Brexit: Employment Law

The UK left the EU on 31 January 2020. A transition period, during which EU laws continue to apply in the UK, is due to end on 31 December 2020. The UK/EU Withdrawal Agreement sets out transitional arrangements and negotiations for the future UK/EU relationship are ongoing.

Although much of UK employment law derives from the EU, Brexit will have limited implications in the immediate term. Employers should continue to plan on the basis that there is unlikely to be any significant change to employment rights after the end of the transition period, but nevertheless watch for developments. There are areas where the UK may choose in the future to diverge from EU employment law.

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.
  • 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.

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.

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

Some commentators have suggested that the Government may look to make changes to employment rights:

  • It may choose to reverse the current entitlement of workers on long-term sick or maternity leave to carry-over unused holiday entitlement to another leave year.
  • Given its unpopularity with UK businesses, it might seek to exclude payments such as commission and overtime from holiday pay calculation.
  • Whilst the UK has its well-known opt-out provisions in relation to the 48-hour working week, the Government might be keen to remove this limit, as well as the requirement to record working time, altogether.
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