Brexit Threatens To Disrupt UK Employment Laws

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Brexit Threatens To Disrupt UK Employment Laws

In November 2018, the Draft Withdrawal Agreement and Outline Political Declaration agreed between the British government and the European Union (EU) was published. On the 15th of January, 2019 however, with a margin of 432 to 202 votes, the House of Commons voted against this deal. Again the house voted against the deal on 12 March, 2019, with a margin of 391 to 242 votes against the deal. This continued uncertainty prior to Britain’s exit from the European Union (Brexit) creates an unclear future concerning the relationship between both entities.

Even though the negotiations are still ongoing, there are fears in certain quarters about what exactly Brexit means for certain sectors. Studies carried out on the effects of Brexit referendum show a reduction in the Gross Domestic Product (GDP), trade and investment, as well as household loses stemming from increased inflation. It is sufficient to say that the referendum itself is damaging the economy. Economists seem to unanimously believe that Brexit will most likely reduce the United Kingdom (UK)’s real Per Capita Income (PCI) both in the medium and longer term.

In the event that the UK exits the EU without an agreement in place, the UK government has introduced a policy that would avoid the displacement of millions of European Economic Area (EEA) nationals currently living in the UK. This, however, does not allay the fears of those who believe Brexit would mean reduced immigration from EEA countries to the UK. There is a perception amongst Brexit supporters that one of the puproses of the UK’s exit from the EU is to curb the freedom of movement and curb immigration into the UK.

Business owners in the UK are concerned regarding the impact of Brexit uncertainty is having on their businesses. In fact, the British Chambers of Commerce (BCC) have said that a hard Brexit would cause very significant changes to be made to the terms of trade. They also added that despite the impending Brexit, business owners still lacked the information and clarity needed to plan accordingly and move forward.

Employment lawyers are concerned about the implications of Brexit. The Employment Lawyers Association (ELA), which represents about 6,000 employment lawyers in the UK, have expressed concerns that the UK government would not be able to ensure worker’s rights without new legislation to make it clear to all that the UK would continue to be bound by the EU case law. They assert that Brexit is likely to cause confusion across tribunal courts and lead to weaker workers’ right in the UK.

Paul McFarlane is the chair of the ELA’s Legislative and Policy Committee. He noted that the UK’s employment law would likely experience a big upset due to Brexit. While this is a cause of concern for everyone, he believes it worries “workers in particular”. This is based on the rather unclear nature of the relationship between the UK’s employment laws and the Court of Justice of the European Union (CJEU) in the event of Brexit.

CJEU is the collective term for the EU’s court system. It consists of three courts, one of which is the European Court of Justice. While the UK remains an integral part of the EU, the CJEU performs two roles. One, is the arbitration of disputes brought by or against the UK. The other is interpreting European laws by setting precedents which are followed by tribunals and domestic courts when making their decisions.

Examples of these cases are the Enderby v Frenchay case, which set the precedent that the employee in an equal pay claim had to prove there was no genuine material factor other than gender to explain the significant differences in pay between two groups comprising of different genders. Dekker v Stitching case led to the simplification of the legal tests required to satisfy a complaint of pregnancy discrimination.

This coupled with the fact that the CJEU has interpreted directives in favour of workers bringing claims and has created some powerful and important case law in the process. UK courts currently still refer to the case law of the CJEU howeverm without clear directives after Brexit, will no longer be bound by this. Despite this though, the loss of such guidance on areas including but not limited to the application of the working time directive and holiday pay calculations, would have Tribunal Claim’s founder, Tom Street, believes that Brexit could have a “considerable impact on UK employment law”.

Paul Holcroft, associate director at Croner Group Limited, a Human Relations (HR) and employment law consultancy business mirrors Street’s thoughts. He states that, “the interpretation of UK employment law is not an easy task for employers, HR or workers themselves and the guidance previously received from the CJEU has been invaluable”. He adds that dissociating themselves from the CJEU might leave employment tribunals and businesses spending more time trying to understand the application of EU principles to UK laws. He is of the opinion that with the Brexit proceedings, confusion abounds in many quarters and clarity is needed to ensure all parties involved understand the position of UK employment law.

Research published in February showed that the UK’s tribunal service is struggling with its largest backlog of cases since tribunal fees were scrapped in July 2017. With a pending dissociation from the CJEU, one wonders how fast the UK tribunal service can go through this backlog. More importantly, one also wonders how effectively justice would be served in these cases.

The ELA, through McFarlane, also expressed concerns that employment law cases that are not concluded before a successful Brexit would be negatively impacted. To this, he noted that the outcomes that would ultimately come from domestic courts might differ from what the involved parties had anticipated from the CJEU.

In February 2019, UK’s Prime Minister Theresa May proposed the introduction of a draft bill that would guarantee that the rights of UK workers would be in sync with those in Europe. McFarlane has however expressed his doubts at this, as it was “unclear” how practicable this is as a proposition.

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