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The Great Divorce - Brexit, workers rights and the Great Repeal Bill

Now the UK has triggered Article 50, we start the formal process of our withdrawal from the EU. The UK government has said that the Great Repeal Bill will repeal the European Communities Act 1972 on the day we exit and that, from that date “our courts will be the ultimate arbiters of our laws”. Unless the remaining 27 EU countries agree to an extension of time, we will leave the EU and be sovereign over our laws on 28 March 2019.

Melanie Stancliffe examines what this means in the context of employment law.

What is the Great Repeal Bill?

According to the White Paper, the Bill (which has not yet been drafted), will do the following:

  • Repeal the European Communities Act (which gives effect in the UK, to EU law and requires the UK to interpret UK law in a manner compatible with EU legislation and the decisions of the European Court of Justice “ECJ”).
  • “Convert” directly applicable EU laws into UK law as they stand at the point of our exit.
  • Create powers to enable changes to be made to existing legislation without parliamentary approval (a proposal which has been heavily criticised).

The Bill will not change things yet. Once prepared, it will be debated by both the UK Houses of Parliament and even then, it will only be effective once we leave the EU.

What UK laws are derived from Europe?

The UK government estimates that over 12,000 laws of EU origin are in force in the UK. In the context of employment law, the most significant pieces of UK law implementing the EU rules are:- the Working Time Regulations, the Agency Worker Regulations, TUPE (the Transfer of Undertakings (Protection of Employment) Regulations), the Equality Act and provisions regulating the requirement for collective consultation with employees’ representatives where 20 or more employees are going to be dismissed for redundancy.

How will UK courts interpret EU-derived laws whilst we negotiate the terms of our exit?

We will continue to be bound by the decisions of the ECJ until another agreement is reached or we unilaterally withdraw from the EU (which cannot be earlier than 2 years from the date the exit notice was served on 29 March 2017). Businesses will have to continue to follow all existing UK laws that derive from the EU during this 2-year period (including freedom of movement) and the UK courts and tribunals will have to continue to apply relevant decisions of the ECJ to do this.

How will EU law be interpreted post-Brexit?

The government has said that UK courts and tribunals will continue to determine cases by reference to relevant ECJ decisions that “exist on the day we leave the EU” and that ECJ decisions will be given the same status as decisions of the UK’s highest court, the Supreme Court. However, it is not clear if that means that ECJ interpretations will “fossilise” at that point – in which case subsequent ECJ decisions can be ignored. If that is the aim, it appears to be at odds with the government’s stated intention of providing an essential common understanding of what EU derived law means and providing certainty for businesses.

Let’s take holiday pay as an example. The decisions of the ECJ have made it clear workers must be paid their normal remuneration when they take the first 20 days of annual leave. Whilst this principle is straightforward, to achieve this, the UK courts have had to add words to the UK Working Time Regulations – a process that was unsuccessfully challenged by British Gas in its litigation against Mr Lock. It is not clear whether, post-Brexit, our courts will continue to have to interpret our existing laws in this way. Even if they are required to do this, what happens if the ECJ makes a significant ruling changing the established interpretation after we have exited the EU? Will our courts simply ignore it?

That would not make sense; the law is not static and will inevitably change. Adopting a single cut off point in itself will create further uncertainty for both business and for the workforce.

Will workers’ rights be diluted?

The UK government says it will “continue to protect and enhance the rights people have at work” and that it will not make any radical changes immediately post-Brexit. The Labour Party have said that if they are elected they will protect workers’ rights. The Great Repeal Bill will buy the UK time to scrutinise, amend, repeal or improve any aspect of EU law for the future.

Whilst employment law is unlikely to be top of the newly elected government’s reform agenda, some commentators are worried that the Great Repeal Bill could be used to repeal or revoke important employment rights under the cover of removing EU laws. This is because the Bill allows the government of the day to remove any “burden” on business. This could be very widely interpreted and can include a financial cost or an “obstacle to efficiency, productivity or profitability.” It is unlikely that the government at the time will use the Bill to remove significant protections such as those in respect of discrimination. However, other laws including those protecting working time limits and holiday pay, may be more vulnerable.

Published: 5 May 2017

Employment Law Update - May 2017

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Melanie Stancliffe