Employment law post-Brexit
Andrew Tobey
Posted on 6 Dec 2017

Plus ça change? – Employment law post-Brexit or a gaze into the murky crystal ball

16 months on from the Referendum, and half that period from the triggering of Article 50 – whether you are a Brexiteer, Remainiac or Remoaner, the one thing everyone can agree on is the glacial pace of genuine progress on the negotiations front. Each announcement of a step forward on the core issues (the Irish border; the divorce bill; and citizens' rights) is followed by statements which cast doubt on what is claimed to have been achieved. Behind the posturing, the story may be different with the civil servants at the coal face.

The delay and uncertainty about the shape of any potential future trade deal is extremely unsettling both for UK employers as well as those EU citizens currently working in the UK. To paraphrase Hamlet the Anglophone Dane, 'To stay or not to stay?': for many, that must be the question.

The UK health, hospitality, agricultural, and construction sectors rely on employing vast numbers of EU nationals in order to function on a day-to-day basis. So, what are the Government's plans for EU nationals living and working here at present? Theresa May declared in October that all EU citizens living lawfully in the UK would be able to stay, although the spectre of the future role of the European Court of Justice or ECJ has since returned to dampen the euphoria and cloud the prospects of a final agreement on the issue.

As usual, the devil is in the detail. The precise terms on which EU nationals are able to apply for permanent UK residency cannot be finalised until the reciprocal rights of UK citizens living 'abroad' in the EU have been settled. Whilst EU citizens living here lawfully should be able to fast-track their applications for what is called settled status, the process for achieving this has yet to be finalised, and questions have been raised as to whether it will meet the EU Parliament's requirements.

Although addressing part of the challenge, this begs another fundamental question about EU migrant labour: how to recruit new staff post-Brexit? With no clarity on a final trade deal, this is harder to answer, although it is worth recalling that the much-vaunted World Trade Organisation rules make no provision for Citizens' Rights.

For larger organisations, particularly in financial services, who need to be sorting the relocation of key personnel to new EU-based hubs, there is the knotty issue of contractual mobility clauses. Do these offer employers sufficient formal leverage? What happens if someone just turns around and says 'no thanks – I like working here – a move will mean uprooting my family, interrupting my children's education etc.' How to persuade them? Money could be an incentive, but, organisations may still lose vital team members who simply do not want to make the move.

The Great Repeal Bill (properly known as the 'European Union (Withdrawal) Bill') is designed to convert EU law (as it stands at the UK's 2019 formal exit date) into UK law. This is currently floundering like a beached whale as it passes through the Committee Stage, surrounded by the barbs of harpoon-like amendments of every political hue. With an unfortunate historical echo, the timetable suggests that this phase of the Bill's progress will 'all be over by Christmas' – we shall see.

Post-Brexit, what areas of employment legislation seem ripe for repeal? What legislative surgery will be performed on the Great Repeal Act whale as she finally swims off into virgin Brexit waters, and will this offer employers a welcome degree of certainty?

In my book, the following are likely candidates for amendment or substantial reworking:

  1. Amendment or repeal of the unpopular Agency Workers Regulations.
  2. Amendment to the working hours restrictions in the Working Time Regulations.
  3. Withdrawal of the rights to continued holiday entitlement accruing whilst on sick leave and possible end to the calculation of holiday pay by reference to overtime and commission payments – possibly limiting holiday pay calculation to basic pay only.
  4. A cap on discrimination compensation claims in Tribunal proceedings.
  5. Tweaks to TUPE to allow post-transfer changes to employment contracts to assist with harmonisation of terms.
  6. Changes to collective redundancy consultation requirements.

In short, I don't think we are going to see substantial changes in employment law post-March 2019. No political party is going to set about dismantling wholesale our legal protections against discrimination, family leave entitlements and minimum statutory holiday entitlement. Remember that our legislation providing protection in relation to equal pay and sex/race discrimination pre-dated our EU membership – so we go there first!

Strictly speaking, the writ of the ECJ will cease with effect from the formal Brexit date and it will have no further direct power over our UK Courts. However, when it comes to interpreting EU-derived legislation in future (which will still be imbedded in our laws) the ECJ may well continue to have indirect influence, as its decisions will still be seen as persuasive when interpreting EU-derived legislation. There is also on-going debate around whether the ECJ should continue to play a role in the rights of EU nationals resident in the UK.

Substantial uncertainty persists on all of these issues, and will continue to do so in many areas until a final deal is struck (or not!). Nevertheless, employers should be able to reassure EU nationals within their workforce that their right to remain in the UK will be secure post-Brexit if they choose to stay. Few other crumbs of certainty can be offered at the present time.

If you would like more information on this topic, please contact Andrew Tobey, Partner and Head of the Employment Law team at Michelmores.

This article is for general information only and does not, and is not intended to, amount to legal advice and should not be relied upon as such. If you have any questions relating to your particular circumstances, you should seek independent legal advice.