{"id":741,"date":"2021-01-26T14:28:08","date_gmt":"2021-01-26T13:28:08","guid":{"rendered":"http:\/\/www.centrepeople.com\/jp\/article\/?p=741"},"modified":"2025-06-30T17:56:45","modified_gmt":"2025-06-30T16:56:45","slug":"jan2021eng","status":"publish","type":"post","link":"https:\/\/www.centrepeople.com\/jp\/article\/jan2021eng\/","title":{"rendered":"Jan 2021 &#8211; What does the Brexit trade deal mean for employment law?"},"content":{"rendered":"\n<p>The UK and EU have published the text of their&nbsp;<a href=\"https:\/\/assets.publishing.service.gov.uk\/government\/uploads\/system\/uploads\/attachment_data\/file\/948119\/EU-UK_Trade_and_Cooperation_Agreement_24.12.2020.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">Trade and Cooperation Agreement<\/a>&nbsp;(the Agreement), alongside a&nbsp;<a href=\"https:\/\/assets.publishing.service.gov.uk\/government\/uploads\/system\/uploads\/attachment_data\/file\/948093\/TCA_SUMMARY_PDF.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">summary<\/a>&nbsp;issued by the UK government and an&nbsp;<a href=\"https:\/\/ec.europa.eu\/info\/files\/eu-uk-trade-and-cooperation-agreement-new-relationship-big-changes-brochure_en\" target=\"_blank\" rel=\"noreferrer noopener\">explanatory brochure<\/a>&nbsp;from the EU Commission. <\/p>\n\n\n\n<p>In summary, in return for a tariff and quota-free trade deal, the UK has agreed that it will not reduce employment law rights below the standards that exist on 31 December 2020 \u2013 if doing so would affect trade or investment. The UK is free not to implement future EU employment laws, but the EU may, in certain circumstances, apply \u201crebalancing measures\u201d (such as tariffs) if it has proof of a \u201cmaterial impact\u201d on trade or investment. <\/p>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n\n\n\n<p><strong>Commitment not to reduce employment rights<\/strong><\/p>\n\n\n\n<p>The Agreement provides that the UK and EU must not weaken or reduce the level of employment rights in place as at 31 December 2020, if that would affect trade or investment. This includes by failing to effectively enforce its law and standards. <\/p>\n\n\n\n<p>This commitment extends to: <\/p>\n\n\n\n<ul><li>fundamental rights at work <\/li><li>health and safety standards<\/li><li>fair working conditions <\/li><li>employment standards <\/li><li>information and consultation rights at company level, and restructuring of undertakings. <\/li><\/ul>\n\n\n\n<p>There\nare also separate commitments relating to road transport to comply with rules\non working time, rest periods, breaks and tachographs for drivers transporting\ngoods between the UK and EU. <\/p>\n\n\n\n<p>The\nAgreement also says that both sides shall continue to strive to increase their\nlabour and social levels of protection.<\/p>\n\n\n\n<p>These\nprovisions clearly restrict the UK\u2019s ability to make major changes to\nemployment law. It is not, however, a complete prohibition, because a weakening\nof employment rights is disallowed only when this affects trade or investment. <\/p>\n\n\n\n<p>Major\nchanges, such as removing working time or agency worker laws altogether, are\nvery likely to affect trade as this would give UK employers a competitive\nadvantage. Minor changes, such as amending a particular aspect of holiday\nrules, would arguably not affect trade in the same way.&nbsp;&nbsp;<\/p>\n\n\n\n<p>The Agreement commits both sides to maintaining a system for effective domestic enforcement, including effective systems of labour inspections, court action and remedies. <\/p>\n\n\n\n<p>It is\narguable that the UK does not currently have an effective system of labour\ninspections.&nbsp; However, the UK has\ncommitted to setting up a \u201cSingle Enforcement Body\u201d to widen and co-ordinate\nbetter central enforcement of employment rights. <\/p>\n\n\n\n<p>The\nobligations relating to court actions and court remedies might also limit the\nUK\u2019s ability to (for example) reintroduce fees for Employment Tribunal (ET)\nclaims, or to amend remedies for breach of employment rights, such as by\nintroducing a cap on compensation for discrimination.&nbsp;<\/p>\n\n\n\n<p>The requirement for effective remedies in the Agreement also refers specifically to \u201cinterim relief\u201d.