Briefing

Brexit: what are the implications for employment law?

Posted by: David Hunt | Date posted : 18/10/2016

We now at least know that the Government plans to trigger Article 50 by the end of March 2017, which might result in the UK leaving the EU by the spring of 2019.  However, significant questions still remain, including questions relating to the future of those UK employment rights currently guaranteed by EU law.

Parliament released a helpful briefing paper entitled "Brexit: employment law" on 12 October, which neatly sets out what would happen in the normal course to legislation guaranteed by EU law in the event of Brexit. Subject to the provisions of the EU withdrawal or any subsequent trade agreement, the paper summarises the position as follows:

(i) any primary legislation (such as, for example, the Equality Act 2010) would remain in place and could only be altered going forward by other primary legislation;

(ii) any EU derived rights set out in secondary legislation implemented or partly implemented under powers contained in the European Communities Act 1972 would fall away or partly fall away and any rights remaining within secondary legislation implemented under other primary legislation could still be revoked by new secondary legislation;

(iii) EU rights which currently have direct effect would automatically cease to apply.

In light of (ii) and (iii) above and in order to provide as much certainty around Brexit to both businesses and workers as possible, the Government intends to introduce a "Great Repeal Bill" which will repeal the European Communities Act 1972 but, at the same time, transpose existing EU laws into UK law (please see our separate article here).  In doing so, the Bill would effectively "save" any rights within categories (ii) and (iii) above from otherwise being lost.   It is, however, less clear whether the Bill will also protect those rights derived from the European Court of Justice's interpretation of EU laws (i.e from European case law).   This is certainly believed to be possible and would clearly make things far more straightforward.

The proposed Bill would, temporarily at least, therefore ensure that the status quo is maintained post Brexit and would allow the Government to then review and unpick any unwanted EU laws on a less immediate and more considered basis.   This though begs the question as to how far any unpicking will go in various areas, including employment law.  

The extent of any subsequent unpicking will depend, at least to some extent, on the provisions of our withdrawal and/or any new trade agreement entered into.   There will also clearly be some areas of regulation higher up to the Government's "to-do" (or perhaps more accurately "to-do away with") list than others.   Indeed, if the noises coming out of Government to date are to be believed, it seems that employment laws and regulation will not be as high up any "to-do away with list" as some commentators had originally thought.

For example, both Theresa May and David Davis have been very keen to emphasise that workers' rights will be protected.   In July of this year, David Davis said that:

"All the empirical studies show that it is not employment regulation that stultifies growth, but all of the other market-related regulations, many of them wholly unnecessary.   Britain has a relatively flexible workforce, and so long as the employment law environment stays reasonably stable it should not be a problem for business ……. The great British industrial working classes voted overwhelmingly for Brexit.   I am not at all attracted by the idea of rewarding them by cutting their rights.   This is in any event unnecessary and we can significantly improve our growth rate by stopping the flood of unnecessary market and product regulation."

At the Conservative Party conference at the beginning of October, Mr Davis then repeated this message saying that:

To those who are trying to frighten British workers, saying 'When we leave, employment rights will be eroded’, I say firmly and unequivocally 'no they won’t’."

Theresa May then issued a similar message in her own key note Brexit speech saying:

"Existing workers' legal rights will continue to be guaranteed in law – and they will be guaranteed as long as I am Prime Minister.   We're going to see workers' rights not eroded, and not just protected, but enhanced under this Government."

Moving forward and certainly in the case of "hard" Brexit, the Government will have the ability to amend and/or repeal legislation, whether based on previous EU law or not.  It also seems clear that there will be changes to existing employment laws if, for example, Matthew Taylor's appointment to conduct a review of modern employment practices is anything to go by (Mr Taylor was previously head of the Number 10 Policy Unit between 2003 and 2006 and has been tasked to look at six key themes as part of his review, namely: (a) security, pay and rights; (b) progression and training; (c) the balance of rights and responsibilities for new business models; (d) representation; (e) under-represented groups; and (f) new business models).   However, as referenced above, all of the quotes coming out of Government to date appear to indicate that any changes will not be with a view to deregulation and it appears may instead be aimed at ensuring existing employment protections remain in place but in a form fit for the modern workplace.  

All of the above said and despite the assurances from Government, we would still not bet against a number of employment EU based laws, and in particular those the Government previously opposed (such as, for example, the Agency Worker Regulations and working time limits) biting the dust.   Indeed, if we were forced to place a bet, we would bet on the aforementioned Agency Worker Regulations going first...

If you require further information on anything covered in this briefing please contact David Hunt (david.hunt@farrer.co.uk; or 020 3375 7214) or your usual contact at the firm on 020 3375 7000. Further information can also be found on the Focus on Brexit page on our website

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, October 2016