Brexit - what now for employment law?

Posted: 24/10/2019

Much of the law under which we operate is now in theory open to amendment or revocation. In practice there is not going to be a bonfire of legislation.

Expect more flexibility than before. Employment law has long been a bellwether of a government’s political slant. The core of employment law is perhaps unfair dismissal, a domestic concept, unaffected by the EU. In the 1980s, the qualification period for unfair dismissal rose under the then Thatcher administration to two years. New Labour brought it down to one year and the coalition government brought it back to two years. Now that all aspects of employment protection law will be free from EU control, such political agendas and variations can apply across the board. Depending on the make-up of the government, Parliament will be able to protect workers’ rights or remove red tape as required. There are however some fairly safe assumptions:

• there will not be radical change. Our system is fundamentally a combination of ‘natural justice’ and ‘anti-discrimination’. To remove any key rights would be extraordinary;
• the majority of EU employment law has been brought into effect by UK legislation and will remain in force until repealed;
• many aspects of employment protection are either based in or developed from UK law, for example equal pay;
• we will cease to be affected by further developments from Europe, such as the anticipated work-life balance directive for working parents and carers and a directive on gender balance at board level;
• workers in ‘emanations of the state’ will no longer be able to rely on the direct effect of EU directives;

Businesses will also need to consider the implications to their workforce and should plan for the worst-case scenario. The government has confirmed the following:

• there will be no changes to the rights and status of EU nationals residing/working in the UK at present;
• if there is a deal, EU nationals who are working in the UK before 31 December 2020 will have until 30 June 2021 to apply under the EU Settlement Scheme;
• if there is no deal, EU nationals who are working in the UK before 2300 hours on 31 October 2019 will have until 31 December 2020 to apply under the EU Settlement Scheme and EU nationals who move to the UK from 1 November 2019 will have to apply for a three-year temporary immigration status.

The message given by Brexit is that a more economically liberal and less regulated legal framework is likely. Although the government has promised to write a series of commitments into the Withdrawal Act to ensure that workers’ rights are protected, it is difficult to determine whether these pledges will carry any weight. With the Labour Party in disagreement, it is hard to see the left wing vision for Brexit, namely the enhancement of workers’ rights, taking effect. Two trends are likely to emerge:

• the removal of the less business-friendly aspects of certain laws and regulations (as opposed to the complete revocation of many of these laws). We can expect firms to be allowed to ‘harmonise’ the terms and conditions of their workforces after a TUPE transfer. We might see holiday no longer accruing over sickness and holiday pay no longer including commission on top of basic salary. A loosening of the obligations on an employer during collective redundancy consultation might also occur. Perhaps more controversially, there may be the abolition of the Agency Workers Regulations and possibly even the reintroduction of caps on tribunal discrimination awards (last seen in the 1990s).
• the end, or at least the scaling back, of the broad ‘purposive’ interpretation of laws as developed in numerous European Court of Justice decisions. This is particularly true in areas of discrimination with sex discrimination showing how leading judgments of the European Court ensured that pregnant women were fully protected in areas that had previously left them vulnerable. That purposive effect may still be seen in our domestic courts but the intention of Parliament will now take precedence.

Whether Brexit leaves workers more exposed or allows companies more flexibility and growth will remain to be seen.

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