Brexit - Extracting the potential impact on workers' rights from the maelstrom

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11 April, 2019

With the pervading sense of uncertainty consuming the arrangements for the UK leaving the EU, it is an unsettling time for both the populace and companies operating within the jurisdiction. One of the many uncertainties is the potential impact Brexit may have on UK employment laws, and consequently workers' rights.

As a Member State, EU law has direct effect on UK law pursuant to the European Communities Act 1972. This means that the UK is obliged to implement EU law into domestic law. The UK is also subject to the jurisdiction of the CJEU (Court of Justice of the European Union), and bound by the jurisprudence of the CJEU in relation to employment matters. EU law is essentially the base level of standards that the UK is obliged to provide. Although the UK can provide enhanced rights over and above those provided under EU law, it cannot legally fall below that base standard.

After Brexit, EU law will no longer have direct effect and will no longer bind the UK. The Fundamental Freedoms in the TFEU (Treaty on the Functioning of the European Union) and the EU Charter of Fundamental Rights will cease to apply, alongside EU Directives protecting workers' rights. The domestic legislation crystallising these rights will subsist subject to any revision by Parliament. Although the existing jurisprudence of the CJEU will continue to apply, and although future decisions of the CJEU could be taken into account domestically, it will be possible for the Supreme Court to overturn previous CJEU decisions. Essentially, employment law in the UK will be permitted to diverge from EU provisions continuing to bind remaining Member States. Post-Brexit, the government will be the sole arbiter of employment rights and obligations in the UK. It will be free to legislate at will, bound only by its loosely framed obligations under various regional and international human rights treaties.

The existing government has given undertakings on various occasions that rights afforded to workers pursuant to EU law will continue to be protected after Brexit, and that there will be no derogation of these rights. However, constitutionally, there are no legal limits on the powers of Parliament. These undertakings, whilst perhaps offering a form of comfort to some, are no more than a political statement. They have no legal basis, and consequently are unenforceable. After Brexit, there is constitutionally no way to ring-fence workers' rights, whether derived from EU or domestic law. Any governmental promise has no value. Given the fact that UK employment laws have been heavily deregulated since the late 70's, the concern is that the existing rights framework will be gradually eroded as an economic model based on pursuit of profit at the cost of individual rights is pursued.

One of the largest potential impacts of leaving the EU is the restriction on free movement of workers. Some groups believe that a restriction on the free movement of workers would create opportunities for workers currently habiting in the UK as more jobs became available. However, the reverse side of this is that the shortage of skilled workers in areas which are currently bolstered by workers from other EU member states (such as health and agriculture) will result in a lack of suitable candidates. The education and training infrastructure in place in the UK has evolved in an environment where workers have been supplied by other members states and is therefore unlikely to be able to meet the supply demands of employers should free movement be restricted, creating a labour gap. There is also the danger that draconian social security law will develop to account for the shortage in British workers skilled or willing to fill the vacant roles, coercing the direction of labour.

Given the current government's commitment to commerce, it is difficult to envisage it permitting a situation whereby employers are heavily affected by a shortage of workers, which could in turn empower Trade Unions. It is possible that any deal arrived at would provide for a degree of free movement through short-term visas for example, or the continuation of free movement for a temporary transition period. This could be concerning given that the level of protection afforded to such workers could be minimal or inadequate. It is also contrary to the seeming ideological factors behind the drive to leave the EU and negates any potential benefit seemingly afforded to British workers by Brexit. As with the entire array of issues for consideration, the tension between the ideological drive and the practical realities and necessities is all too evident.

To offer some form of comfort, the government could offer a form of non-derogation clause as part of any deal with the EU, and agree that UK employment rights will continue to mirror those developed by the EU. However, the binding nature of any such agreement is not clear and would essentially be implementation of EU law by the back door giving rise to the view that the UK would, as far as employment law is concerned, be a de facto member state albeit not a de jure one.

In conclusion, the impact of Brexit on employment law will depend on the nature of the government elected to run the county in the ensuing decades. Presumably, a Labour government based on the current leadership would be less likely to erode existing workers' rights and would continue to generate a rights based system. A Conservative government would be more likely to take a commercially focused approach. Given the complex nature of the withdrawal from the EU, any government in power is going to be tied up finding its way through a complex political, legal and constitutional matrix. Although an important part of the UK law and economy, employment law is unlikely to be at the forefront of proposed change, with stability being favoured in the short term allowing the government time to focus on more essential and pressing issues. Mirroring that, economic, trade, supply and tax issues will no doubt be more real concerns for companies in the coming months. How the 'long game' for workers' rights and employment law plays out remains to be seen.

For more information contact Rosalind Leahy in our Employment & HR department via email or phone on 01772 220185. Alternatively send any question through to Forbes Solicitors via our online Contact Form.

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