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How Article 50 and Brexit have affected Employment Law

by Peter Richards — Posted on 24 May, 2017

How employment law may change now Article 50 has been triggered

Few areas of UK law can boast a level of European influence as substantial as employment law. Legislation emanating from the European Union has arguably become the leading source of UK employment law over the last fifteen to twenty years. However, following the recent triggering of Article 50, Britain now has a two-year window to negotiate the terms of its withdrawal from the EU. Unless an extension of time is agreed, Britain will cease to be a member of the EU at the end of this period. The withdrawal agreement will cover many issues, including employment law. It is likely to set out a template for Britain’s future relationship with the EU.

Changes to employment law in the two-year negotiation period

Throughout the two-year exit process, Britain will remain a full member of the EU. This means that:

  • We will continue to be fully bound by EU law, meaning there can be no changes to British employment laws derived from EU law, such as TUPE (Transfer of Undertakings) or agency worker protections
  • We will still have to comply with new EU laws introduced within this period. For example, British employers must comply with the General Data Protection Regulation by no later than May 2018
  • Nationals from the European Economic Area (i.e., the other 27 EU countries plus Iceland, Liechtenstein and Norway) will continue to have the right to live and work in Britain

The government will still be free to make changes to domestic employment legislation, such as the right not to be unfairly dismissed.

Changes to employment law after Britain has left the EU

It is difficult to predict what employment legislation will look like post-Brexit.  If we remain members of the single market, we would remain subject to EU law. If we do not remain members but instead seek a high level of access to the single market, we would have to comply with EU law extending to the single market, including large parts of employment law.

The indications given by the government so far suggest that neither of these models are acceptable. What seems likely is that we will seek a relationship with the EU where we are no longer obliged to comply with EU law.

From an employment law perspective, this means rights that are currently underpinned by EU law would lose their protected status with the following results:

  • EU rights with direct effect (e.g. equal pay rights in EU treaty) would automatically cease to apply unless we introduced domestic legislation to save them.
  • Primary legislation implementing EU law (e.g. the Equality Act 2010) would continue to apply as before and could only be repealed or altered by primary legislation. Therefore, these areas of employment law are relatively immune to Brexit. Any change would have to be deliberate and lengthy.
  • Secondary legislation implementing EU law and made under the UK’s European Communities Act 1972 (ECA 1972) (e.g. Working Time Regulations 1998 and TUPE 2006) would cease to apply when the ECA 1972 is repealed. The ECA 1972 is to be repealed by way of the ‘great repeal bill’, which will take effect on leaving day in 2019. However, to avoid the sudden deregulation of vast areas of law, the government has said it will convert EU law into British law. The logic behind this is to give businesses and workers maximum certainty. Thereafter, parliament would be free to amend or repeal any law it chooses.
  • Court of Justice of the European Union (CJEU) case law interprets EU employment rights. It is thought that existing CJEU authorities (e.g. that holiday pay must be based on normal remuneration) will be adopted into British law under the great repeal bill. However, our courts would no longer be required to follow any future CJEU decisions but could regard them as having persuasive force.

Conclusion

Employment rights derived from EU law will remain largely in place at the point of Brexit but could, over time, be amended or repealed. The Prime Minister Theresa May has suggested that she has no appetite for doing so. However, a less favourable business environment over the next few years may yet see the government’s hand forced and a subsequent scaling back of employment rights.

How Starck Uberoi can help

In uncertain times, it is vital to have the most up-to-date legal advice. Our Employment Law Solicitors have expertise in matters such as redundancy, compromise agreements, constructive dismissal and unfair dismissal.

Our offices are based in Brentford, Ealing, Chiswick, Canterbury and London Victoria. For an appointment at any of our offices, email us at solicitor@starckuberoi.co.uk or call 0208 840 6640.

 

 

About Peter Richards

Peter works closely alongside our solicitor-advocate partner Jonathan Starck providing valuable assistance in the areas of commercial, civil, employment and criminal litigation matters.