In the firing line: How does employment law look post-Brexit?

Big Ben didn’t bong, but on Friday 31 January 2020 at 11pm, the UK left the EU.

While life has not changed noticeably since then, mostly due to the 11-month transition period under the European Union (Withdrawal Agreement) Bill 2019-20 (due to end on 31 December 2020), many people may be wondering what comes next in a fully Brexit-ed UK.

Employers in particular will be wondering what changes may be in store for employment law, given that much of the UK’s employment law stems from the EU. Examples of this include discrimination law, the regulations governing the Transfer of Undertakings (otherwise known as TUPE), collective consultation obligations, family leave, working time and agency workers’ rights, to name a few.

The short answer to this is that nothing critical has happened... yet. Indeed, no monumental change will occur until after the transition period. After this date, EU laws will remain in force until altered by the relevant UK legislative body.

With this in mind, what changes can employers expect beyond 31 December 2020?

No guaranteed protection of existing workers’ rights

The original draft of the Withdrawal Agreement in early 2019 contained clauses which guaranteed the protection of all EU derived workers’ rights, commonly referred to as “non-regression” clauses. These were noticeably missing from the draft which ultimately gained parliamentary assent, meaning that, after the transition period, the UK is not bound to maintain at least the minimum standards of right set out by EU law.

In place of these “non-regression” clauses, the government announced that it would be including clauses on protecting and enhancing workers’ rights in a forthcoming Employment Bill, which was announced in the annual Queen’s Speech. However, as yet there is no indication of what this Bill may look like or when it will be introduced.

Changes to discrimination law

The Equality Act 2010 is derived from EU legislation and, after the transition period, the UK government, in theory, will have the power to repeal this act in its entirety. This is of course extremely unlikely and we don’t consider that this will be the case, not least because of the extreme backlash there would likely be from business and employees alike.

What is more likely is that the government could place a cap on the amount of compensation that can be awarded in discrimination claims at an Employment Tribunal. The current uncapped compensation payments resulting from discrimination claims are viewed as onerous on employers. Therefore, a government with a pro-business agenda may see this as a way to ease the potential liability that employers face from a successful discrimination claim.

Transfer of Undertakings (TUPE)

The Transfer of Undertakings Regulations (Protection of Employment) Regulations 2006 (SI 2006/246) (“TUPE”) also stem from EU law. This is the legislation that protects the rights of employees in the event of a business transfer or service provision change. These regulations are difficult to navigate for employers and., as a result, many employers would be happy for these to be done away with. In practice, however, the regulations can be beneficial to businesses as they provide them with an experienced and established workforce that has knowledge of running the business or service.

It is, however, possible that changes could be implemented to make TUPE friendlier to businesses and employers. In particular, an area that could see change is the power given to employers to harmonise terms and conditions following a transfer of business.

Agency worker rights

Agency workers’ rights in the UK stem from EU legislation in the form of the Agency Workers Regulations 2010 (SI 2010/93). These regulations are seen by employers as being opaque and difficult to navigate, and with the freedom of de-regulation, the government may have this on its agenda for reform. Unlike equalities legislation, the rights conferred to agency workers may not be seen as a high profile change and therefore may be more easily, and quietly, removed. 

Immigration

Our detailed update on immigration post-Brexit contains the main points to note in relation to the immigration landscape after the transition period. It is, however, important to note the following updates:

  • It has been announced that the minimum salary level for Tier 2 skilled workers visas will be reduced from £30,000 to £25,600.
  • From January 2021, the Government will introduce a points-based system similar to that of Australia. The system intends to introduce fairness to the immigration system by prioritising the skills and offerings of applicants, rather than their home nationality.
How likely are these changes?

Theoretically, Brexit provides the UK government with more control over employment law, but practically, the law will largely be dictated by the EU and the rest of the world. To trade freely and competitively with countries who have developed employee rights, the UK will need to retain certain protections and maintain an acceptable standard. The EU in particular will be very slow to deal with a trading partner which has anti-competitive practices in place. In fact, we understand that they have made it clear that they will not trade in those circumstances.

Any change in law after Brexit will be the result of social or political influence rather than a legal one. A government with a strong deregulatory attitude will seek to revoke certain areas of law that are seen to be a thorn in the side of businesses. Without a crystal ball, however, we cannot accurately predict what path any future legal development in the world of employment law will take.

To date, the only credible insight into the minds of those in control of employment law moving forward, comes from the non-binding Political Declaration negotiated between the current UK government and the EU which states the intention to maintain “employment standards at the current high levels provided by the existing common standards.”

Will this be the case? The only certainty is that, for good or ill, the buck rests with us - not Brussels. 

Further information

For more information about any of the above or for specific advice, please call 0141 303 1100 and ask to speak to a member of our specialist Employment team.

Please note: The foregoing comments are speculative only and do not form the basis of what will be the case in future.

This article was co-written by Kirsty Fryer.

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