The UK has left the EU and the transition period following Brexit comes to an end on 31 December 2020.
In most cases there will be no change to employment legal rights from 1 January 2021. The rights of UK and EU employees working in the UK will not change from 1 January 2021.
There will be some changes to rules on:
- employer insolvency for UK employees working in the EU; and
- membership of European Works Councils.
Much of UK employment law comes from the EU, including discrimination rights, collective consultation obligations, transfer of undertakings regulations, family leave, working time regulations and duties to agency workers. However, some EU employment law brought into effect employment protections already provided by UK law. For example, UK equal pay, race and disability discrimination laws preceded EU anti-discrimination obligations. Similarly, there was a UK right of return from maternity leave before EU maternity leave rights were implemented. Therefore, it is important to remember in considering what may change after the Brexit transition period ends that many UK workers’ rights were in place before the UK joined the European Community.
Also, when it comes to employment protections, UK law often goes further than EU law. For example, the UK offers a greater statutory annual leave allowance and more generous maternity and paternity leave rights than EU law.
What does this mean in practice? It is unlikely that there will be immediate changes to workers’ rights after the end of the transition period. It will largely remain business as usual, with little need to flex existing workplace practices.
However, as EU imported legislation is reviewed and considered by the UK courts, we could start to see changes and even unintended consequences.
Maintaining the status quo
The government plans to transfer EU case law and regulatory workers’ protections as at the end of the transition period into UK law.
Therefore, most EU-derived employment legislation will remain applicable in the UK immediately after the end of the transition period but on a different constitutional basis, for an indefinite period, unless and until altered by the appropriate UK legislative body.
The government has committed to protecting workers’ rights and to maintaining for example the Equality Act protections, which aim to protect workers from discrimination in the workplace.
Businesses may well like to see changes in areas such as in the need to retain workforce terms of employment after TUPE transfers on mergers and acquisitions or integrations, or workers’ accrual of statutory holiday leave during sickness absence. An Employment Bill in 2020 was announced in the Queen’s’ Speech in December 2019 but no such changes were referenced.
Under post-Brexit arrangements, the Supreme Court and High Court of Justiciary (HCJ) (sitting as a criminal court of appeal) in Scotland are no longer bound by any retained case law, particularly Court of Justice of the European Union (CJEU) decisions that were handed down before the end of the transition period (and after the end of the transition period). As a result of the European Union (Withdrawal) Act 2018 (Relevant Court) (Retained EU Case Law) Regulations 2020, the power to depart from retained EU case law when interpreting retained EU law, has been extended to the Court of Appeal in England and Wales, the Inner House of the Court of Session and the Court of Appeal of Northern Ireland, and other appellate courts (relevant courts).
It is also important to remember that public sector and private companies have been used to different legal regimes when it comes to employment rights around equality: public sector organisations are subject to directly enforced EU rights while the private sector is subject primarily to UK legislative incorporation of those rights.
There are also areas where EU law has not been fully incorporated into UK legislation or regulation. This has led to the ECJ stepping in during its cases to override the UK’s interpretation and secure a new route to compliance.
The Civil Jurisdiction and Judgments (Amendment) (EU Exit) Regulations 2019 (SI 2019/479), which will come into force at the end of the transition period (11pm on 31 December 2020), sets out a number of amendments to legislation on civil judicial cooperation in civil and commercial matters, including rules of jurisdiction and recognition and enforcement of judgments.
After the end of the transition period, the rules governing jurisdiction in all cross-border disputes, including those involving parties domiciled in the EU (or in other states party to the Lugano Convention 2007), will be governed by the domestic law of each UK jurisdiction. In England and Wales, that comprises the common law, together with various statutory provisions. After the end of the transition period, the rules governing recognition and enforcement of foreign judgments in cross-border disputes are generally contained in the common law. Care is needed in respect of exclusive jurisdiction and choice of law clauses and the position may yet be impacted by whether there is a no deal position at the end of the Brexit transition period.
The full picture is unlikely to materialise immediately after Brexit; changes may have a long lead time. The smartest organisations, however, will remain vigilant to early signs of landscape shifts and take proactive steps to prepare, plan and adapt.
For more information on how we can help your business, please contact Carolyn Brown.