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How will Brexit affect employment laws?

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After the long-awaited separation of the UK from the European Union, you may be left wondering how employment laws could change and the affect it could have on managing your employees.

From 31 December 2020, the European Court of Justice (ECJ) can no longer determine and bind UK courts and tribunals’ future decisions. This means that any new cases heard by UK courts and tribunals could depart from future ECJ decisions.

Proposed employment law changes

There has been much speculation as to changes that could be made by the current conservative Government. After all, employment laws are heavily impacted by politics.

Discrimination compensation

Conservative MPs have said on a number of occasions that they want to limit compensation in discrimination claims. Currently, the amount of compensation which can be awarded is uncapped. This means that an employee could be seeking career-long losses which could be substantial. This is one of the many reasons employers should have an understanding of discrimination laws and have robust policies in place promoting equality and diversity.

Removal of 48-hour working limit

We could see the removal of the 48-hour limit on the number of hours an employee can legally work in any week under the Working Time Regulations 1998. This could result in employees working longer hours without legal recourse. However, case law suggests that an expectation by an employer that an employee works long hours could be a ‘practice’ which is discriminatory if, for example, an employee is legally disabled1.

Holiday carry forward where employees on long-term sick leave

On the theme of ill health, currently employees who are unable to take annual leave because they are on long-term sickness absence can carry forward any unused holiday. However, they must take annual leave within 18 months of the end of the leave year in which it accrued. This entitlement to carry over could be reduced or removed meaning that employees on sick leave could lose some or all of their annual leave and would be worse off than employees who are not off sick.

Extension of redundancy protection beyond maternity leave

We may (finally) see an extension of the redundancy protections to prevent pregnancy and maternity discrimination for six months after the employee has returned to work after maternity leave. Currently, this protection only applies until the employee returns to work. Employers will need to be careful when conducting redundancy procedures where an employee has recently returned after maternity leave.

Discrimination laws

The Equality Act 2010 (the law prohibiting discrimination in the workplace based on an employee’s age, sex, race, religion or belief, disability, gender reassignment, pregnancy or maternity or marriage or civil partnership) could be amended without regard to EU law. If it is not amended, UK courts and tribunals should continue to interpret the Act in line with EU court decisions and relevant EU directives made before the end of 2020. The EU has, to date, helped defend most of the rights in the Equality Act 2010. The separation from the EU means that the UK will not fully benefit from future developments at EU level.

What affect does the UK/ EU trade agreement have?

However, the EU and UK trade agreement includes a ‘non-regression’ clause. This is an agreement that the UK will not reduce employment law rights, including rights at work, health and safety standards, fair working conditions and employment standards, below the standards that existed on 31 December 2020 but, only if this affects trade or investment. In those circumstances, the EU could apply rebalancing measures (tariffs) if there is a material impact on trade or investment.

There has been a lack of guidance given to Employment Tribunals on what and the extent to which cases should be decided in line with future ECJ decisions. A failure to follow a potentially relevant ECJ decision could mean that the decision is appealable. In the short term, tribunals may act cautiously and follow new ECJ rulings, but we will have to wait and see.

Other employment law considerations

Other key issues to consider include:

  • data protection where your business is transferring data outside of the European Economic Area; and
  • relationships with self-employed contractors in the private sector as the IR35 tax rules are being extended to certain businesses in the private sector from April 2021.

Have you considered how any of these issues may affect your business?

If you would like advice about any of the issues raised in this article or to discuss your businesses’ employment needs, please contact Emily Yeardley, on 01252 730765.

This information is for guidance only and should not be regarded as a substitute for taking full legal advice on specific facts and circumstances.

 1.  United First Partners Research v Carreras (2018) EWCA Civ 323