EU-UK Trade and Cooperation Agreement: implications for employment law

The Trade and Cooperation Agreement (the “TCA”) agreed between the UK and the EU on 24 December 2020 opens up the possibility of changes to EU-derived employment law.  Last week the Government made clear that it has no current intentions to push through changes in the short term; longer term, the likelihood of changes depends both on how the TCA itself is interpreted and, of course, on developments in the political landscape.

Non-regression

The parties have committed not to weaken or reduce their labour and social standards below the levels in place at the end of the transition period in a manner affecting trade or investment, including by a failure of enforcement. This applies to fundamental rights at work, health and safety standards, fair working conditions, employment standards, information and consultation rights, and restructuring of undertakings.  There are also separate commitments covering working time rules in road transport.

Effective enforcement is defined as requiring an effective system of labour inspections, timely administrative and judicial proceedings, and appropriate and effective remedies, including interim relief, as well as proportionate and dissuasive sanctions.

Disputes will be subject to a 90 day period of consultations which, if the dispute it not thereby resolved, can be followed by a referral to a panel of experts. Remedial action can be taken (eg through temporary tariffs) if the panel of experts’ report is not acted upon.

There is also a continued commitment to respect the fundamental rights and legal principles set out in the European Convention on Human Rights.

The requirement for effective enforcement, including interim relief, could force the Government’s hand in a number of ways:

  • currently interim relief is only available in very limited types of unfair dismissal claim (although the EAT has recently suggested that this may be contrary to the European Convention of Human Rights – see our blog post here) and so may need to be extended;
  • concerns over the effectiveness of the various UK enforcement bodies may make the Government’s plans for a single enforcement body (announced in 2019) more urgent;
  • any ideas of reintroducing tribunal fees or imposing a cap on discrimination compensation may also now need to be reassessed in light of the commitment on sanctions.

The prohibition on changes which reduce labour standards in a manner affecting trade or investment means that wholesale reform or repeal of protections is now off the table. The most likely targets for abolition were the agency worker and working time rules;  these are now highly likely to stay in place.  But what about amendments to reduce the administrative burden on employers (where these might not be viewed as impacting on trade or investment), such as changes to the complex rules on calculating holiday pay, carryover of holiday or the requirement to keep records of hours worked (where UK law does not fully implement EU law as construed by the CJEU in any event – see here)?

In mid-January 2021 the Financial Times reported that the Government was considering repealing aspects of retained EU employment law including the 48-hour week, the inclusion of overtime in the calculation of statutory holiday pay, and the duty to record working hours.  At that point the Business Secretary, Kwasi Kwarteng, confirmed that a review was taking place, but he repeated a number of times that the Government remained “committed to having a really high standard for workers” and would not “row back” on the 48-hour weekly working limit, rights to breaks at work, or annual leave entitlement.  A few days later it was reported that the review has been dropped.  It therefore seems that even minor amendments are off the agenda for the time being.

Future divergence

The UK is no longer bound to implement EU Directives.  However, under the TCA the parties have agreed to strive to increase their respective labour and social levels of protection in the future. If there is significant divergence giving rise to “material impacts on trade or investment”, either party may take “appropriate rebalancing measures” to address the situation. Any alleged impact on trade or investment must be “based on reliable evidence and not merely on conjecture or remote possibility”.

Rebalancing measures will be restricted with respect to their scope and duration to what is strictly necessary and proportionate in order to remedy the situation. If one party intends to apply rebalancing measures, it must consult for up to 14 days and can then apply the measures, unless the other party requests the establishment of an arbitration tribunal to decide whether the rebalancing measures are consistent with the agreement. If this happens frequently, there is a procedure allowing for the review and suspension of the trade and trade-related parts of the agreement in certain circumstances.

There are three EU directives where Member State implementation is due to take place within the next two years – the Whistleblowing Directive by December 2021, and the Transparent and Predictable Working Conditions Directive  and the Directive on Work-Life Balance for Parents and Carers by August 2022.  The bulk of all three directives are either already part of UK law or included in plans for the Employment Bill announced in the last Queen’s Speech  (for example, carers’ leave, and various rights for casual workers to tackle one-sided flexibility). Assuming these are implemented, it seems unlikely that any relatively minor differences remaining would justify “rebalancing measures”.

