Is substantial change coming to employment law? I rather doubt it…

Is substantial change coming to employment law? I rather doubt it…

by Liam Kerr
article from Friday 12, June, 2020

SINCE THE UK voted to leave the EU in 2016, a running question, whether borne of fear or celebration depending on one’s point of view, has been that Brexit could lead to substantial deregulation when it comes to employment law.

It is my view that the answer is that the UK’s withdrawal from the EU will not see substantive changes to employment law in the UK, either during the Transition Period or beyond, regardless of the outcome of the current negotiations.

Membership of the EU mandates various minimum protections for labour and is the source of many UK employment rights. In practice and by way of example, employees of European Union member states are afforded (non-exhaustively) certain “family-friendly” rights, rights to time off and rights around discrimination and larger redundancies, which the UK Government of the day then implements through its domestic legislation. 

Without the EU imposing such baselines, would the UK take an opportunity to “wind out” of these protections? I doubt it for several reasons.

Firstly, the logistics of doing so, particularly in the context of all the other legislative actions resulting from Brexit, will be anything but straightforward. There are over forty years-worth of UK employment laws deriving from EU-derived protections and disentangling that inter-relationship would be complicated, time-consuming and expensive. Consequently, any arguments around savings-to-business would be unlikely to be realised for some considerable time, for example due to impacts on employment contracts, contract variation processes and the like.

In any event, whilst many of the UK’s current employment laws can be said to derive from EU law, many underlying protections (notably on certain protected characteristics, discrimination and equal pay) pre-date the EU’s legislating. Furthermore, UK unfair dismissal legislation is an entirely domestic affair as are individual redundancy rights and protected disclosures, for example. The same might be said for other wider employment rights which do not owe their genesis to the EU: pensions auto-enrolment, the current national living wage, the Modern Slavery Act or the apprenticeship levy.

Secondly, the UK Government has given several indications that it does not intend to pursue such a course of action. In July 2018, in ‘The Future Relationship between the United Kingdom and the European Union’ the UK Government states that existing workers’ rights enjoyed under EU law will continue to be available under UK law on the day of withdrawal. It points out that the UK already exceeds EU minimum employment standards in several areas and leads in many others; and requests that the UK and the EU commit to non-regression of labour standards. Two months later, the UK Government issued a technical notice: “Workplace rights if there’s no Brexit deal” in which it was stated that there will be minimal changes to UK employment regulation derived from EU law (the “minimal” being specifically to reflect the non-EU status of the UK post exit). The UK Government has also prepared the necessary legislation to ensure that workers’ rights will be maintained upon leaving the EU and at the end of the transition period.

On a practical level, even were such changes proposed, it is unlikely that UK employers would welcome major deregulation. Business does not typically welcome change and uncertainty. Often the main beneficiaries of employment law changes can seem to be the lawyers (and I declare my interest at this point!), due to the uncertainty and cost of new compliance, and mistakes in compliance leading to litigation. Furthermore, much employment law has become embedded in business-thinking, such that it is regarded as good practice by all, such that by way of example, one could easily imagine the electoral challenges faced by a Government that sought to wind back family leave rights, protection against discrimination or holiday rights.

Finally, and perhaps most telling, much EU employment law has been welcomed by the UK and far from being seen as too restrictive, is taken as a base point which allows the UK to “Gold Plate” it. In brief, this means that the EU sets out its general principles in a Directive which the Member State has flexibility to put in place through Regulations. The UK then decides, in putting the principles in place if it wishes to go beyond the minimum necessary to comply and “Gold Plate” the principle. Examples of this happening abound:

  • Working Time: the EU Directive requires employers to give 20 days of annual leave, the UK’s Working Time Regulations give 28;
  • Maternity Leave: the EU requires its member states to offer maternity leave of 14 weeks. The UK offers up to 52 weeks’ such leave, 39 of which is paid. The UK also offers parental leave to both parents of children up to 18; the EU sets the maximum age for parental leave at 8.
  • Retirement ages – the European Court of Justice says a national compulsory retirement age can be justified; the UK abolished compulsory retirement ages for most jobs in 2010.
  • TUPE, which protects the rights of employees when one business is transferred to another contains provisions relating to “service provision changes” (in-sourcing and out-sourcing) which go far beyond the mandatory protections of the “parent” Acquired Rights Directive. Interestingly, following a consultation on repealing the “extra” protection in 2013, the decision was taken not to do so.

 

In short, whilst Brexit makes deregulation of employment rights possible, I do not believe it makes such changes likely. Certainly, it is difficult to see anything of significance happening in the short to medium term.

Liam Kerr is Shadow Cabinet Secretary for Justice and a North East MSP for the Scottish Conservative and Unionist Party.

 

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