On Christmas Eve 2020, it was announced that a free trade deal between the UK and EU had finally been agreed. At over 1,200 pages, the agreement detailed the terms of the deal between the parties, and the mechanisms for resolving disputes.

Under the agreement, the UK now has the right to set out its own policies and priorities in relation to ‘labour and social standards’. This includes the protections provided under UK law in connection with rights at work; occupational health and safety standards; fair working conditions and employment standards; information and consultation rights at company level; and the restructuring of undertakings.

In January 2021, Business Secretary, Kwasi Kwarteng, confirmed the Government’s ongoing review of UK labour law following the UK’s departure from the European Union. According to the Chartered Institute of Personnel and Development [CIPD], the Government’s agreement not to reduce existing levels of social protection means that we are unlikely to see any drastic changes in the near future. However, there are some areas of employment law that have the potential to evolve as a result of Brexit.

 The European Court of Justice
One of the most significant impacts is that the UK will no longer be able to refer employment cases to the European Court of Justice [ECJ], which previously provided guidance to UK courts and tribunals on applying EU law.

The UK is now not required to follow ECJ decisions, leaving employment tribunals in dispute as to whether they should conform with or reject future European judgments. Domestic jurisprudence is also likely to evolve over time as the UK courts determine cases without input from the ECJ.

Employment Tribunals may also face increased pressure from litigants seeking to challenge long-standing principles of employment law in light of the fact that UK law is now free to develop unfettered by European decision makers.

Equality
Anti-discrimination provisions were established by the EU prior to the UK becoming a member state and were adopted when the UK joined the EU.  Although it is unlikely there will be a change in these provisions, we may see a cap introduced in regards to how much a claimant receives.

Prior to the ECJ’s decision to remove discrimination compensation caps, the UK had limits on the amount of compensation awarded for any form of discrimination. Following the withdrawal of the ECJ’s authority over such tribunals, the removal of limitations is no longer protected, which could result in employees seeing a shift in how much they may receive.

Holiday pay and working hours
Prior to William v British Airways in 2011, UK law provided that holiday pay should only include an employee’s basic, contracted salary. The decision from this case led to a series of reviews into how holiday pay should be calculated to take into consideration other payment streams, such as commission and overtime.

Potentially, there could be reversion back to the previously accepted terms, meaning fair paid holidays could be at risk, especially for those who are on low-hour contracts, but regularly partake in overtime to boost their salary.

Another potential change could be relaxing the work time directive. Currently, the maximum working hours stands at 48 hours a week, and this was introduced to ensure the workforce did not become over-worked. If this cap were removed, it could put many workers at risk of working excessive hours.

Agency workers’ rights
The directives enforced by the EU provide equal rights for agency workers in cohesion with full-time and permanent employees in the UK.  With disagreement within the Government regarding the UK’s participation in the Social Chapter, protections could be lifted, putting those on weaker terms of employment in a vulnerable position.

Those conducting freelance work could find themselves at a disadvantage. The ability to move capital freely across the EU and the opportunity to work for international clients may become increasingly difficult, especially in regards to navigating employment agreements.

The Transfer of Undertakings Regulations 2006
The Transfer of Undertakings (protection of employment) Regulations 2006 (TUPE), is an EU-based right and some businesses have campaigned for its abolition in the UK.

TUPE supports employees in the event of business transfers, protecting them against dismissal with an automatic transfer principle. With some businesses arguing that the TUPE provisions are excessive due diligence, it is possible that these regulations could be removed in the near future.

Conclusion
Change as a result of Brexit is inevitable. However, the UK is currently in a state of uncertainty over how drastic these alterations may be. Workers have derived many benefits from EU legislation, and it would be very unpopular for the Government to revoke them without good cause, but this does not rule out the possibility of the UK setting out its own labour and social standards.

Employers should keep up to date with changes to domestic legislation as developments in UK law are now free from EU scrutiny.