Samantha Velluti (Sussex Law School)
Turn him to any cause of policy,
The Gordian Knot of it he will unloose,
Familiar as his garter
William Shakespeare, Henry V,
Act 1 Scene 1. 45–47
As bad as it gets: the lethal cocktail of Brexit and COVID-19
And so it happened. On 31 January 2020, amid much celebration and sorrow, the United Kingdom (UK) officially left the European Union (EU). This was a historic moment, which put an end to the wrangles that mired the UK’s political and constitutional landscape in the aftermath of the 2016 EU referendum. It also seemingly put an end to the “Brexistential angst” and the unsettling uncertainty that came with it; or so we thought. The one thing we know for certain is that Brexit entails a “material change in circumstances”, and in a very fundamental way. The reasons for the UK’s withdrawal from the EU are many and of a complex nature. But one stands out for its significance. In the eyes of many, the EU has failed to grant individuals the structures, entitlements and protection to make better and more successful lives for themselves in a fast-changing global economy. In this context, the question of employment rights has been a recurring theme in the debate over the UK’s membership of the EU.
Since then, the world has been grappling with the extraordinary and overpowering impact of the COVID-19 pandemic. The (economic) lockdown required to fight against it has laid bare existing inequalities – and even created new ones. To demand collective sacrifice governments must provide a social contract to the benefit of all but, owing to pre-existing (and in some instances profound) societal inequalities that are yet to be tackled, the economic burden imposed by social distancing is not being equally shared. The immediate effects have largely fallen on the poorest, the low-paid and unskilled workers as well as fixed-term and precarious workers. As a commentator rightly puts it: ‘“low skilled” has become as much a measure of moral worth as a job description.’ The pandemic is thus brazenly exposing the frailties and “brittleness” of countries’ policies and economies, compounding what are likely to be the social impact(s) of Brexit.
The argument that EU labour law, such as health and safety rules, has imposed an unreasonable burden on businesses, particularly small and medium enterprises (SMEs) has been a mantra for those arguing in favour of Brexit. However, in the wake of the pandemic there are already calls for improving working conditions and ensuring adequate legal protection of workers at the end of the transition period (until 31 December 2020 unless an extension of 1 or 2 years is agreed by July 1 2020). The focus is on establishing a floor of rights and setting minimum standards to guarantee fairness and equality in the workplace and to break reliance on low paid and low skilled workers.
How will Brexit impact UK employment legislation?
In turning to the question of Brexit’s potential consequences on labour rights the first point to be made is that much depends on the type of Brexit. During the transition period the UK will continue to trade with the EU, more or less in the same manner, and thus in the short-term UK employment legislation will not change significantly.
Undoubtedly, the withdrawal from the EU poses a number of formidable challenges for UK employment law. Many UK workers’ rights hinge on the substantial body of EU primary (in addition to the Treaties, the EU Charter of Fundamental Rights (EUCFR) is of particular salience as a living instrument for human rights protection) and secondary legislation and their exercise has been strengthened by the jurisprudence of the Court of Justice of the European Union (CJEU). Even though the Court does not always consider social rights its “cherished offspring” and has held at times that EU labour law also applies in the interests of businesses and employers, it has nevertheless delivered some rather bold rulings that have strengthened the level of protection of workers’ rights and expanded the scope of social rights. It should be recalled that EU law offers a higher level of protection because it grants individuals the right to an effective judicial remedy and also requires member states to ensure adequate protection of EU rights in line with the judgments of the CJEU.
Hence, it can readily be seen that the extraction of the UK from the EU potentially causes a serious disruption to British workers’ rights precisely because they would be deprived of another layer of protection.
UK employment rights can be subdivided into three categories:
- domestic employment rights with no EU influence or intervention and upon which Brexit will have no direct impact
- EU-derived labour rights
- domestic employment rights that have been amended, extended and underpinned by EU legislation
Brexit could have potential detrimental impacts on the second and third category of employment rights even though the government has been maintaining since the 2016 EU referendum that it would protect workers’ rights. In November 2016, Greg Clark, then Business Secretary, told the UK parliament that the government would ‘entrench all existing workers’ rights in British law, whatever future relationship the UK has with the EU’ with the government pledging it would not only protect workers’ rights but enhance them. The current Prime Minister, Boris Johnson, has reiterated these promises about protecting workers’ rights but important changes contained in the EU Withdrawal Agreement Act 2020 (EUWA) in comparison to previous versions (discussed further below) seem to suggest otherwise. The Political Declaration setting out the Framework for the Future Relationship between the EU and UK (a non-legally binding document accompanying the Withdrawal Agreement) includes a commitment of the government to work together with the EU to safeguard ‘high standards of … workers’ rights’ (point 2) and a statement that the future relationship must ensure open and fair competition and a commitment to ensure a level playing field that extends to provisions on social and employment standards (point 77).
