Although EU law has provided for common standards and rules in many areas, Brexit would probably not have a significant effect on the existing employment law position, at least in the short term. The UK government has committed to maintaining the same rights as now exist for the immediate and perhaps foreseeable future.
There is a significant part of the Brexit supporting activists in the UK who expressly wish to use Brexit as an opportunity to significantly change labour rules. Publications on behalf of certain pro-Brexit factions very consciously see the removal of EU inspired employment regulation as critical to making the economy more efficient
Historically the UK and in particular Conservative governments have objected to UK employment rules, particularly those of a social nature. In the 1990s, the UK opted out of large parts of the EU Social Chapter which was part of the EU Constitution. The UK eventually opted in 1998 after the Labour government was elected.
While the above elements are part of the overall mix, the bulk of the Conservative party including Prime Minister Theresa May has committed to maintaining at least the same and higher levels of employment rights. This has been particularly evident in the attempt to obtain cross-party support from the Labour Party.
It has been claimed that over the years of EU employment and social legislation has been a drag on UK productivity. It is claimed that the UK’s international competitiveness could be regained or increased by the deregulation of the labour market. The UK originally opted out of the Social Charter, before the1997 Labour government acceded to it.
During the Brexit campaign, the Remain side emphasized the role of EU laws in protecting workplace rights. including the rights to paid holiday leave, working hours, equality, health and safety standards and parental/maternity rights.
On being elected to office, Theresa May emphasised that the government would not seek to dismantle EU employment rights. In her Lancaster House Speech of January 2017, she that the government would protect the rights of workers in European legislation and build on them. The government would make sure that protections for workers kept pace with the changing labour market and that the voices of workers would be heard on the boards of listed companies for the first time. This view has been repeated several times, including n the White Paper on the repeal bill.
Apart from the political commitments, it is likely that any trade agreement between the UK and the EU will have some provisions for maintaining a floor of basic employment rights, so as to ensure a level playing field and prevent unfair competition.
The EU negotiation mandate provides that any future free trade agreement must provide a level playing field in terms of competition and state aid and must encompass safeguards against a competitive through tax, social, environmental regulatory measures or practice.
Many UK Rights Exceed EU Minimum
In practical terms, it is unlikely that Brexit will significantly affect UK employment rights of your UK/Northern Ireland employees. Certain marginal aspects of employment legislation such as accruing common social insurance records and hosted workers provisions may change simply because the United Kingdom is no longer in the EU. However, there is every chance that similar new and equivalent replacement provisions would be agreed between the EU and the UK.
It is a feature of modern trade agreements that at a very minimum International Labour Organisation standards which are a worldwide very bottom-line benchmark are agreed to apply. The EU UK agreement could be expected to go a good deal further in providing a guarantee for benchmarking of minimum employment rights and conditions.
It is likely that the EU would not wish to grant the UK widespread access to EU markets if there was any possibility that the UK would compete against the EU to the EU’s detriment using lower employment standards.
In the draft withdrawal agreement, which has not been ratified the backstop provisions for Northern Ireland provide for UK wide alignment of labour and social standards. These provisions may be carried through into a future EU UK agreement.
The withdrawal agreement backstop provides that with the aim of ensuring the proper functioning of the single customs territory the EU and UK will ensure a level of protection provided by law regulations and practice which is not reduced below the common standards applicable within European Union and United Kingdom at the end of the transition period in the areas of labour and social protection and as regards fundamental work rights, occupational health and safety fair working conditions employment standards information and consultation rights at company level and restructuring.
There is provision for protecting and promoting social dialogue and labour matters between workers and employers and their respective organisations. There is provision for exchange of information and the EU and UK reaffirmed their commitment to implement international labour standards and human rights standards
Future Trading Declaration
If a comprehensive agreement is entered between the UK and the EU, it is likely that there will be provisions which seek to preserve the level playing field, including in the area of employee rights
In the so-called Joint statement on the future relationship, the so-called level playing field rules contemplate that the future relationship must ensure open and fair competition which is to include provisions as to employment standards.
As you will be aware from operating business in both the Republic of Ireland and Northern Ireland, the broad employment rules in both jurisdictions are very similar. Northern Ireland employment law is technically different to that in England and Wales and is enacted either by the Northern Ireland Assembly when is exists or through so-called Orders in Council in earlier periods when it didn’t exist.
These rules are unique to Northern Ireland but are very much based on a UK wide template. The main obvious difference to the UK rules is the presence of the 1970 their employment rules based on religious background.
EU Based Employment Rules
Although the Northern Ireland and Republic of Ireland rules are very similar only approximately half of this similarity is driven by EU membership. There are common trade union bodies and the UK and Irish labour markets have long been very similar. To some extent, this has driven a very significant degree of convergence in employment law.
