While deadlines and departure dates remain unknown, the UK needs to prepare itself for substantial changes within its legal system when we eventually part ways with the European union. Here, Richard Thomas, employment lawyer and partner at Cardiff and London based firm, Capital Law, shines a light on areas of EU law that might not make it through to the other side of Brexit.
General Employment Law
There have been mixed signals from the Government about potential changes to employment laws following our departure from the EU.
Theresa May (who campaigned to remain in the referendum) has maintained that there won’t be any substantial changes to current laws. But, it’s been widely reported that other cabinet ministers – like Michael Gove and Boris Johnson (who both campaigned to leave) – are more inclined to be ‘flexible’ about potential changes to UK employment law.
The TUC is certainly anxious about any dilution of workers’ rights after Brexit. The changes might include the following.
Transfer of Undertakings (Protection of Employment) (TUPE)
TUPE currently implements the EU Acquired Rights Directive – which protects workers’ rights if the business they work in is sold to another one. TUPE will likely remain as part of the accepted employment protection.
But, it might be tweaked.
Currently, restrictions on harmonising terms and conditions post-transfer apply and can’t be lifted, because of EU law. But when we leave the EU, changes to terms and conditions might be allowed after a period of time after the TUPE transfer.
Working Time
Most Working Time Regulations will remain, and it’s likely that the right to 28 days’ paid holiday leave – and rest breaks – will stay. But, holiday pay calculations (including commission and overtime) might be reviewed and could revert to basic salary being paid as holiday pay.
The maximum average 48 hour working week might also be abolished, along with ‘inactive on-call time’. And, the accrual of annual leave during long term sickness will probably be reviewed, too.
Protection of Worker Rights (Discrimination)
The EU Equal Treatment Framework Directive (2006) was implemented in UK under the 2010 Equality Act.
Some ‘protected characteristics’ – like race, sex, marital status, and disability – are protected under UK legislation. But, many of the more recent protected characteristics – like age, sexual orientation, and religion and belief – are derived from EU law.
Changes to the existing regime of direct/indirect discrimination, harassment, or victimisation because of a protected characteristic seem unlikely. But, there is a call for discrimination compensation to be capped to a maximum of one year’s salary, in the same way as unfair dismissal is. This is incompatible with EU law – but could change after Brexit.
Free Movement of Labour
Once we’re no longer in the EU, the UK could impose new controls for future EU travellers to the UK – and EU countries might do the same for UK citizens.
Last September, a Home Office document provided fresh insight into how Theresa May’s Government will redeem the referendum promise to ‘take back control’ of EU immigration. It points to:
- Phased withdrawal – the UK’s immigration policy will be transformed in three stages. An immigration bill will be introduced before Brexit, followed by an implementation period of ‘at least two years’. The final phase will put tough new rules in place.
- Britain first – the language points to a much more UK-focused immigration policy. It could insist that EU citizens undergo the same immigration system that non-EU citizens currently do.
- Free movement during phase two and biometric identification – the Government ‘will end free movement in its current form’. During the implementation phase, people who want to live in the UK will have to provide proof of citizenship either with a passport or a ‘Home Office biometric immigration document’.
- Permits for most workers may only last two years – only those with real expertise will be able stay in the UK for longer than two years.
- Income requirements for some EU nationals – the UK might introduce an income threshold. A Points Based Visa system would only issue visas to workers performing a sufficiently skilled role, at a minimum salary, to avoid employers undercutting the salaries of UK workers.
- British workers prioritised – some of the proposals being considered will force UK employers to think twice before employing someone from the EU. This could make it difficult for the UK to access the talented workers we need to fill a substantial skills gap (including low-skilled work, which many employers rely on EU workers for).
The practical reality of negotiating with other EU countries could also be challenging. Other countries that aren’t in the EU, but that have the benefit of free trade with it – like Norway – have had to agree to free movement of workers as a condition of the trade advantages.
Temporary Agency Workers Directive
At the moment, the Agency Workers Regulations implements the EU Temporary Agency Workers Directive. Under this, agency workers are entitled to the same rate of pay and basic working conditions once they’ve been on the same assignment for 12 weeks.
It’s likely that this will be repealed entirely. Trade Unions are ambivalent about this; very few temporary workers join unions, so they don’t have members’ interests to protect.
Climate change
The Government’s position on climate change isn’t currently on the Brexit negotiating table. But, while it does pose threats, it also creates an opportunity to make the UK a climate champion.
The UK will need to individually ratify the Paris Agreement and produce an individual Nationally Determined Contribution (NDC). A hard Brexit will mean exiting the European Union Emissions Trading System (EU-ETS) – the oldest emissions trading scheme and the primary tool to reduce carbon.
The EU-ETS has helped the UK meet emissions targets and allowed London to become a financial hub – the largest EU-ETS exchange market for climate-related financial services.
Leaving would mean adjusting the carbon budget under the Climate Change Act 2008. So, meeting the UK’s emissions target could be negatively affected.
UK financial regulatory framework
The Government has said that Britain will develop its own distinct regulatory framework.
Financial regulation derived from EU legislation will be applicable until the Government makes changes. Any changes to domestic financial regulation will depend on the future relationship with the EU.
The UK has higher regulatory standards than some EU regulations, like the Retail Distribution Review and the Bank of England stress tests. But, lots of finance/banking rules are set by global regulators, so these wouldn’t be affected.
If the UK intends to conduct business with the EU, it’ll need to comply with EU financial regulation. If we remain in the European Economic Area, passporting rights could be preserved – though this would mean adopting EU regulations, without the power to influence damaging ones.
Human rights legislation
The Charter of Fundamental Rights of the EU currently protects human rights of everyone living in the EU. The Government has said that the charter will no longer have effect in the UK after Brexit.
The UK will still be subject to the European Convention on Human Rights when it leaves the EU, as these are protected by the Human Rights Act 1998.
