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BREXIT and employment law

Figures released by the Office of National Statistics show that there were 819,000 fewer workers on UK company payrolls in November than at the start of the pandemic in March. It’s no surprise then, that Brexit has been temporarily knocked off the agenda while employers struggle to come to terms with the challenges of COVID 19.

And yet we find ourselves counting down the final few days of the transition period, which will mark the end of the UK’s membership in the European Union. After 31 December 2020, the UK legislation implementing the Withdrawal Agreement, the European Union (Withdrawal) Act 2018 (the Withdrawal Act) means that any existing EU law will become incorporated into UK legislation and referred to as “retained EU law”. UK legislation enacted after 31 December 2020 will take precedence over retained EU law.

With less than a fortnight to go, there has been no official statement regarding the Government’s planned changes to employment law. At the time of writing, we still do not know the terms of our departure, but there are a few things that we can make an educated guess on and which will have an impact on many of our client’s businesses.

Imposing a cap on discrimination awards

Compensation for discrimination based on a protected characteristic is currently uncapped. Popular speculation suggests a new cap will be introduced which may result in a negative shift in compensation for the victims of discrimination but will help employers calculate their maximum levels of liability.

The Working Time Regulations 1998

The current regulations impose a cap on a 48 hour working week. Even with an opt-out option, this has proved to be an unpopular piece of legislation. More recently, EU law has determined that working times should include travel time to and from work and it seems possible that the UK government would seek to exclude this once we leave.

Holiday pay

The European Courts have made a number of rulings in recent years relating to holiday pay that have been unpopular and unclear, particularly in relation to holiday pay accruing, being carried over and how it is calculated during periods of sickness. Departure from the EU may be the government’s opportunity to tackle these issues.

The Agency Workers Regulations 2010

Under these Regulations agency workers are entitled to the same pay as those on permanent contracts after 12 weeks on the same assignment. Employers argue that this prevents flexibility when engaging agency staff and imposes unnecessary burdens on businesses.

Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE)

Rights might be reduced under TUPE to make it easier for employers to harmonise terms and conditions following a transfer of a business. Service provision changes could also be taken out of the scope of TUPE.

Business Immigration

From 1 January 2021, the new system requires companies hiring workers who meet the points-based system to register with the government visa sponsor scheme. Existing EU employees and those who arrive in the UK before the end of this year will have protected status but must apply under the EU Settlement Scheme by 30 June 2021. The position for business travel between the UK and the EU27 however, is not so straightforward and we would recommend taking specific advice on this.

In spite of the above, it seems unlikely that the UK will undergo huge amounts of change in the immediate future because of Brexit. Redundancies, restructures, furlough and health and safety will continue to dominate the minds of employers in the short term.

If you would like to discuss any of the issues addressed in this article then please do contact a member of our employment team who would be happy to help.


Although correct at the time of publication, the contents of this newsletter/blog are intended for general information purposes only and shall not be deemed to be, or constitute, legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. Please contact us for the latest legal position.

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