Ian Machray explores the potential changes to UK employment law following Brexit.
Although much of our employment law derives from European Union (EU) law, Brexit is unlikely in itself to have an immediate impact on UK employment law. There is a transition period during which the majority of EU law will still apply. Secondly, current employment law will remain in force even once the transition period ends unless and until amended by the appropriate UK legislative body. Nevertheless, whilst the UK government assured not only to “protect” but even to “enhance workers’ rights” once we leave the EU, there is no intention to pursue regulatory alignment. Further, some uncertainties remain, in particular, the degree of deviation from decided cases of the Court of Justice of the European Union (CJEU) once the transition period ends.
Following the UK officially leaving the EU on 31 January 2020, there is a transition period, during which the UK will generally be treated as an existing member state whereby most of EU employment law (including as amended or supplemented) will continue to apply and UK courts and tribunals will need to comply with any pre-existing and new CJEU decisions. Meaning existing legislation and case law will continue to apply until 1 January 2021 at the earliest.
Post Transition Period
No immediate significant changes are expected. The UK government assured in its Political Declaration not only “not to undermine” but even to “enhance workers’ rights” once we have left the EU. Further, as of 1 January 2021, all existing EU employment law (as it stands on 31 December 2020) will be converted into UK law in order to avoid any short-term disruption. It is, therefore, unlikely for our employment law to change radically immediately post- Brexit.
There is some uncertainty in the long-term. Whilst the current government is “committed to protecting and enhancing” workers’ rights, it is also ready to depart from current full alignment with EU employment law once the transition period ends. There have been calls to abolish working time regulations; to introduce a cap on discrimination compensation similar to that of unfair dismissal; and, to remove the ‘red tape’ in relation to protections afforded to fixed-term employees and part-time workers.
Further, UK courts and tribunals will be able to depart from CJEU decisions once the transition period ends. Retained EU case law (CJEU judgments before the end of the transition period) and decisions of UK courts and tribunals which concern retained EU law will remain binding on lower courts and tribunals unless and until they are overturned. Post-Brexit, however, UK courts and tribunals will not refer cases to the CJEU or be obliged to follow any new decisions made by that court. While lower courts and tribunals will be bound by retained EU case law, the Supreme Court will be able to depart from it “if it appears right to do so”. Thus, any controversial CJEU judgements, such as those relating to the calculation of holiday pay whilst on sick leave, could be challenged. Moreover, government ministers will also be able to set out regulations enabling certain UK courts and tribunals to deviate from the retained EU case law. Concerns, therefore, have been raised that this could create substantial and long-lasting uncertainty for UK workplaces and could be detrimental to employers and employees. Uncertain employment laws make it harder for employers to comply and can lead to an increase in litigation and the costs and time associated with it.
The good news for employers and individuals is that for the foreseeable future, no radical changes to employment law are likely, but post-Brexit, some volatility is expected, especially as UK courts or tribunals will be able to deviate from decided cases.
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