EMPLOYMENT LAW IMPLICATIONS OF A BREXIT

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1 EMPLOYMENT LAW IMPLICATIONS OF A BREXIT FRASER YOUNSON Fraser Younson Legal UELI SOMMER Walder Wyss

2 UK Focus Fraser Younson Fraser Younson Legal fylegal.hotmail.com Tel:

3 European Convention on Human Rights Art 6 TEU recognises ECHR as an obligation on EU member states Withdrawal from EU does not automatically mean that UK no longer has to comply with ECHR because: Self-standing international law obligation HRA has implanted it into domestic UK legislation If HRA not repealed: ECHR would in effect continue via domestic legislation UK courts influenced by decisions of the ECHR court If HRA repealed and replaced by a Bill of Rights: Preserved rights would continue to be influenced by decisions of ECHR court. depending on how much these rights are modified

4 Mechanics of Brexit Art 50 TEU UK serves formal notice of withdrawal UK and EU negotiate exit agreement taking into account the framework for its future relationship with the EU (i.e. trade deal etc) Withdrawal takes effect from agreed date or, failing that, 2 years from service of notice of withdrawal Repeal of European Communities Act 1972 Stops automatic legal requirement to implement new or amending Directives or to apply new rulings of the ECJ But need to look at how EU social policy legislation implemented into the UK

5 Mechanics of Brexit Direct effect - e.g. art 157 TFEU (equal pay), new regulation on data protection) Still applicable in the interregnum period prior to withdrawal taking effect. Would also need specific legislation to remove it from the UK primary legislation Horizontal effect art 21 EU Charter e.g. discrimination age, sex, race, ethnic origin, sexual orientation, religion and belief, disability etc Still applicable unless specifically disapplied UK primary legislation e.g. Equality Act, TUPE etc Remains effective unless specifically repealed UK secondary legislation Remains effective unless primary legislation repealed

6 The Court s Approach - current Purposive interpretation art 4.3 TEU, Webb v EMO (pregnancy discrimination need for a male comparator) Interpretations of ambiguities must be consistent with parent Directive - Marleasing Writing in text to comply with parent Directive Marleasing, Coleman No 2 (associative disability discrimination), Litster v Forth Estuary Engineering (TUPE), Bear (WTR holiday pay calculation) Dis-applying offending domestic legislation Marshall (discrimination comp. maximum)- duty owed by member state legislature and the courts - Dansk Industri v Estate of Eigil Rasmussen (age discrimination) and Kucukdeveci

7 Impact of EU law - Discrimination Extending pay to cover all forms of pay Barber retirement benefits excluded from EQP Act Clarifying that equal pay included work of equal value (where no JES) - EC v UK, Danfoss Extending scope of indirect discrimination and laying down strict test of objective justification Bilka-Kaufhaus No need for male comparator for pregnancy discrimination Webb (where SC reversed its earlier decision)

8 Impact of EU law - Discrimination Requiring effective remedies in sex discrimination cases Marshall Protecting gender re-assignment - P v S Extending discrimination protection to post-employment - Coote Introduction of protection against harassment EOC v Sec of State for Trade & Industry UK law on grounds of sex in adequate protection with Equal Treatment Directive

9 Courts Approach Post Brexit No change during interregnum period Reduced effect of:- Purposive interpretation Impact of Marleasing No ability to write in words to ensure compliance No ability to dis-apply UK domestic legislation

10 Courts Approach Post Brexit BUT... Where EU derived laws left in place UK courts will look to past and future ECJ judgments on the parent Directive (unless the UK Government passes legislation which specifically dis-applies those judgments) Even where the EU derived law is repealed and replaced with a lite version on the same topic, UK courts may still look to non-binding jurisprudence of the ECJ on that topic for guidance

11 Filling the holes? Will the common law come to the rescue? Will the gaps be filled by more specific protections in employment contracts? Increased role of collective bargaining?

12 Possible changes general overview Very little until UK s trade deal with EU is sorted Norway (EEA) requirement to comply with EU employment social policy Switzerland (EFTA) conditions of bilateral treaties So marginal in the short term Theoretically, all employmen tlaws open to repeal but unlikely Very unlikely that there will be a great sweeping away of EU employment legislation more likely to be tinkering around the edges, over time. Certain topics have considerable political consensus, so very difficult to remove completely Discrimination Family friendly

13 Possible changes general overview Considerable legal and commercial obstacles TUPE (service change provisions business overwhelmingly wanted to retain) Considerable uncertainty during transition period Depends on what UK has to agree to as part of a trade deal waiting period Massive changes unlikely where there material political consensus e.g. discrimination, family friendly initiatives UK gold-plating maternity/paternity/parental leave TUPE change of service providers (business overwhelming supported its retention)

14 Where changes might occur Discrimination A cap on max compensation? Removal of associative discrimination claims? Lower objective justification threshold? Qualifying period? Shorter period to claim back pay?

15 Pregnancy, maternity, paternity, parental leave Unlikely to change much UK already goes further than the Directives require

16 Atypical workers Part time and fixed term workers Part-timers have some protection under indirect sex discrimination Limit protection to just employees - in effect reversing O Brien v Ministry of Justice Fixed term workers dis-apply to discrimination in pay (following UK s submissions in Del Cerro Alonso) Loosening test for objective justification Agency workers Possible wholesale removal? Narrow definition of pay?

17 Working Time Limit calculation of overtime to be included in holiday pay to mandatory overtime Clearer definition on reference period for calculating holiday pay Further limitation on back pay claims Increasing flexibility or working hours - beyond current opt out provisions

18 Collective consultation rights Collective redundancy consultation Higher threshold for application Reducing protective award and possibly making it more loss based Changing meaning of consultation: exchange of views instead of with a view to reaching agreement Later trigger point

19 Collective consultation rights TUPE Minimum number of employees threshold to applicability Maximum consultation period Change in definition of consultation: exchange of views instead of with a view to reaching agreement Reversal of Berriman v Delabole Slate ( ETO reason) Greater ability for employers and employees to mutually agree changes in contract Repeal of reg 4(9) Reducing protective award and possibly making it more loss based Wider ability for equivalent overall changes in contracts

20 Collective consultation rights European Works Councils Repeal? but most UK based multinationals hade already agreed to EWCs prior to 1999 HR difficulties in excluding UK empolyees when rest of EEA workforce covered Information & Consultation Regs Hardly utilised and limited application Politically easy for UK to repeal If not repealed likely increase application of employee threshold modify category 3 consultation/negotiation