Brexit and Employment Law

On 24th December 2020, the United Kingdom and the European Union signed the UK-EU Trade and Cooperation Agreement (TCA) and related agreements. The TCA is the main agreement that will govern the future UK-EU trading relationship following the end of the transition period.

This article is not intended to provide a full review of the TCA (on account of it being over 1,200 pages long!) but will instead focus on the impact of the TCA on Employment Law and the relationship between the UK and EU.

What happens to existing EU-derived employment law?

Under the EU Withdrawal Act 2018, any EU-derived domestic legislation in effect immediately before 31st December 2020 is unaffected by the TCA. This means that legislation such as TUPE and the Working Time Regulations will stay in force but must continue to be interpreted in conformity with the relevant EU law. 

What are the ‘rebalancing provisions’?

The EU had originally proposed that the UK should be required to stay in alignment with new EU employment rights. However, the TCA does not require this and instead, states that the UK and EU must not weaken or reduce the level of employment rights in place as of 31st December 2020, in a manner which affects trade or investment. 

If either party does take such action, the TCA contains a ‘rebalancing’ clause which means that in the absence of agreement between the UK and the EU, the matter will be referred to a dispute resolution process which involves a panel of experts. These ‘rebalancing’ provisions include the possibility of imposing tariffs and parts of the TCA on trade can be suspended, although measures must be restricted in scope and proportionate to remedy the situation. 

 Is the UK required to comply with new EU directives?

The UK is, in principle, free to ignore any new Directives. However, if the UK’s decision not to adopt any future Directives in full results in a significant divergence on employment rights in a way that materially impacts trade and investment, then the EU can trigger the rebalancing provisions (but only if it can establish proof of such impact).

Will we see changes in UK employment law?

In the short term, very little is expected to change in relation to UK employment law, but there is the real possibility that we will see some minor changes in the future. For example, some of the more controversial aspects of employment law which have developed from European case law could be changed, such as holiday pay calculations. However, major changes such as a complete repeal of the Working Time Regulations, seem less likely.

Any future changes may require amendments to employment documentation such as contracts or Staff Handbooks. 

WSA Partners, Loosemores Solicitors can assist you in any employment matter including issues relating to UK-EU Trade and Cooperation Agreement. Please contact Karl Thomas, Partner and Head of Employment and Dispute Resolution at Loosemores Solicitors via ThomasK@loosemores.co.uk or call 02920 224433. 

Loosemores offer a range of employment and HR services that you can access as and when you require. Please visit Loosemores HR for more details. For any other Legal matters please utilise the WSA Legal Helpline service

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