Newsflash | Brexit: employment law implications? - 17/02/2021

Brexit: employment law implications?

The government has confirmed that a proposed post-Brexit review of EU-derived workers’ rights has been cancelled. To what extent can the UK now change its EU-derived employment laws and are changes in this area likely in the future?

The post-Brexit review had been expected to consider proposals to amend the Working Time Regulations 1998, including ending the maximum 48-hour working week, excluding overtime pay from the calculation of certain holiday pay entitlements and changing the rules on rest breaks. However, the cancellation of this review indicates that the government doesn’t now intend to make any changes to EU-derived employment laws, at least in the short term.

The UK-EU Trade and Cooperation Agreement (TCA) governs the UK-EU relationship from 1 January 2021 onwards. The TCA sets out a reciprocal UK and EU commitment not to weaken or reduce their labour and social standards in a manner that affects trade or investment, including by a failure of effective enforcement. In practice, this means that although the UK is now free to set its own employment laws post-Brexit, significant changes to any EU-derived employment laws that lead to the UK having a competitive advantage are prohibited.

Therefore, even on a medium to longer term basis, there will be no wholesale reform or repeal of EU-derived employment laws. The likelihood of more modest employment law changes in the future will depend both on how the TCA is interpreted by the UK government and on any changes to the UK political landscape. For example, the government may subsequently decide to make some legislative changes to reduce the administrative burden on employers, where these are not viewed as impacting on trade or investment.

Post-Brexit, the UK government can now set its own employment laws but it can’t make any changes to its EU-derived labour and social standards that lead to the UK having a competitive advantage. No changes are likely in the short term anyway due to the cancellation of the review.

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