Lawyer Amanda Steadman explains how workers' rights could be affected during and after the Brexit process.
The Article 50 notification was issued to the EU on 29 March 2017. Britain has a two-year window from this date 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 (ie the end of March 2019).
The withdrawal agreement is likely to address a range of issues, including the future status of EU citizens in the UK. It may also set out a framework for Britain's future relationship with the EU. However, the full details of the future relationship will probably be dealt with in a separate agreement. It is not clear whether these negotiations will be conducted in parallel to the exit negotiations, or begin after we have left the EU.
A separate ‘transitional agreement’ may also be needed to govern our relationship with the EU in the period between leaving and any future relationship agreement coming into force.
Changes to employment law after the Article 50 notification is given
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 or agency worker protections;
- we will still have to comply with new EU laws introduced within this period. For example, in the employment sphere, British employers must comply with the General Data Protection Regulation by no later than May 2018; and
- nationals from the European Economic Area (ie the other 27 EU countries plus Iceland, Liechtenstein and Norway) will continue to have the right to live and work in Britain.
It would, of course, remain open to the government to make changes to purely domestic employment laws, such as the right not to be unfairly dismissed.
Changes to employment law after Britain has left the EU
The degree to which employment law could change following Brexit will depend on the nature of our future relationship with the EU.
If we remain members of the single market (like Norway), 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 (like Switzerland), 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 (eg equal pay rights in EU treaty) would automatically cease to apply unless we introduced domestic legislation to save them.
- Primary legislation implementing EU law (eg the Equality Act 2010 and the Trade Union and Labour Relations (Consolidation) Act 1992) would continue to apply as before and could only be repealed or altered by primary legislation. Therefore, these areas of employment law are relatively insulated from Brexit. Any change would have to be deliberate and would take time.
- Secondary legislation implementing EU law and made under the UK's European Communities Act 1972 (ECA 1972) (eg 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 Brexit day in 2019. However, to avoid the overnight deregulation of vast areas of law, the government has said it will convert EU law into British law. In effect, all EU law will be frozen at the point of Brexit. 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.
- Case law: there is a sizeable body of Court of Justice of the European Union (CJEU) case law interpreting EU employment rights, which our domestic courts are currently bound to follow. It is thought that existing CJEU authorities (eg 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.
Employment rights derived from EU law will remain largely in place at the point of Brexit but could, over time, be amended or repealed. Theresa May has suggested that she has no appetite to do so, stating: “Existing workers' legal rights will continue to be guaranteed in law and they will be guaranteed as long as I am prime minister.” This looks like a fairly forceful rejection of any changes to employment law. However, a less favourable business environment over the next few years may yet see the government succumb to lobbying to pare back employment rights.