The following are the broad areas of employment law driven by EU legislation. In nearly all of these areas it would be surprising if the UK moved to make different rules simply because it could, at least in the short term.In broad terms, EU derived employment legislation applies in the following categories.
Consultation and participation
- Directives on information and consulting
- European Works Council,
- collective redundancies,
- transfers of undertaking
- Treaty on equal pay
- Directive on social security
- Directive on equal pay and treatment.
- Directive on race
- Directive on sexual orientation, age, etc.
- Directive on a self-employed
- Directive on pregnant workers
- Directive on part-time workers
- Directive on fixed-term workers.
- Directive on agency work.
- Directive on parental leave.
- Directive on working time;
- Directive on young workers;
- Directive on workers in cross-border railway services civil aviation and road transport.
- Direct regulations on daily and weekly driving times
Health and safety.
- Framework directive on health and safety.
- Directive on minimum workplace requirements.
- Directive on personal protective equipment.
- Directive on display screen equipment.
- Directive on manual handling of loads.
- Directive on atypical workers.
- Directive on construction sites.
- Directive on extractive industries.
- Directive on safety signs.
- Directive on noise
- Directive on mechanical vibration.
- Directive on biological agents.
- Directive on work equipment.
- Directive on carcinogens
- Directive on asbestos
- Directive on explosive atmospheres
- Directive on electromagnetic fields.
Non-EU Laws Similar to Ireland
In contrast, many of the most important areas of employment protection which are in fact very similar in many EU countries including the UK and Ireland are not protected or required by EU law at all including in particular
- Minimum wage
- dismissals against unfair protection
- basic redundancy rights
- right to collective bargaining
- weights to take industrial action
Many UK Rights Exceed EU Minimum
The White Paper indicates that the UK is committed to maintaining the UK as a global leader on worker’s rights and to make sure that protection for workers keeps pace with the changing labour market.
Many aspects of EU law are minimum requirements and do not prevent the states from providing more extensive rights. Many states do provide such provide more extensive rights. The UK has provided greater rights than the EU minimum in many employment-related areas.
The Prime Minister in her Lancaster House speech in January 2017 pointed out that in several areas the UK provided greater employee protection than the EU minimum. For example,
- 5.6 weeks of statutory annual leave (4 weeks EU law).
- 52 weeks of statutory leave and 39 weeks of pay (14 weeks EU law minimum).
- Greater flexibility regarding parental leave (to 18th birthday).
- The National Living Wage.
There have been reductions of rights in areas not regulated by EU law since 2010, more notably the increase in the qualification period for unfair dismissal. The Lancaster House speech also indicated that if negotiations for a new deal did not succeed or there was a punitive deal (no deal for Britain is better than the bad deal for Britain,) that the UK would be free to set competitive tax rates and embrace policies that would attract the world’s best company and biggest investors to Britain.
Some EU employment rights reflect Continental practices and policy in relation to bigger corporations/companies. In particular, there are provisions and proposals for representatives at board level in corporations which are distinctly European and may not be supported post-Brexit. The Prime Minister has indicated that the UK will retain and develop laws on employee participation in corporate management structures.
The Repeal (and Restatement) Act
The “Repeal” Act will re-enact existing EU law, including those elements of employment law that are not reflected in freestanding UK legislation on Brexit day. The directly applicable EU regulations will continue to have effect.
In the employment field, very many employee rights are derived from EU directives which have been implemented in the UK. Most of these have been implemented in legislation or orders under the European Communities Act 1972.
The White Paper indicates that where protections are provided by the EU treaties that they will be preserved. Where rights in the treaties can be relied on directly by an individual in court, it is intended that they are incorporated into UK law.
The White Paper also indicates that if there is a conflict between pre-Brexit laws and post-Brexit laws between two pre Brexit laws, one of which is has an EU basis, and one of which is not, the EU basis (which would have carried the principle of EU supremacy) will take precedence (necessary to maintain consistency).
The Repeal Act provides that changes may be made to secondary legislation by Order in Council. To the extent that employment rights derived from EU directives are reflected in such secondary legislation, they may be subject to change without Act of Parliament subject to the scrutiny provisions under the Repeal Act.
The Repeal Act proposes that questions of EU derived law are to be interpreted by reference to the CJEU case law as it applies on Brexit day. This is necessary from the perspective of continuity and consistency of law. After Brexit, the Supreme Court can in principle depart from EU precedents. However, it is expected that it will do so occasionally, sparingly. Parliament may change the law at any time, and it may be capable of change under the Repeal Act to the extent permissible thereunder. It is likely that British courts, UK courts will continue to find EU cases on legislation derived from a common to be persuasive.
