Brexit – has it affected employment law?

Article by Karen Holden, CEO of A City Law Firm

BrexitBrexit has been quite the journey and no doubt has brought about challenges for many businesses.

But in terms of employment law, what does post Brexit look like? The UK- EU Trade and Cooperation Agreement means the UK is no longer required to follow some of the principles laid down by EU employment law. Although this gives the UK the power to make various changes it is expected that the immediate impact is likely to be minimal.

When was this implemented?

The UK formally left the EU on 31st of January 2020. At that point a transition period began that ended on 31st December 2020. During this transition time, all EU law continued to apply and once ended all existing EU law was converted into UK domestic law. Parliament can now decide what to keep, repeal and amend.

However, putting this into effect means that UK domestic legislation that implements EU rights still needs to be converted in conformity with EU law. This means we are therefore likely to still see more Employment Tribunal decisions which look to the EU interpretation, to translate into UK legislation.

Have UK workers’ rights changed?

Currently the UK-EU Trade and Cooperation Agreement does not change the rights of UK workers under employment law. The UK no longer must follow the European Court of Justice’s (ECJ) new decisions or implement new EU directives. However, the agreement lays out the ethics which will govern future changes in UK-EU employment law.

In terms of employment one condition of the trade deal includes a level playing field between the UK and the EU ensuring fair and open competition between the two. This is to prevent employers from undercutting each other through lower and cheaper employment standards, but this will only be barred if this affects trade or investment.

So, although the UK can diverge from EU employment laws ‘rebalancing measures’ will be applied following an arbitration process, if the EU has proof that there has been a material impact on trade or investment. In essence this means the UK can make small changes to its employment law such adjusting aspects of holiday rules but are restricted from making major changes. For instance, if the UK were to remove working time regulations employers would then be at a competitive advantage in relation to trade, therefore, the EU could then take action.

ECJ judgements

Numerous areas of UK law such as working time, discrimination law and Transfer of Undertakings (Protection of Employment) Regulations (TUPE) have been affected by decisions of the ECJ. The European Union (Withdrawal) Act 2018 sets out that after the 31st of December 2020, UK courts are now not bound to follow any new judgments coming from that court. The UK Supreme Court must, however, follow ECJ decisions made prior that date as if it would its own case law. However, within that act there is also power for the UK Government to make regulations allowing lower courts and tribunals to deviate from existing EU decisions.

This is a likely point of dispute in Employment Tribunal matters as courts may favour new decisions where relevant. This could result in scenarios where one side argue that the court should take into account a new decision in the ECJ and the other side argue that this should be ignored. Where this happens, it is likely that Employment Tribunals will take a cautious approach as a failure to follow a potentially relevant ECJ judgment could make a Judge’s decision appealable.

Present and Future expectations

Although there will be little immediate changes across employment with the UK now having the possibility to diverge from EU employment law, things can still change so it’s important to keep up to date. Also, with expectations around new litigation over points that were previously settled, employers should prepare themselves for this. However, it is unlikely that UK Employment Tribunals will be swift to overturn ECJ decisions.

About the author

Karen HoldenAward-winning lawyer Karen Holden obtained her degree in Law and went on to achieve a Masters from the University of Cambridge and her LPC from the College of Law.

In 2007 Karen founded A City Law Firm providing highly experienced and dynamic solicitors in the City of London, who think outside the box, whilst delivering at competitive costs.

Prior to establishing the firm, Karen managed a fast-paced UK department within an international London based law firm. She dealt with a vast array of areas within law building up an impressive client base and caseload, including frequently managing mediations, multinational disputes and high-value complex disputes. Karen is still often asked by other law firms to consult on cases outside of their comfort zone.


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