• Brexit – Key Employment Law Impact following Exit Day

    On December 31st 2020 the transition period shall end and the UK will leave the EU, potentially without a deal.

    Below are some early indicators of how this affect UK employment law, although of course much remains to seen.

    Equality Laws

    The Equality Act 2010 implements the UK’s laws against discrimination and is primary legislation. Therefore, this shall remain in force even if the legislation that incorporates EU law (ECA 1972) is repealed.

    Although the government could potentially repeal the Equality Act after exiting the EU, to do so would be extremely controversial and is therefore we believe unlikely. It is unlikely that employers would wish to argue that they should be free to discriminate. Any changes to the current laws governing direct discrimination, indirect discrimination and harassment also would seem unlikely. Some legal commentators have suggested that, free from EU, a cap could be imposed on discrimination compensation (as is the case for unfair dismissal). Some say that this would dissuade spurious or unmerited claims, but such cases are rare and a blanket cap would appear to be a blunt tool to achieve this aim. Another potential change could be to introduce positive discrimination in favour of under-represented groups in a way that is not currently permissible under EU law. This might be a more popular change to the current regime.


    Equality and Human Rights


    The Charter of Fundamental Rights of the European Union consolidated the fundamental rights and freedoms of individuals: dignity, freedoms, equality, solidarity, citizens’ rights and justice. The EUWA provides that the Charter will specifically no longer be part of domestic law on or after the end of the transition period. However, the Charter is likely to still have an interpretative effect following Brexit. The European Convention on Human Rights (ECHR) sets out the framework for international standards for the protection of human rights of countries that belong to the Council of Europe. The UK ratified the ECHR in 1951 and it was largely incorporated into domestic law by the Human Rights Act 1998.


    The UK’s membership of the ECHR is unaffected by Brexit. The Conservative government has indicated its desire to replace the Human Rights Act 1998 with a “British Bill of Rights.” However, it has pledged to remain a signatory to the ECHR while the process of withdrawing from the EU is underway. A change of administration would of course render such a replacement unlikely as it was a flagship Labour policy which brought about this key Act.


    Family-Friendly Leave and Pay


    Rights to parental and family-related leave in the UK are both EU and domestic in origin. UK maternity leave and pay preceded the EU rights and are more generous than those rights in some respects. The right to shared parental leave and the right to request flexible working are purely domestic in origin. Accordingly, although some critics consider these rights to be a burden on business, there seems little political appetite for their repeal or even for watering them down, so no change in this regard is forecast.


    Transfers of Undertakings (TUPE)


    TUPE has attracted much negative press over the years but the principle that employees in a transferred business, undertaking or outsourced activity transfer with it is often useful for businesses and is incorporated and priced into many commercial outsourcing agreements. Although there may be some businesses that would like to dispense with TUPE, it seems more likely that, following Brexit, the government would make small changes to make TUPE more manageable for employers. For example, the government might choose to make it easier to harmonise terms following a TUPE transfer (which is not permitted under EU law other than where an economic, technical or organisational change has been engaged).


    Working Time


    The right to statutory paid holiday is now deeply entrenched and it would be extremely unpopular with workers and trade unions alike if it was removed or reduced. This right is also now broadly accepted by most employers. For these reasons, a wholesale repeal of the Working Time Regulations 1998 (the EU law regulating holidays) is unlikely. However, there are aspects of the right to paid holiday and other rights under the WTR 1998 that the government may seek to amend once not prevented from doing so by membership of the EU. Various ECJ decisions on holiday pay have been highly problematic for UK businesses, for example the right to keep accruing holiday while on sick leave and the fact that holiday pay should be based on all aspects of remuneration, not just basic pay. Following the UK’s withdrawal from the EU, the government wish to retain a right to paid holiday based on basic pay and with limited rights to accrue and carry it over into new holiday years. The Government may also seek to remove the (48 hours per week over any 17 week period) cap on maximum weekly working hours under the WTR 1998. It is less clear whether there is a demand to limit the rights to other rest breaks or the protections for night workers contained in the WTR 1998.


    Collective Redundancy Consultation


    The minimum time limit for starting collective redundancy consultation where an employer is proposing to dismiss 100 or more employees at one establishment was reduced to 45 days in 2013. The obligation is now not particularly onerous and trade unions are likely to fight any plan to remove or reduce it further it altogether. It is possible that collective consultation could be watered down further or removed, particularly as many employees may not see the right as particularly significant.  Similarly, other collective consultation rights such as works councils and transnational works councils are possible candidates for removal, but the obligations imposed by them on UK businesses are relatively light touch.


    Agency Workers


    The Agency Workers Regulations (AWR 2010) may be seen as a possible candidate for complete removal as they are complex, unpopular with businesses and have not yet become deeply embedded in such a way which may make them difficult to remove. However, following the recommendations of the Good Work Plan (Taylor Review of Modern Work Practices), the Government further committed to strengthen agency workers’ rights under the AWR 2010 with effect from April 2020 by removing the “Swedish derogation” so that all agency workers have the right to pay parity.


    Data Protection


    The Data Protection Act 2018 (DPA 2018) implements the EU’s General Data Protection Regulation ((EU) 2016/679) (GDPR) in the UK. The Data Protection Privacy and Electronic Communications (Amendments etc.) (EU Exit) Regulations 2019 (SI 2019/419) will merge the GDPR and the applied GDPR (which arises under the DPA 2018) into the “UK GDPR” and amend the DPA 2018 and other legislation with the aim of ensuring that the UK legal framework for data protection functions correctly after the end of 2020.

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