2021 marks the start of a new era for the UK, the Brexit transition period having ended at 11pm on 31 December 2020. After endless rounds of negotiation, the parties reached a last-minute agreement over the ongoing relationship between the UK and EU, and the European Union (Future Relationship) Act 2020 (which gives legal effect in the UK to the agreements reached) received royal assent on 30 December 2020. But what impact does this have on UK employment rights derived from the EU?
The short answer is that while Brexit provides the UK with some freedom to deviate from EU derived employment law, we should not expect to see any radical changes to UK employment laws or employment rights.
The Trade and Cooperation Agreement reached between the UK and EU incorporates level playing field commitments that seek to prevent either the UK or the EU gaining a competitive advantage in a variety of contexts. These include rights at work, namely fair working conditions, employment standards (including in respect of workplace health and safety), information and consultation rights and the restructuring of undertakings. The commitments given by both the UK and EU are intended to ensure that neither will weaken or reduce labour or social rights and standards below the levels in place at the end of the transition period where this affects trade or investment between the UK and EU, including by way of a failure to enforce those laws and standards.
Although this agreement does not prohibit the UK making changes to employment laws and standards, these are permitted only insofar as the change does not affect trade or investment between the parties. Time will tell what this means in practice, although the agreement suggests the impact should be tangible and based on reliable evidence, rather than being speculative. Inevitably, this trigger will not always be met, providing some scope for this or a future government to tweak employment legislation as and when it sees fit.
Further, both the Supreme Court and Court of Appeal have powers to deviate from EU derived case law, although it will, of course, take some time for any relevant cases to reach those appellate courts. As such, unless and until the government amends legislation to address issues arising from case law, decisions based on EU derived employment case law will remain a feature of UK law for the time being.
The government has not indicated any intention to drive forward changes to UK employment law in light of the freedoms arising from Brexit. Indeed, the UK has a strong track record of high employment standards, often having 'gold-plated' the minimum standards required of it by the EU, and the Employment Bill (announced as part of the Queen's speech in December 2019) committed to strengthening workers' rights. That is not to say we cannot expect to see changes to certain aspects of EU employment law over time through case law developments and legislative change. However, any changes are unlikely to be imminent and any amendments to legislation will depend on the government and political landscape at the time, with trade unions and worker organisations certainly likely to challenge any proposed changes that are to the detriment of workers.
Originally Published by Reed Smith, January 2021
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