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The Great Divorce: Brexit, workers’ rights and the Great Repeal Bill

In March the UK triggered Article 50 and started the formal process of our withdrawal from the EU. Whilst much remains uncertain, the government has said that it wants UK courts to be “the ultimate arbiters of our laws”. To achieve that it intends to implement the Great Repeal Bill which will repeal the European Communities Act on the day we exit (likely to be the 29 March 2019).

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 to EU law and requires the UK to interpret domestic legislation in a manner compatible with those laws – as interpreted by the European Court of Justice “ECJ”).
  • “Convert” directly applicable EU laws into UK law as these stand at the point of our exit.
  • Create powers to make changes to existing legislation without parliamentary approval (a proposal which has been heavily criticised). What UK laws are derived from Europe?

The government has estimated that over 12,000 EU regulations are in force in the UK. In the context of employment law the most significant are the Working Time Regulations, Agency Worker Regulations, TUPE, Equality Act and provisions regulating the requirement for collective consultation 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?

The UK will continue to be bound by ECJ decisions until another agreement is reached or we unilaterally withdraw from the EU. Businesses will have to continue to follow all existing UK laws that derive from the EU during this 2 year period and our courts and tribunals will have to consider relevant ECJ decisions to do this.

How will EU law be interpreted post Brexit?

The Government has said that our 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 Supreme Court. However, it is not clear if that means that ECJ interpretations will “fossilise” at that point and that 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 a common understanding of what EU derived law means and providing certainty for businesses.

Let’s take holiday pay as an example. The ECJ rulings 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, our courts have had to add words to the Working Time Regulations – a process that was unsuccessfully challenged by British Gas in its litigation against Mr Lock. It is not clear if, post Brexit, our courts will continue to have to interpret our laws in this way. Even if they are required to do this, what happens if the ECJ makes a significant ruling after we have exited the EU? Will our courts simply ignore it?

That doesn’t really make sense; the law is not static and it is inevitable that this will create further uncertainty for both business and for the workforce.

Will workers’ rights be diluted?

The government has said that 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. Instead the Great Repeal Bill will buy the UK some time to allow it to scrutinise, amend, repeal or improve any aspect of EU law in the future.

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

Preparation in advance is essential in order to demonstrate your business is ready for investment. This will give the investor confidence, save time and ensure the business maximises value from the investment.

Published: 24 July 2017

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