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What does Brexit mean for UK Employment Rights?

14 Jun 2017

It feels like a long time ago since the referendum outcome on 23 June 2016. Back then we knew what the vote was all about. We were either going to remain or we were going to leave. We knew what remaining would mean as we had been part of the EU for 40 years and it meant nothing would change. But we didn’t know what leaving would mean, unless it meant £350 million per week to the NHS, which is possibly the only thing we now know it didn’t mean!

 

What can we expect?

The government has remained fairly tightly lipped as to how it will approach Brexit negotiations and what will and will not remain. Nothing further has been added to the government’s tactics during or since the election.

 

Of course we have all read about the migration issue, which many have reported as being the biggest catalyst in the voter’s decision to leave.  

 

It is unlikely that the right to the free movement of workers within the EU shall apply in any post-Brexit UK. The free movement applies not only to EU workers working within the UK UK but also to UK workers working within the EU. This is a point that is often missed in the press and will cause immigration issues to any number of employers trading internationally. If you have workers falling into either of these categories permanently residing in an EU member state then it may be a good idea to make sure that they have registered their residence with the government of state should it be necessary to prove that they have resided in the UK or the EU.

 

In terms of changes to employee rights Theresa May has confirmed that ”existing workers’ legal rights will be guaranteed and will continue to be “guaranteed in law” But it comes with a caveat – “as long as I am Prime Minister”. Given the recent election results, this cannot be taken as any form of guarantee to be relied on.

 

The government have said that they will set about creating a piece of legislation that they have called the ‘the Great Repeal Bill’ which shall convert all the existing EU employment law into domestic law at the date we leave the EU.  That means that all EU employment law will continue to apply.

A lot of our Employment Law in the UK is based upon case law made by European Judges. Any member state can make a referral to the European Court of Justice in Strasbourg and ask them what a piece of European law means and the Judge’s interpretation is then binding on member states.

A good recent example of this in practice can be found in British Gas Trading Ltd v Lock and Another [2016] EWCA Civ 983. Mr Lock, a salesman for British Gas, took them to an employment tribunal and claimed that British Gas owed him money on the basis that his holiday pay did not reflect any commission that he would have earned had he been working. Now it has long been normal practise that you pay holiday pay at the basic rate without any commission. On top of his basic pay, Lock is paid monthly commission, which fluctuated based on his sales. The European Court of Justice (ECJ) ruled that since Mr Lock’s commission is directly linked to the work he carries out, it should be taken into account when calculating holiday pay.

 

As I said earlier, this went against the way we have been calculating holiday pay for years. But that one ECJ judgement means that Mr Locke, and any worker who received commission in the whole of the EU, will now have to be paid commission when they take holiday leave.  

 

Initially it was hoped that all judgements made in the ECJ would not apply. However, the government has said that all the judgements of the European Court of Justice will be given effect in domestic law. So at the date we leave, every piece of EU derived employment law as at that date will continue to apply unless the government or the courts change it.

 

So on the day we finally leave the EU, it is unlikely that anything will change from an Employment rights view. We may see pieces of unpopular decisions disappear in time – such as commission being payable as part of holiday pay. We are also likely to see further reforms take place once we have left the EU. For instance, in 2011 the Beecroft Report suggested the introduction of tribunal fees which were introduced in 2014. However, it also suggested a cap on discrimination claim awards, something that is not possible under European discrimination legislation– this may be something to watch out for!

 

The UK shall need some sort of relationship with Europe post-Brexit. From Article 50 being served we have only 2 years to negotiate the terms of our divorce from Europe. But it is unlikely anything will ever be agreed in those 2 years due to the problems with getting approval from all 27 remaining member states. The UK shall need to negotiate a trade deal, or find a way to access to the single market, and it is likely that Europe will likely make a condition of our relationship them a provision that we maintain minimum European employment rights when we leave, in which case it could be that we just end up mirroring European employment law but without being able to influence them at all.

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