Brexit deal – implications for employment law and workers’ rights

Essentials of the new deal

Under Boris Johnson’s deal, the Northern Irish backstop is replaced by a new Northern Ireland Protocol. The rest of the original Withdrawal Agreement remains essentially the same as negotiated by Theresa May. Under the deal, there would be a transition period until 31 December 2020, which is extendable either to 31 December 2021 or to 31 December 2022 (but only if both sides agree to an extension). There is also a new Political Declaration which sets out Boris Johnson’s revised plan for the future trading relationship between the UK and EU after the end of the transition period.

In order to put the new deal into effect, the Government must not only secure the UK Parliament’s approval to the deal, but must also pass a Withdrawal Agreement Bill (“WAB”). The current intention is that Parliament will start debating the WAB this week.

Immediate implications for employment law

If Boris Johnson’s deal is implemented:

• EU employment law would continue to apply during the transition period, i.e. until at least December 2020.
• This would keep the UK in scope of the jurisdiction of the European Court of Justice (“ECJ”), so the UK would need to implement any new ECJ decisions during the transition period.
• Freedom of movement would also continue during the transition period.
• If the transition period ends as planned on 31 December 2020, then there will be no employment-related Directives to implement. If the transition period is extended, the UK would need to implement the following:
• The Whistleblowing Directive (due to be implemented late in 2021).
• The Work-life Balance and Transparent & Predictable Working Conditions Directives. (These Directives are both due to be implemented in August 2022, so the UK will only need to implement them if the transition period is extended by two years )
• EU citizens in the UK and UK citizens in the EU would gain various safeguards and protections, including protection against discrimination at work (although UK employment law already provides protection against discrimination on grounds of any nationality).
• European Works Councils would continue to operate as they do now until the end of the transition period.
• Data flows between the EU and the UK would be allowed to continue as they do now during the transition period. The new Political Declaration says (as the old version did) that the Commission will work towards granting the UK “adequacy status” (the critical kitemark which allows data to be transferred from the EEA to the UK) before the end of the transition period.

Future implications for employment law and workers’ rights

Longer term, Boris Johnson’s deal allows more scope for divergence on employment rights when compared to the version negotiated by Theresa May:

• The original Northern Irish backstop included a commitment not to dismantle employment rights throughout the UK. Although this was only in the backstop, not the main text, it would have operated both as the baseline for a future trade deal with the EU and, critically, as the default arrangement on an indefinite basis in the event of no alternative arrangements (i.e. technological solutions for the Irish border problem) dispensing with the need for the Irish backstop at or after the end of the transition period.
• The new Northern Ireland protocol does not contain this level-playing field commitment in respect of the UK as a whole, although there are continued commitments to abide by certain EU employment legislation in respect of Northern Ireland to protect the Good Friday Agreement. The UK-wide commitment still exists in the Political Declaration, but this is not legally binding. If there were to be a general election resulting, for example, in a harder-line stance towards the EU, the level playing field commitment would not (at least from a legal perspective) need to be observed. On the other hand, the EU would probably insist on something along these lines as a precondition of a trade deal.
• Theresa May said that she wanted to see UK workers’ rights keep up with those in the EU, not just be preserved in their existing state at the end of the transition period. The new text of the Political Declaration, however, makes clear that the UK currently will not offer a commitment to increase rights in line with the EU after the end of the transition period, only a commitment not to reduce them.

On Friday evening, before the crucial vote in Parliament on Saturday, the Government reportedly offered to include the following additional provisions in the WAB on workers’ rights:

• Ministers would also have to make a statement when any new UK Bill impacted on workers’ rights, explaining its compatibility with EU standards.
• Parliament would have the right to be told about - and then vote on - any new employment-related rights introduced by the EU.

Boris Johnson said that the UK would have the option to go further than the EU in terms of employment rights, but that we could also keep pace with them if we choose. Of course, Parliament would also have the option of divergence from EU-derived rights (as we have written about in the context of a no-deal scenario) unless the EU insists otherwise as a precondition of a trade deal.

The Government is also said to be prepared to consult on reducing the qualifying period for unfair dismissal (from two years to one) and reforming the restrictions on changing terms after a TUPE transfer (it’s not clear exactly what the Government has in mind here).

Various amendments to the WAB are likely to be tabled as and when it is debated in Parliament. Employment rights looks set to be one of the contentious issues in this ongoing debate.