With the UK now formally outside of the EU, the potential exists for employment law to be amended. We take a look at the employment aspects of the UK-EU trade and co-operation agreement and how alterations might be received.

During the Brexit transition period, EU law continued to apply in the UK. With the end of the transition period on 31 December 2020, EU law was adopted into UK legislation. Going forward, the trade agreement has limited the UK’s ability to amend employment law, but scope still exists for changes to be made.

EU and UK employment law

Existing EU employment law will continue to apply in the UK and is classed as retained EU legislation.

Many EU directives have already been directly implemented into UK law by the passing of statutes. Case law decided in the European Court of Justice before the end of the transition period on 31 December 2020 will continue to be binding on UK courts in the same way that domestic case law is.

Decisions made after that date will not be binding on UK courts, although they are likely to be persuasive.

UK employment law after Brexit

The UK-EU trade and co-operation agreement signed on 30 December 2020 aims to prevent both the UK and the EU from obtaining a competitive edge over each other. It attempts to impose a level playing field on both parties and states that: ”A Party shall not weaken or reduce, in a manner affecting trade or investment between the Parties, its labour and social levels of protection below the levels in place at the end of the transition period, including by failing to effectively enforce its law and standards…” This is referred to as the non-regression principle and is designed to protect the high standards of employment protection the UK currently has.

The labour and social protection referred to is in the areas of:

  • Fundamental rights at work;
  • Occupational health and safety;
  • Fair working conditions;
  • Standards of employment;
  • Information and consultation rights;
  • Restructuring of undertakings.

The agreement commits to the enforcement of these laws and standards, including in the following ways:

  • Effective labour inspections systems;
  • Administrative and legal proceedings to allow public authorities and individuals to bring actions against labour law or social standards violations;
  • Appropriate and effective remedies, including proportionate and dissuasive sanctions;
  • Interim relief;
  • Respect for the role and standing of partners such as national employer and employee organisations.

There are separate undertakings in respect of road transport whereby both parties must comply with working time regulations, to include rest periods and breaks, for drivers transporting goods between the UK and the UK.

If the UK was allowed to weaken standards, it would clearly give it an unfair competitive edge over member states where workers must receive proper rest and breaks.

If an allegation is made that a standard has slipped, affecting trade or investment, the case will be looked at by a panel of experts (not the European Court of Justice) following a 90-day discussion period. The panel will look at whether the alleged impact is “based on reliable evidence and not merely on conjecture or remote possibility.”

In the event that standards are significantly altered and there is proof that this has caused a competitive advantage in trade or investment, a tariff could potentially be imposed.

The UK has a continued commitment to the European Convention of Human Rights (ECHR), including an obligation to respect fundamental rights and legal principles as reflected in the ECHR.

With regard to workers from the European Economic Area, UK employers should be careful not to reject applications on a wholesale basis because of their origin. This could be classified as indirect discrimination on grounds of nationality.

Scope for the UK to alter EU employment law

The agreement leaves the UK able to change employment law provided that it does not affect trade or investment between the UK and the EU. Minor changes are likely to be acceptable where little overall effect is felt. The line between what is acceptable and what is not is yet to be established.

Enforcement of rights could be an area in which some disagreement arises. Many EU member states have systems of labour inspections in place to ensure that the rights of workers are respected along with the possibility of obtaining interim relief in the event of an employment dispute.

The UK does not have these checks in place and it is possible that in the future an enforcement body could be created to oversee employee rights. This has already been considered and a consultation undertaken.

Where the EU introduces new laws, the UK will need to ensure that its own situation is balanced, so that trade and investment are not affected by EU law and standards alone. This could mean that the UK will have to implement similar laws to prevent imbalance.

The first two laws likely to be tested in this way are the Whistleblowing Directive, due to be implemented by the EU by December 2021 and the Work-Life Balance and Transparent and Predictable Working Conditions Directives, due to be implemented by August 2022. UK law already covers many of the proposed areas included in these directives, but in the event that it does not implement similar law and the result is an imbalance between the UK and EU, rebalancing measures such as tariffs could be implemented.

Case law arising from the European Court of Justice after 31 December 2020 will not be binding on UK courts but is likely to be persuasive. Decisions made prior to 31 December 2020 and retained in UK law may be deviated from in the same way as domestic decisions, that is, when it is right to do so.

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If you would like to speak to our expert employment solicitor Nighat Sahi, please telephone us on 020 3146 2989, email us at nighat@rswlawltd.co.uk or fill in our contact form.

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