&nbsp; This is where an ET can require an employer to keep paying a dismissed claimant before their final claim is heard. Interim relief is not currently available in the UK for discrimination cases. However, the specific reference to interim relief in the Agreement means this could be an area for future disputes.<br><\/p>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n\n\n\n<p><strong>Future EU laws &#8211; the rebalancing provisions<\/strong><\/p>\n\n\n\n<p>The\nAgreement does not require the UK to follow \/ implement new EU employment\nrights. Instead, it provides that, if UK employment rights become significantly\ndifferent from EU employment rights, in a way that materially impacts trade or\ninvestment, the EU can take \u201cappropriate rebalancing measures\u201d (including imposing\ntariffs). <\/p>\n\n\n\n<p>Any alleged impact on trade or investment must be based on reliable evidence. This means that the UK is not required to \u201cfollow the ECJ [European Court of Justice] rule book\u201d in order to benefit from tariff-free trade.<\/p>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n\n\n\n<p><strong>What happens to existing EU-derived employment law?<\/strong><strong><\/strong><\/p>\n\n\n\n<p>This is\nunaffected. EU-derived domestic legislation in effect immediately before 31\nDecember 2020 simply carries on as part of the UK\u2019s domestic law. This means\nthat legislation such as TUPE and the Working Time Regulations do not just\nvanish but continue in force.<\/p>\n\n\n\n<p>Any UK\ndomestic legislation implementing EU rights must continue to be interpreted in line\nwith the relevant EU law. This means we may continue to \u201cconverge\u201d with EU law.<\/p>\n\n\n\n<p>But\nthere will be some divergence, as the higher courts (Court of Appeal (CA) and\nSupreme Court (SC)) do not need to follow pre-2021 ECJ decisions and can depart\nfrom them if it \u201cseems right to do so\u201d. &nbsp;Tribunals\nand other courts will remain bound by pre-2021 ECJ decisions. <\/p>\n\n\n\n<p>One particular example is that some of the decisions on calculating holiday pay that have been particularly problematic for employers could be overturned. The SC is due to consider three holiday pay cases in 2021, which may give some indication of the higher courts\u2019 willingness to depart from ECJ rulings. <\/p>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n\n\n\n<p><strong>What about new ECJ decisions?<\/strong><strong><\/strong><\/p>\n\n\n\n<p>The\nstarting point is that courts and ETs are no longer bound to follow new ECJ\ndecisions (issued in 2021 and beyond) but may consider them where relevant.\nThis is likely to cause disputes in any ET case on a topic where the ECJ hands\ndown a new and potentially relevant judgment, since one side will be arguing\nthat the ET should ignore it while the other will be arguing it should be\nfollowed.&nbsp;<\/p>\n\n\n\n<p>ETs must still, however, read UK legislation in conformity with the EU law it was intended to implement (see above). Ultimately, all the ECJ does is interpret what the relevant EU law means. We expect ETs to take a cautious approach and follow new ECJ rulings in most situations.<\/p>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large\"><img src=\"http:\/\/www.centrepeople.com\/jp\/article\/wp-content\/uploads\/2021\/01\/brexit-3.jpg\" alt=\"\" class=\"wp-image-745\"\/><\/figure><\/div>\n\n\n\n<p><strong>What about new EU directives?<\/strong><\/p>\n\n\n\n<p>The UK is free to ignore any new EU Directives. There are three new EU employment Directives due to be implemented over the next two years and in practice we have already adopted or plan to adopt many of the measures contained in them, these are:<\/p>\n\n\n\n<ul><li><strong>Whistleblowing Directive<\/strong>&nbsp;(due to be implemented December 2021).<\/li><li><strong>Transparent and Predictable Working Conditions Directive<\/strong>&nbsp;(due to be implemented August 2022). <\/li><li><strong>Work-Life Balance for Parents and Carers Directive<\/strong>&nbsp;(due to be implemented August 2022). <\/li><\/ul>\n\n\n\n<p>If the UK\u2019s decision not to adopt these Directives in full results in a significant divergence on employment rights in a way that materially impacts trade or investment, then the EU can trigger the rebalancing provisions, but only if it can establish proof of such impact.