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What will Brexit and the Great Repeal Bill mean for Employment Law?

David Gray-Jones Wednesday, May 3, 2017

Given that much of the UK's current employment law is derived from EU legislation, we look at what BREXIT will mean for workers' rights and the employment landscape in general.

Leaving aside the possibility of any more surprises that 2017 (and the forthcoming General Election) may throw at us, Article 50 has been triggered and the UK will, at some point, leave the EU. Given that a good number of the arguments cited for leaving the EU centre around the alleged tangle of bureaucratic rules and regulations imposed from Brussels, it's worth taking a moment to examine to what extent the UK's employment arena is governed by what is essentially European legislation - and what the impact of Brexit might be.

The current position

It's fair to say that a significant amount of the UK's employment legislation derives from the European Union. The ability for workers to move freely between member states for employment has been one of the key principles of the EU, so it makes sense that EU legislation relating to employment rights would seek to ensure the creation of a level playing field for workers across the EU.

While some forms of EU legislation can be directly relied upon by individuals, such as Treaty articles, other forms of EU legislation must be transposed into UK law first. There are also different rules depending on whether the employer is in the public or private sector. However, it's fair to say that most of the workers' rights derived from EU legislation now exist in 'standalone' UK legislation.

The Great Repeal Bill

Following the triggering of Article 50, the EU Treaties will cease to apply in the UK from March 2019 (unless a deal on exit is concluded earlier) and the European Communities Act will be repealed using the mechanism of the Great Repeal Bill. Crucially, though, this does not mean that EU law, whether from EU Treaties themselves, or from UK legislation that implements EU legislation, will cease to be effective in the UK.

The Great Repeal Bill will, in theory, preserve the status quo by converting any EU laws that can be directly relied on by UK citizens into UK law. Not only that, but the bill will preserve any UK legislation that gives effect to EU rights. Alongside the preservation of rights, the bill will also ensure that the UK courts will be able to look to the provisions of EU treaties to interpret the EU-derived rights that are preserved. Historic decisions of the Court of Justice of the European Union will be given the same status in the UK courts as decisions of the Supreme Court.

So far so good - will anything actually change in the employment law arena?

Corrections can be made

Crucially, the Great Repeal Bill will make provision for any legislation that is not functioning correctly to be amended with secondary legislation. In the case of a conflict between existing EU law and future UK laws, the bill also makes it clear that UK law will take precedence.

However, the bill specifically mentions the rights of workers and the fact that these will be preserved, so while it is possible that changes could be made, the chances are that very little will actually change. Those feeling concerned that rights may be eroded following the UK's exit from the EU may also feel reassured by the fact that in many cases, the UK has introduced provisions which go beyond the baseline introduced by EU legislation. Other employment rights are not part of the EU's provision. Minimum wage legislation, unfair dismissal rights and certain holiday and parental leave rights all fall within this category.

The role of EU case law

The preservation of the status of CJEU case law will also be critical in maintaining the status quo with regards to workers' rights post-Brexit. Recent case law regarding the calculation of holiday pay, for example, the recent decision of the Court of Appeal in Lock v British Gas, which relied on ECJ case law on the correct interpretation of the right to paid holiday under the EU Working Time Directive, confirms that our domestic rules must be interpreted to give effect to EU legislation. The practical effect of this in Lock is that holiday pay must be calculated with reference to results-based commission. The law concerning this should not change as a result of Brexit.

Other areas where EU rules will continue to have effect following Brexit will include discrimination laws, codified in 2010 in the Equality Act, and unlikely to change once Britain leaves the EU. The law relating to TUPE will also retain the bulk of the case law derived from the CJEU and the Acquired Rights Directive, from which existing rules relating to business sales and transfers derive. Even the unpopular Agency Workers Regulations which confer the same rights on agency workers as employees after 12 weeks are unlikely to change - certainly not in the short term.

The Practical impact of Brexit

Where businesses are more likely to see an immediate impact of Brexit from an HR point of view will be in relation to changes to immigration policy and rules in relation to EU nationals. At the time of writing, there has been no clear statement made about the rights of EU nationals living and working in the UK following our exit from the EU. While it is hard to envisage a situation where EU nationals working the UK are told, overnight, to pack up and leave, many people may decide to leave the UK of their own accord. Equally, businesses with offices in other EU countries may feel an impact if UK citizens no longer benefit from treaty rights of free movement.

Another cause for concern is that there is simply no way of knowing what trade deal will result from the negotiations and how this will impact on British business. Companies which conduct a great deal of their business within Europe may experience difficulties; equally, businesses that rely on a European supply chain may experience problems. This could all have a knock-on effect on the workforce here in the UK.

Audit your workforce

If you haven't already done so, we suggest carrying out an audit of your workforce to areas that might be affected should immigration policies change following the UK's exit from the EU. Consider business critical roles within the UK and elsewhere in the EU which might be affected. If immigration rules change significantly it may also be worth discussing with EU nationals working for you in the UK, and with UK nationals working for you within the EU, how you can support any applications for permanent residency or dual nationality. We anticipate that there will be a 'grace period' before any new arrangements are introduced, in which to have these discussions.

Review your redundancy policies

Whether as a direct result of the trade negotiations, or simply due to the economic uncertainty of the times we are living in, it might be become necessary to review staffing levels. It would be sensible to check your redundancy policies, if you have them, and make sure that any other workplace consultation procedures are up to date. Even if there are no predicted job losses for your organisation, contingency planning is always worthwhile and will help your organisation deal with any fall out from Brexit as smoothly as possible.

Update and communicate bullying and harassment policies

Finally, make sure bullying and harassment policies are up to date and well communicated throughout your organisation. The upsurge in incidents of racially-motivated harassment following the referendum vote was well reported. Employers should continue to ensure that they take reasonable steps to prevent such behaviour within the workplace.

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