What, if anything, has changed or will change in employment law following the UK’s departure from the EU on 31 January 2020? This is an important question for employers and employees alike.
The UK is now in a transition period (also referred to as the implementation period) until 11pm on 31 December 2020 (unless extended). Until then, for most purposes, the UK will be treated as if it were still a member of the EU. While it will not participate in the political institutions and governance structures of the EU, it must continue to comply with EU law and submit to the continuing jurisdiction of the Court of Justice of the EU (the ECJ). Presently, the UK Prime Minister does not intend to seek an extension to the transition period.
After the transition period
When the transition period ends, the following key changes will occur:
- The UK will no longer be required to transpose new EU law into domestic law.
- However, EU-derived domestic legislation and any directly effective EU law and certain rights and obligations under treaties will be absorbed into UK law, creating a retained body of EU law, and will remain relevant until altered by the UK courts or Parliament.
- The jurisdiction of the ECJ over the UK will cease.
- The existing ECJ case law will remain relevant but may be departed from by the UK Supreme Court or, if Ministers pass regulations to that effect before the end of transition period, by other courts and tribunals, including the Employment Tribunals.
A note on ECJ case law
As the Supreme Court will not be bound by ECJ case law, parties in litigation may challenge the established view of the law arising from controversial EU judgments, such as those relating to the calculation of holiday pay (e.g. where the ECJ ruled that commission should be included in the calculation of holiday pay). It is also worth noting that the EU (Withdrawal Agreement) Act 2020 contains a controversial provision, inserted very late in the process, which allows Ministers to pass regulations that will allow lower courts to depart from ECJ case law after the end of the transition period. Without this new provision, the lower courts would have to wait for Supreme Court rulings before following suit, so if implemented, it is likely to provoke a much faster speed of change.
What does the future of UK employment law look like?
The Employment Bill
The previous and current Governments made commitments to ensure that existing EU-derived workers’ rights will be retained. However, the 2020 Act no longer contains provisions to safeguard workers’ rights that were included in its previous drafts. The current Government has said that it will introduce an Employment Bill before the end of the transition period which will protect those rights, but the details have yet to be published. In any event, as UK Parliament can at any time pass an Act of Parliament that overturns an earlier Act, a new Employment Bill would technically not guarantee these rights any greater entrenched status. The field is therefore open to a UK Government to pass legislation that moves the UK away from the structure of employment law that developed while the UK was a member of the EU.
The Political Declaration
During the transition period, the UK and the EU27 will continue to negotiate their future relationship. While the transition period is governed by the Withdrawal Agreement, the details of the future relationship are contained in the non-binding Political Declaration. The Political Declaration states the future UK-EU agreement should have a “level playing field” clause, which would maintain ‘employment standards at the current high levels provided by the existing common standards’. Interestingly, the UK Prime Minister issued a statement on 3 February 2020 that there was ‘no need for a trade agreement to involve accepting EU rules’, including those on social protection suggesting a level playing field is no longer a UK aim in the negotiations. However, the EU may insist on such protections being included as part of any future trade deal.
Are any employment laws likely to go?
A large proportion of existing UK employment protections originates from domestic, not EU, law. Many of the EU-derived rights have long been part of the employment landscape, and it would be politically challenging to strip these back. While there is scope for the Government to tinker with the existing employment laws in meaningful ways, e.g. by introducing qualifying service requirements for discrimination or whistleblowing claims, capping compensation, re-introducing Employment Tribunal fees, watering down the TUPE Regulations to make them more “business-friendly”, or dismantling technical aspects of the Working Time Regulations, core rights, such as discrimination protection, are unlikely to go.
Timetable of key Brexit milestones (quick reference guide)