Brexit means a whole new wave of change is expected in the UK employment law. Employers need to keep abreast of these developments, which will be debated through parliament and decided in courts in the coming months and years.

In readiness for leaving the European Economic Community on the 29th March 2019, the Government have introduced the European Union (Withdrawal) Bill or the ‘Great Repeal Bill’. This will revoke the European Communities Act 1972, convert all existing European Union (EU) employment law into UK law, and preserve all UK laws that implement our EU obligations. Consequently, there will be no immediate change.

Although domestic employment rights will not be affected under the Withdrawal Bill, the government have taken this opportunity to fill some gaps in our own legislation. For example, last month they took on board some of the recommendations in the Taylor Review, which was commissioned to consider modern working practices and their impact on employment rights. There will be further consultations from the review in the coming months.

"Although domestic employment rights will not be affected under the Withdrawal Bill, the government have taken this opportunity to fill some gaps in our own legislation"

With the processes of both Brexit and the Taylor recommendations taking place at the same time, employers should bear in mind the following areas of compliance:

Holidays

In the case of Sash Window Workshop Ltd and another v King [2018] IRLR 142 ECJ, the European Court of Justice (ECJ) held that a worker must be able to carry over any unused holiday when that worker is not in a position to exercise their right to annual leave. Employees will, therefore, continue to receive accrued holiday pay during sick leave, including overtime and commission. Decisions such as this could have potential long-term liabilities on the employer, or until UK courts and parliament determine how to approach this matter post-Brexit.

TUPE

The rights and obligations under TUPE (transfer of a business from one party to another) derive from Europe. The regulations are complex and can be a burden on businesses. Brexit may lead to simplification of the TUPE process for employers, including the relaxation of information and consultation requirements before a TUPE transfer, but beyond that, the obligations are likely to remain for the time being.

Data Protection

The EU General Data Protection Regulation (GDPR) is due to come into force on the 25th May 2018, introducing tougher rules for organisations that handle personal data and higher penalties. Businesses will still need to continue preparing for GDPR as this will not be affected by Brexit. Get in touch with Tassic if you’d like support and advice on GDPR compliance in HR.

Awards in Tribunals

The protections in the Equality Act 2010 will continue to apply and the discrimination compensation rates will remain uncapped, despite previous discussions by the coalition government to amend this. Prior to the case of Marshall-v- SW Hampshire AHA ICR 893 in 1993, discrimination awards were subject to a cap. In this case, the ECJ reviewed the wording of the Equal Treatment Directive and interpreted that compensation had to be adequate and cannot be subject to an upper limit. Therefore, for now, employers are stuck with this ruling.

Last month, the Government took on board the Taylor review’s recommendation of introducing a ‘naming scheme’ for employers who fail to pay employment tribunal awards. They also plan to enforce employment tribunal fines of up to £20,000 for employers showing malice, spite or gross oversight and impose penalties for employers who have previously lost similar cases. This, combined with the increased litigation by employees due to the scrapping of tribunal fees, means it makes sense for employers to negotiate on contentious termination of employment matters at an early stage. Long-term employers should have an incentive to settle unmeritorious defences to avoid added penalties, fines and face financial and reputational ruin.

Employment Rights

The legislation affording Agency Workers with the same rights as employees after 12-weeks of employment is often unpopular with employers. No immediate changes are likely, as initially thought at the start of the Brexit process. Despite the decreasing labour market due to Brexit, employing agency staff beyond a 12-week period is not an attractive option for many employers. Furthermore, the Government have stated that it will provide Agency workers more clarity about their contracts, i.e. give a clear breakdown of pay, who pays them, and costs and charges deducted from their wages. In fact, the Government have gone further to give additional rights to workers and a ‘list of one-day rights’ will be introduced. What this means is that all workers, including casual and zero-hour workers, receive basic rights, holiday and sick pay from day one. There will be new legislation requiring employers to state the hours being paid on payslips and issue payslips for all workers from 6 April 2019. At the same time, to take into account the unstable economic climate, workers will also be able to request more stable contracts. The changes will lead to added costs for employers; however, they are necessary to address some of the concerns raised by businesses to retain, support and protect our current and ever-changing workforce.

The implications, costs, and liabilities for employers with developments from Brexit, the Taylor review and forthcoming consultations in the ‘Good Work’ plan taking place will become apparent in time. For now, a proactive plan needs to taken by employers to address some of the consequences of the changing economy and working practices.

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Westminster, UK Employment Law changes in light of Brexit and the Taylor review