The right of individuals to sue public authorities where their actions are in breach of EU law and have caused those individuals loss (the ‘Francovich rule’) will end.

Importantly, a little talked about change made to the EU (Withdrawal) Act 2018 by the EU (Withdrawal Agreement) Act 2020 opens up the possibility of lower courts and tribunals departing from EU retained case law. Section 6(4)(ba) of the 2018 Act will provide (once the amendment is brought into force) that a ‘relevant’ court or tribunal is not bound by any retained EU case law so far is provided by regulations. Which courts or tribunals will be ‘relevant’, and the test which they must apply in deciding whether to depart from retained EU law can be made by regulation passed before the end of the implementation period.

Under Boris Johnson’s deal, references that had been in the previous wording to maintaining a level playing field in relation to matters such as labour standards were moved from the legally binding withdrawal agreement to the non-binding political declaration on the UK’s future relationship with the EU. Since Parliamentary ratification of his deal, Boris Johnson and his Ministers have made it very clear that they are opposed to so-called ‘dynamic alignment’ between the UK and EU when it comes to workers’ rights after the end of the implementation period. Such public opposition to dynamic alignment is a political green light for workers’ rights derived from the EU and disliked by the government and business to be dismantled as soon as the implementation period is over.

The Agency Workers Regulations could be vulnerable as they are unpopular with many businesses, given they are a significant barrier to cost-cutting at the expense of workers’ wages. Age discrimination protection may also be vulnerable. It is easy to see that justification for both attacks will be to ‘free up’ businesses.

Aspects of the protection of working time that EU workers (and currently UK workers) enjoy – such as those on long term-sick leave accruing rights to holiday pay; whether ‘holiday pay’ should include say commission and overtime; and whether the 48-hour limit on weekly working time should be abolished – could all be presented as restrictions on workers’ freedom to sell their labour as they might want.

A long identified target of successive Conservative governments has been the TUPE Regulations, which provide protection and continuation of contractual terms in the event an undertaking is transferred between owners. Making a new owner take on the contractual terms of their predecessor may provide continuity and certainty for workers who wake up to find they have a new boss, but it takes away the ability of a new contractor to use the fact of the transfer as an excuse to level down to terms that financially and administratively suit them. That fetter on ‘free enterprise’ has, quite apart from the domestic law issue of ‘service provision changes’ been the target for those who come in to take over contracts and companies.

The potential for a radically changed landscape of rights that workers’ have enjoyed for generations comes at the same time as the government is refusing to commit in its future trading relationship with the EU to continued participation in the European Convention for the Protection of Human Rights and Fundamental Freedoms (which will become even more important as the EU Charter of Fundamental Rights ceases to apply in the UK at the end of the transition period). It also coincides with the government’s intention to restrict the ability of trade unions to organise industrial action in the transport sector through the introduction of minimum service obligations. Whether that position survives the reconstruction that will be required following the Covid-19 crisis remains to be seen.

©2020 by Society of Labour Lawyers.