Limits on Continuity
It seems likely that the UK courts will continue to have regard to the provisions of the EU treaties and EU case law in interpreting employment laws. In some cases, the employment law directives, are informed by particular treaty provisions, especially in the area of equality.
There are limits. The general EU principles in the Treaties, the Charter, EU citizenship, principles of market integration will longer apply and will cease to guide the courts in the interpretation of legislation.
Brexit will mean that courts may no longer refer to the Court of Justice for rulings on points of EU law. Previously where matters had concerned the UK, UK advocates participated. Intrinsically references, etc., from the UK will cease to exist so that the remaining case law might become somewhat different than it might otherwise have been.
Some labour law measures have a huge intrinsically multistate aspect, such as the Posted Workers Directive. The broad position is that the rules of the home state continue to apply. It is unclear as to how such principles will apply post-Brexit.
In so far as the Charter of Fundamental Rights informs or applies to employment law matters, it will be no longer available to challenge legislation or administrative acts in the UK. It is not intended to be incorporated in EU law as overriding law, or at all, by the Repeal Act.
The White Paper indicates that the removal of the Charter of from UK law will not affect the substantive rights that individual already benefit from, in the UK. Many of these underlying rights exist elsewhere in the body of EU law which will be converting into UK law. Others already exist in UK law, or in international agreements to which the UK is a party.
UK Guidance on Employment No Deal
After 29 March 2019 (may also apply to new exit date on 31 December 2020) if there’s ‘no deal’
The EU (Withdrawal) Act 2018 brings across the powers from EU Directives. This means that workers in the UK will continue to be entitled to the rights they have under UK law, covering those aspects which come from EU law (including those listed above except where caveated below). Domestic legislation already exceeds EU-required levels of employment protections in a number of ways. The government will make small amendments to the language of workplace legislation to ensure the existing regulations reflect the UK is no longer an EU country. These amendments will not change existing policy. This will provide legal certainty, allowing for a smooth transition from the day of EU exit, and will ensure that employment rights remain unchanged, including the employment rights of those working in the UK on a temporary basis, except where set out below.
The UK government will continue to work with the devolved administrations to ensure workers’ rights continue to operate across the UK. In the following cases, withdrawal from the EU in a ‘no deal’ scenario has impacts on participation in agreed arrangements with the EU which benefit all EU countries:
Employer Insolvency: Currently, UK and EU employees working in the UK are protected under the Employment Rights Acts 1996 and Pension Schemes Act 1993 (or the relevant legislation in Northern Ireland on employment rights and pension schemes) implementing the Insolvency Directive, with procedures in place for making claims in the case of employer insolvency. Similarly, UK employees working in an EU country are protected by the laws of that country that implement the directive.
European Works Councils: Currently EU law allows for workers to request, in certain circumstances, that their employer establishes a European Works Council to provide information and consult with employees on issues affecting employees across two or more European Economic Area states. These rules are set out in the European Works Council Directive (2009/38/EC). The statutory framework that applies to European Works Councils would require a reciprocal agreement from the EU for them to continue to function in their present form within the UK.
In a ‘no deal’ scenario, there are no expected financial implications or impacts for citizens or businesses operating in the UK (whether UK or EU-based) in regard to workplace rights. There are some implications in relation to European Works Councils and the insolvency of some employers, laid out below.
With regards to employer insolvency, in a ‘no deal’ scenario, people living and working in the UK for a UK or EU employer will continue to be protected under the same parts of the Employment Rights Act 1996 and Pension Schemes Act 1993 implementing the Insolvency Directive (or the relevant legislation in Northern Ireland on employment rights and pension schemes).
Employees will still be able to bring forward claims in the same way that they can currently. UK law provides protection for all UK, EU, and non-EU employees working in the UK, provided that certain other criteria are met. This will not change as a result of exiting the EU.
UK and EU employees that work outside the UK in an EU country for a UK employer may still be protected under the national guarantee fund established in that country. However, this may not always be the case, as there are variations in how each EU country has implemented the guarantee required by EU law.
European Works Councils
With regards to European Works Councils, in a ‘no deal’ scenario, the government will ensure the enforcement framework, rights and protections for employees in the UK European Works Councils continue to be available, as far as possible in a ‘no deal’ scenario. There are implications for UK businesses and trade unions with regards to their European Works Council agreements.
UK regulations will be amended so that:
no new requests to set up a European Works Council or Information and Consultation procedure can be made
provisions relevant to the ongoing operation of existing European Works Councils will remain in force
requests for information or to establish European Works Councils or Information and Consultation procedures made before EU exit but not completed by EU exit will be allowed to complete.