 

Anna Henderson
Anna Henderson
Professional Support Consultant, London
+44 20 7466 2819

 

 

Brexit: updated “no deal” guidance for EEA citizens

On 28 January 2019 the UK Government published guidance for EEA and Swiss citizens arriving in the UK after 29 March 2019 in the event of a “no deal” Brexit. 

Individuals will still be able to enter the UK to visit, work or study, but those who wish to remain for longer than 3 months will need to apply for European Temporary Leave to Remain which will be valid for 3 years only. After this period elapses, these citizens’ right to stay in the UK will be subject to the new immigration system planned to take effect on 1 January 2021.

We have updated our Brexit Legal Guide section on migration with the proposed regime.

The Government has also announced that it is scrapping the £65 fee for eligible EU citizens to apply for settled status.

UK: employment law and migration on a deal/no-deal Brexit

The last few weeks have seen a flurry of publications providing a slightly clearer picture of the employment and immigration consequences of a Brexit deal or no-deal.  In addition to the final text of the draft Withdrawal Agreement setting out the arrangements for the UK’s withdrawal from the EU on 29 March 2019 and the draft Political Declaration on the future relationship between the EU and the UK, the European Commission has published a Q&A on citizens’ rights under the Withdrawal Agreement and a proposed Regulation on visa-free travel while the UK Government has published a policy paper on citizens’ rights in a no-deal scenario and its much-delayed Immigration White Paper.  So where does all this leave employers?  Continue reading

UK: Government’s white paper on future relationship and technical notes in the event of a Brexit no-deal

Over the summer the Government published its white paper on the future UK-EU relationship post transitional period, covering a wide range of issues including immigration and employment. On immigration, the Government stated that it recognises the importance of moving and attracting talent across Europe to support the global operations of UK firms and global investors. It suggested that business visits would continue to be permitted to and from the EU under new arrangements but for paid work in only a limited number of circumstances (perhaps in line with the current business visitor rules for non-EEA nationals). The paper also suggested permitting intra-corporate transfers across Europe, based on existing arrangements with other non-EU countries. Finally, the Government made clear that it intends to seek the secure onward movement opportunities for UK nationals in the EU who are covered by the citizens’ rights part of the withdrawal agreement, should they wish to change their member state of residence in the future.  There is little further detail on how migration arrangements could work after Brexit but a further white paper on immigration has been promised this autumn. Continue reading

UK: Brexit negotiators agree sufficient progress made on rights of EU citizens in UK

The rights of EU citizens is one of the three issues on which sufficient progress was required before the Brexit negotiations with the EU could move onto Britain’s future relationship.  The Joint Report of the negotiators issued in early December confirms that the Government is willing to accept that the specified cut off date for protection for EU citizens already exercising their freedom of movement rights to reside in the UK will be the time of the UK’s withdrawal; previously it has been unwilling to say more than that it would not be earlier than 29 March 2017.  This may provide some reassurance for employers reliant on EU staff.  See our Brexit blog for further details.

UK: New Resources

New presidential guidance has been issued in relation to how employment tribunals should calculate pensions loss and awards for injury to feelings in discrimination cases, available here. There are three bands for injury to feelings, with a usual minimum of £800 and maximum of £42,000 (save for exceptional cases); these will be reviewed in March 2018 and annually thereafter.

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UK Government Position Paper on International Transfers of Data – key points

Last week the UK Government released its negotiating position paper on international transfers of personal data within the EEA (The Exchange and Protection of Personal Data). Once the UK leaves the EEA it will no longer be subject to the General Data Protection Regulation (the “GDPR”) and would no longer form part of the EU “safe data” zone throughout which personal data may be freely transferred. The GDPR will however continue to apply to UK businesses who provide goods or services to individuals in the EEA.

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UK: Queen’s Speech and Brexit developments

The Queen’s Speech on 21 June 2017 set out the government’s programme for the next two years and was inevitably dominated by Brexit-related legislation. The principal bill will be the European Union (Withdrawal) Bill, subsequently published on 13 July 2017, which will repeal the European Communities Act 1972 and bring about Britain’s exit from the European Union. A series of factsheets has been published to accompany the Bill, including one setting out the Government’s previously announced position on protecting workers’ rights (see here).  Other measures included: Continue reading