Brexit – effect on employment law in the UK

27 January 2021 / Insight posted in Articles

The Withdrawal Agreement

The UK has agreed to non-regression and rebalancing provisions in relation to employment law as part of its trade agreement with the EU.

The UK can change EU laws that were in place prior to 31 December 2020 as long as the changes do not regress EU employment protections below those which existed on 31 December 2020.

Northern Ireland is still obliged to abide by a number of EU Equal Treatment Directives which existed before 31 December 2020 and to interpret them in line with ECJ decisions.

The UK and the EU must maintain a system for effective enforcement of employment laws, including labour inspections, court action and remedies.

The employment law implications

The UK does not have to stay in alignment with new employment laws implemented by the EU after 31 December 2020.  However, if the UK diverges from the EU in such a way that causes a provable competitive advantage for the UK, the EU can take rebalancing measures, including introducing tariffs.  This will be subject to an arbitration process.

It is impossible to predict what will happen with certainty, but in practice it seems likely that the UK will not be making any major changes to UK employment law soon:

  • Many of the key employment laws the public are aware of such as unfair dismissal, breach of contract, the National Minimum Wage and National Living Wages, equal pay and many of the changes introduced and expected as a result of the Good Work Plan are UK creations;
  • The UK has given employees more generous rights that it was required to do in a number of areas, for example:
    • The UK gives employees the right to 28 days’ paid annual leave instead of the EU mandated 4 weeks, which be inclusive of or additional to statutory and bank holidays;
    • The UK abolished its compulsory retirement age even though the European Court of Justice ruled that a compulsory retirement age could be justified;
    • The UK offers up to 52 weeks maternity and other types of parental leave (39 paid) compared to the EU minimum requirement of 14 weeks;
    • The UK gives parents the right to take parental leave for children under the age of 18, whereas the EU maximum age is 8;
  • The requirement in the Trade Agreement to have effective enforcement of employment laws could, for example, prevent the UK from introducing new measures to restrict claims, such as reintroducing fees for bringing employment tribunal claims or placing caps on compensation for discrimination claims.

The Government may well seek to amend the UK’s implementation of UK rules to make them more business friendly, but is unlikely to want to do anything that will jeopardise tariff free access to EU markets.  If anything, the Good Work Plan demonstrate that the UK is committed to increasing employment protections rather than water them down post-Brexit.

Right to live and work

Brexit means several changes to the right of EU citizens and their families to live and work in the UK, as follows:

  • EU citizens who have lived in the UK for 5 or more years by 31 December 2020 are free to live in UK and can apply for EU settled status;
  • EU citizens who have lived in the UK for less than 5 years by 31 December 2020 can apply for EU pre-settled status then once they have been in the UK for  5 years, they can apply for EU settled status;
  • Family members of EU citizens in the UK pre 31 December 2020 can apply for EU settled or pre-settled status in line with the above.

Brexit will affect the steps employers are obliged to take to be able to demonstrate that they are preventing illegal working:

  • Up to 30 June 2021 – no change.  Up until that date, employers can accept an EU passport or other proof of EU citizenship, as stated by the home office, as evidence of the right to work in the UK for all new employees.
  • After 30 June 2021 – proof of EU citizenship will no longer provide organisations with the statutory excuse they need to be able to prove they prevented illegal working.  An updated list of accepted documents for right to work checks will be published closer to the time.
  • If employees had the right to work in the UK when they were employed and the employer has evidence of this, the employer does not need to carry out retrospective checks.  However, beware, some right to work can be time limited. In which case employers are obliged to carry out repeat checks on time limited documents.

Employers should ensure that they take the following practical steps to protect themselves:

  • Audit their workforce to identify any affected employees who may need to apply for settled or pre-settled status;
  • Encourage anybody who needs to apply for settled or pre-settled status to do so early for free using www.gov.uk/settled-status-eu-citizens-families.
  • Diarise expiry dates for pre-settled status;
  • Ensure Contracts of Employment refer to conditionality on having right to work;
  • Diarise regular right-to-work checks;
  • Consider recruitment policies and how the right to work checks should be integrated into this;
  • Consider whether they are or should become a licensed sponsor?

If you wish to carry out right to work checks on current staff, to avoid the risk of race discrimination it would be advised to carry out this check with all employees, not just EU citizens.  In addition to this, organisations should not request to see any settled status documents until 1 July 2021.  If the employee wishes to provide you with this information before then you can accept this however, you should not request it from the employee.

After 30 June 2021, if you wish to view an employee’s right to work in the UK online you can.  To do this your employee will need to request a share code, once you have received this code you can check their right to work status online.