Impact of Brexit on employment rights – a legal perspective

February 3, 2021

There has been talk of Brexit for years with it having been in the works since 2016. But now that it’s finally happened what does this mean for the UK regarding employment law? The UK- EU Trade and Cooperation Agreement has been put in place meaning the UK no longer is required to follow some of the principles laid down by EU employment law and has the power to make various changes.  

When did these changes occur?

The UK’s official EU leave date was the 31st of January 2020. A 11-month transition period began and during this all EU law still applied. Once this period ended on the 31 December 2020 all existing EU law was then converted into UK domestic law. Parliament can now decide what to keep, repeal and amend. 

However, putting this into effect means that UK domestic legislation that implements EU rights still needs to be converted in conformity with EU law. This means we are therefore likely to still see more Employment Tribunal decisions which look to the EU interpretation, to translate into UK legislation.  

UK workers’ rights 

Currently the immediate impact is likely to be minimal. In terms of the UK-EU Trade and Cooperation Agreement this does not change the rights of UK workers under employment law. The UK no longer must follow the European Court of Justice’s (ECJ) new decisions or implement new EU directives. However, the agreement lays out the ethics which will govern future changes in UK-EU employment law.  

One condition of the trade deal includes a level playing field between the UK and the EU ensuring fair and open competition between the two. This is to prevent employers from undercutting each other through lower and cheaper employment standards, but this is only if this affects trade or investment.  

So, although the UK can diverge from EU employment laws ‘rebalancing measures’ will be applied if the EU has proof that there has been a material impact on trade or investment. Therefore, this means the UK can make small changes to its employment law such adjusting aspects of holiday rules but are restricted from making major changes. For instance, if the UK were to remove working time regulations employers would then be at a competitive advantage in relation to trade, therefore, the EU could then take action. 

UK courts and the ECJ

Numerous areas of UK law such as working time, discrimination law and Transfer of Undertakings (Protection of Employment) Regulations (TUPE) have been affected by decisions of the ECJ. The European Union (Withdrawal) Act 2018 sets out that after the 31st of December 2020, UK courts are now not bound to follow any new judgments coming from that court. The UK Supreme Court must, however, follow ECJ decisions made prior that date as if it would its own case law. However, within that act there is also power for the UK Government to make regulations allowing lower courts and tribunals to deviate from existing EU decisions.  

This is a likely point of dispute in Employment Tribunal matters as courts may favour new decisions where relevant. This could result in scenarios where one side argue that the court should take into account a new decision in the ECJ and the other side argue the opposite. Where this occurs, it is likely that Employment Tribunals will take a cautious approach as a failure to follow a potentially relevant ECJ judgment could make a Judge’s decision appealable. With expectations around new litigation over points that were previously settled, employers should prepare themselves for this. However, it is unlikely that UK Employment Tribunals will be swift to overturn ECJ decisions.  

Keep up to date

Although there will be little immediate changes across employment with the UK now having the possibility to diverge from EU employment law, things can still change so it’s important to stay in the know. 

About the author

Karen Holden is an award-winning solicitor, media commentator, and founder of A City Law Firm. She was one of 100 women invited into the Freedom of the City in 2019, an accolade previously bestowed upon Florence Nightingale and Margaret Thatcher. Karen specialises in advising businesses about scaling-up, starting-up, investments, Brexit, Covid-19 and everything in between 

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