<\/p>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n\n\n\n<p><strong>Social Security<\/strong><strong><\/strong><\/p>\n\n\n\n<p>From&nbsp;1 January 2021, the general rule remains that social security\ncontributions are due in the country in which the employee is\nworking.&nbsp;Under the special rules for detached workers, it may be possible\nto continue to pay social security contributions only in the UK notwithstanding\nthat the employee is temporarily working in an EU country. Certain conditions\nmust be satisfied, including that the period of work in that state does not\nexceed a specified maximum (generally two years) and the country in question\nhas decided to apply the detached worker rules.&nbsp;<\/p>\n\n\n\n<p>If the country in which the employee is working has decided&nbsp;<em>not<\/em>&nbsp;to apply the detached worker rules, employee and employer social security will&nbsp;be payable in&nbsp;the country in which the employee is working.&nbsp;EU member states must indicate whether they will apply the detached worker rules by 1 February 2020.&nbsp;<\/p>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n\n\n\n<p><strong>Conclusion<\/strong><strong><\/strong><\/p>\n\n\n\n<p>While\nthe UK government has succeeded in negotiating the freedom to diverge from EU\nemployment law, employers should not expect many changes in the short term. The\nEU and UK employment law agendas are not that far apart in the immediate\npost-pandemic future. ETs are likely to be cautious, at least initially, and\nrespect most new ECJ decisions.<\/p>\n\n\n\n<p>Employers\nshould expect and prepare themselves disputes over some aspects of employment\nlaw which were considered \u201csettled\u201d. We will see whether the UK higher courts\nwill overturn ECJ decisions and, if so, on what basis.<\/p>\n\n\n\n<p>More immediately, employers should remember that&nbsp;<a href=\"https:\/\/www.lewissilkin.com\/en\/insights\/european-works-councils-under-uk-law\" target=\"_blank\" rel=\"noreferrer noopener\">European Works Councils<\/a>&nbsp;can no longer be based in the UK and firms need to decide how to deal with their UK representatives. (Most have already put in place arrangements for this.)<\/p>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n\n\n\n<p>We have tried to cover the frequently asked questions in the area of Employment Law and Brexit at the moment. If you have any specific questions you would like advice on, then please contact: <a href=\"mailto:Abi.Frederick@lewissilkin.com\">Abi.Frederick@lewissilkin.com<\/a> or <a href=\"mailto:koichiro.nakada@lewissilkin.com\">koichiro.nakada@lewissilkin.com<\/a> of Lewis Silkin LLP.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The UK and EU have published the text of&hellip;<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[14],"tags":[125,312,298,313,306,307,308,309,310,54,311],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.centrepeople.com\/jp\/article\/wp-json\/wp\/v2\/posts\/741"}],"collection":[{"href":"https:\/\/www.centrepeople.com\/jp\/article\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.centrepeople.com\/jp\/article\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.centrepeople.com\/jp\/article\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.centrepeople.com\/jp\/article\/wp-json\/wp\/v2\/comments?post=741"}],"version-history":[{"count":3,"href":"https:\/\/www.centrepeople.com\/jp\/article\/wp-json\/wp\/v2\/posts\/741\/revisions"}],"predecessor-version":[{"id":3306,"href":"https:\/\/www.centrepeople.com\/jp\/article\/wp-json\/wp\/v2\/posts\/741\/revisions\/3306"}],"wp:attachment":[{"href":"https:\/\/www.centrepeople.com\/jp\/article\/wp-json\/wp\/v2\/media?parent=741"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.centrepeople.com\/jp\/article\/wp-json\/wp\/v2\/categories?post=741"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.centrepeople.com\/jp\/article\/wp-json\/wp\/v2\/tags?post=741"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}