News & Commentary

The Impact of the Brexit Deal on Employment

In negotiating the Brexit trade deal, a key point of principle for the EU was to make sure that the UK maintains a broadly similar employment law regime, in order to ensure that there would be a ‘level playing field’ for trading goods and services.

The Trade and Cooperation Agreement therefore includes a “non-regression” provision relating to employment laws. This means that the UK commits not to reduce the overall level of protection in key areas of employment law as existed at the end of 2020.

This covers health and safety laws; laws relating to fair working conditions; information and consultation rights; and restructuring of undertakings (i.e. TUPE laws). The UK has committed to having a proper process for enforcing these laws. Any disputes would be referred to a panel of experts.

It is not entirely clear how this would play out in reality, especially in the longer term. Currently, a lot of UK employment law derives from EU law and the existing laws will continue to apply after the transition. Beyond the terms of the Trade and Cooperation Agreement, there is not much political appetite in the UK to weaken key employee protections.  This could change with time, but the terms of the Agreement would seem to prevent any major erosion of standards.

However, the drafting in the Agreement remains slightly vague, both in terms of what falls within the categories mentioned above and also with references to the “levels of protection provided overall in a Party’s law and standards”. This could allow for some limited wiggle room for the UK to adjust the regime.

At one stage, there had been reports that the EU wanted to go further and include provisions requiring that the UK keep-up with future employment protections in the EU. However, the UK managed to avoid this, albeit there is a general obligation that both sides: “shall continue to strive to increase their respective labour and social levels of protection”.

Overall, the result of the Agreement is that there is likely to be very little change to the UK employment regime currently in place, at least in the near future. But in the longer term, differences may emerge. Clients with employees both in the UK and elsewhere in Europe will, in particular, need to keep an eye on this.

However, Brexit will be felt on a personal level by employees who previously benefited from the EU’s free of movement of workers. From January 2021, European nationals moving to the UK will generally be subject to the UK’s new points-based immigration system whilst EU citizens already working in the UK will need to apply under the relevant schemes for right to work protection.

Article written by: Oliver Harris