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Brexit and its Impact on UK Employment Law


Of course, after Brexit the UK will no longer be a member of the EU but the terms of the divorce are still far from agreed.

However, what we do know is that the principal of supremacy of EU law will no longer apply and all law-making powers will be devolved back to the UK Parliament.

UK and EU Employment Law

A substantial component of UK employment law is grounded in EU law.

In some cases EU law has entrenched provisions across its members states that already existed in our domestic law; in other words, EU law has often taken its cue from the UK, such as in the area of race discrimination and certain maternity rights.

In other cases, new categories of employment rights have been transposed into domestic law to comply with emerging EU obligations. For example, agency workers’ rights and limitations on working time.

Will the UK turn its back on the European Court of Justice?

Not completely. It is true that after 31st December 2020, a UK court or tribunal will not be bound by any decisions made by the ECJ on or after the end of the transition period and cannot refer any matter to it.

However, courts and tribunals may “have regard to” anything done on or after the end of the transition period by the ECJ “so far as it is relevant to any matter before the court or tribunal”.

This means that parties in a dispute can still seek to rely on relevant ECJ decisions made after 31 December 2020 which are potentially relevant to determining the dispute.

So what is the impact on Key UK Employment Legislation and what might change post-Brexit?

Well we simply don’t know.  Top 6 predictions are:

  1. Discrimination Law:

Although the government could repeal the Equality Act 2010 after exiting the EU, to do so would be controversial.

It is difficult to imagine many employers arguing that they should be free to discriminate against employees.

However, some commentators have suggested that, free from EU constraints, a cap could be imposed on discrimination compensation (as is the case for unfair dismissal).

Another possibility is that the government could change the law to allow positive discrimination in favour of under-represented groups in a way that is not currently permissible under EU law.

  1. Family related leave and pay:

Rights to parental and family-related leave in the UK are a mixture of rights deriving from the EU and rights originating in the UK.

UK maternity leave and pay preceded the EU rights and are more generous than those in the EU.

The right to shared parental leave and the right to request flexible working are purely domestic in origin.

Accordingly, although some critics consider these rights to be a burden on business, there seems little political appetite for their repeal or even for watering them down.

  1. Transfer of Undertakings:

TUPE can attract a lot of negative press but the principle that employees in a transferred business, undertaking or outsourced activity should transfer with it is often useful for businesses and is incorporated and priced into many commercial outsourcing agreements.

Although there may be some businesses that would like to get rid of TUPE, it seems more likely that, following Brexit, the government would make small changes to make TUPE more business friendly. For example, the government might choose to make it easier to harmonise terms following a TUPE transfer (which is not permitted under EU law).

  1. Holiday and Working Time:

The right to statutory paid holiday is now well established and it would be deeply unpopular with workers and trade unions if it was removed.

Therefore a wholesale repeal of the WTR 1998 is unlikely.

However, there are aspects of the right to paid holiday and other rights under the WTR 1998 that the government may want to amend.

Various ECJ decisions on holiday pay are problematic for UK businesses, for example the right to keep accruing holiday while on sick leave and the fact that holiday pay should be based on all aspects of remuneration, not just basic pay.

Following the UK’s withdrawal from the EU, the government may want to retain a right to paid holiday based on basic pay and with limited rights to accrue and carry it over into new holiday years.

The UK may also wish to remove the 48-hour cap on maximum weekly working hours.

  1. Collective redundancy:

The minimum time limit for starting collective redundancy consultation where an employer is proposing to dismiss 100 or more employees at one establishment is 45 days.

The obligation is not particularly onerous and trade unions are likely to fight any plan to remove it altogether.

It is possible that it could be watered down further or removed, particularly as many employees arguably do not feel particularly strongly about this right and in light of the current climate we find ourselves in.

  1. Agency Workers:

The Agency Workers Regulations 2010 (SI 2010/93) (AWR 2010) (which implement the EU Temporary Workers Directive) might be seen as a possible candidate for complete revocation as they are complex, unpopular with businesses and have not yet become embedded in a way that might make them politically difficult to remove.

However, the government has not so far indicated this to be its intention. On the contrary, following the recommendations of the Government’s Taylor review, it committed to strengthen agency workers’ rights under the AWR 2010.


In summary, very little is going to change, at least in the short to medium term.

From January 2021, if there is a political appetite to do so, the UK government could theoretically start to chip away at more unpopular EU derived laws in the UK, such as those relating to working time, holiday pay, agency workers, collective consultation and TUPE.

The Supreme Court (if cases get that far) will also have powers to overrule ECJ decisions, though whether they will or not remains to be seen.