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Brexit: Employment Law

Although much of UK employment law derives from the EU, Brexit will have limited implications in the immediate term. The Trade & Co-operation Agreement between the UK and the EU (the "TCA") includes provisions that safeguard the current levels of worker protection (to the extent that they apply across all member states).  In particular, this applies to:

  1. fundamental rights at work;
  2. occupational health and safety standards;
  3. fair working conditions and employment standards;
  4. information and consultation rights at company level; and
  5. restructuring of undertakings.

There are also general commitments to promote and implement:

  • freedom of association and the effective recognition of the right to collective bargaining;
  • social dialogue on labour matters among workers and employers;
  • decent working conditions (including in relation to working hours and maternity leave);
  • health and safety at work; and
  • non discrimination in respect of employment, occupation, and working conditions, including for migrant workers.

Further, the TCA requires the parties to implement and maintain systems for inspecting compliance with regulations relating to working conditions and the protection of workers, and to "ensure that administrative and judicial proceedings are available that allow public authorities and individuals with standing to bring timely actions against violations of the labour law and social standards".  This may well prove difficult for the Government, given the current level of delay and disruption in the Employment Tribunals service. 

Employers should therefore continue to plan on the basis that there is unlikely to be any significant change to employment rights – not least given the Government's recent U-turn on its review of employment rights, but nevertheless watch for developments. The TCA recognises that the parties to the agreement may have autonomy over their policies and priorities, providing they do not weaken or reduce levels of protection in a manner that affects trade or investment between the parties, so there are areas where the UK may choose in the future to diverge from EU employment law in what may perhaps be termed a specific and limited way. We set out below the areas which, despite the U-turn, may yet be affected in the medium to long term.

Discrimination Law

Some commentators have suggested that, free from EU constraints, the UK Government may look to make changes to discrimination laws:

  • Not currently allowed under EU law, a cap could be imposed on discrimination compensation, similar to that for unfair dismissal. Whilst capping discrimination awards is unlikely in the short term it could come back on the table.  However, this may fall foul of the requirement under the TCA for parties to provide for 'appropriate and effective remedies' in relation to the infringement of any labour protections. 
  • The Government could decide to allow positive discrimination in favour of under-represented groups in a way not currently permissible under EU law.
Transfer of Undertakings

Whilst wholesale changes seem unlikely, there is some speculation that the Government will introduce small changes to make TUPE more business friendly. For example, it may choose to modify or repeal the current restrictions on harmonising terms and conditions of employment post-TUPE transfer.  Providing this is done carefully, this may not contravene the provisions of the TCA.

Collective Redundancy Consultation

There may be calls to increase the threshold number of affected employees, so that collective consultation is only triggered for redundancies of 100-plus, for example, rather than 20-plus. Given that consultation periods were reduced in 2013, trade unions are likely to resist fiercely any further change.  Further, the provision in the TCA that requires the parties to the agreement to maintain 'information and consultation rights at company level' at the level in place immediately prior to the end of the transition period may mean that the Government will decide against reviewing this area of law.

Agency Workers

The Agency Workers Regulations 2010 are complex and unpopular with business. Not yet fully embedded, they may be less difficult, politically, to remove and so might be seen as a possible candidate for complete revocation.

So far, however, the Government has not indicated that it will be adopting a deregulatory agenda. On the contrary, following the Taylor review recommendations, it has committed to strengthen agency workers' rights, removing the so-called 'Swedish derogation' so that all agency workers have the right to pay parity.

Holidays, Working Time and Family-Related Rights

The Government initially announced that it would review some of the provisions of the Working Time Regulations, such as whether the opt-out provisions in relation to the 48-hour working week should remain and whether employers needed to maintain records of time worked. Having met with criticism from Labour and the trade unions, the review was dropped. It would appear that any changes are therefore unlikely to happen at any point in the near future, but many commentators think that some areas – in particular in relation to holiday – may need to be looked at in order to clarify what is becoming a confusing area of law. 

Any changes, however, will need to be made with an eye on the general principles set out in the TCA. 


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