However, there are also some important omissions. The 2020 EUWA no longer has provisions relating to workers’ rights. In the December 2019 Queen’s Speech, it was announced that protection for EU workers’ rights will be included in a forthcoming employment bill, although details of this bill have yet to be published. The latter would have to be passed by the end of the transition period to guarantee the effective protection of EU-derived rights.
As mentioned above, a large part of UK employment law is derived from and grounded in EU law. Under the European Union (Withdrawal) Act 2018, these rights were secured as ‘retained EU law’, which essentially meant that these rights would continue to apply after the UK ceased to be an EU member state. That said, unless there would be provisions ensuring that existing workers’ rights in a future UK-EU agreement would be preserved, the risk that these rights could be amended or reduced by domestic legislation after Brexit remained. For this reason, Clause 34 and Schedule 4 of the October 2019 EU Withdrawal Agreement Bill (EUWAB) provided some safeguards for these rights, which were based on Draft Clauses published by the May government in March 2019. In particular, these clauses provided that a minister would have had to consult with businesses and trade unions about the impact of proposed legislation on workers’ rights, which would then have to formally state whether the bill would reduce workers’ retained EU rights. To this end a list of EU directives, considered to be relevant for determining workers’ retained EU rights, was included in the bill. The government would have also had to report on a regular basis on the adoption of any new EU labour law and state whether UK employment legislation already protected these rights and, if not, to explain whether changes in domestic law would be made to keep up with the new set of EU labour rights. Significantly, the reports would have been subject to the UK parliament’s approval. The EUWA 2020 does not contain these clauses and it remains to be seen whether the government will pass a new employment bill.
In addition, the EUWA 2020 also includes other changes. It has provisions to enable UK ministers to make regulations to provide that (specified) lower courts are able to depart from retained EU case law in certain situations; a provision to prohibit a UK minister agreeing to any extension to the transition period; and the removal of provisions giving the UK parliament a role in approving negotiating objectives in the next phase of UK-EU negotiations and approving the final UK-EU treaty.
There are also a couple of reforms implemented by the government a few years ago, which significantly diminish the practical impact of EU-derived rights conferred to workers.
In 2013 the government removed civil liability damages as a result of any breach of health and safety regulations at work (an area largely governed by EU law), including provisions which are qualified by standards such as reasonable practicability. Health and safety regulations are thus only subject to criminal sanctions. This does give rise to the legitimate suspicion that the reason behind this reform is intended to reduce “costs” of health and safety regulations for employers. The second major change is the introduction of fees for bringing claims in the employment tribunal, which together with the low level of compensation awarded to successful claimants acts as a powerful disincentive to bring a legal action against an employer. Following the UNISON case employment tribunal fees are considered an unlawful interference with the common law right of access to justice. That said, the judgment illustrates how the task of ensuring adequate protection of workers’ rights is still left to courts. As Michael Ford QC maintains: ‘[the above changes] are illustrative of an emerging trend of using changes to procedures, qualifying conditions or remedies greatly to weaken the effect of substantive rights both in employment and in other areas. They make the case for erasing existing worker rights from the statute book less pressing, even for a future government with deregulation high on its agenda.’
The reassurances given by the current Prime Minister, therefore, are no guarantee that a watering down of workers’ rights legal protection will not take place. One of Brexit’s casualties, therefore, could be the legal protection of employment rights with concomitant deregulatory processes. The implications for UK employment law will very much depend on the type of Brexit. In the case of a “hard managed Brexit” there would be a potential loss or dilution of employment rights. Specifically, those relating to secondary legislation would run the risk of being reduced or removed. There is also no guarantee that the UK will align itself with future EU labour laws (e.g. the new Work-Life Balance Directive, which EU member states should implement by August 2022). More generally, the loss of EU citizenship and the correlated freedom of movement will also affect British citizens and workers, not only EU nationals. There is still the possibility of a “soft managed Brexit” should the government’s position on its future relationship and trade deal with the EU soften in the course of the negotiations so as to include a more comprehensive level playing-field commitment, thereby ensuring a closer alignment with the EU and its rules. However, as in the case of a “hard managed Brexit” the potential loss of rights, particularly those related to secondary legislation, should not be dismissed, as these rights could still be subject to repeal or amendments that could reduce the level of legal protection. This is particularly the case as the EUWA 2020 removes the need for the UK parliament’s approval in relation to the UK’s negotiating mandate for the next stage of negotiations with the EU, de facto depriving it of any role in shaping the future relationship with the EU. A third scenario could be a “hard no-trade deal Brexit” at the end of the transition period, unless the UK decides in the Joint Committee together with the EU to an extension to the transition period, to be made before 1 July 2020. This is unlikely given that clause 33 of the EUWA 2020 prohibits this possibility, although the likelihood that government derogates from this clause should not be completely discarded given the long-lasting effects of the COVID-19 pandemic. With this type of hard Brexit, the UK would revert to “third-country status”, which would entail the application of WTO rules in any trading with the EU. The adverse effects on the workforce in this scenario would probably be high, not only in relation to the loss or dilution of employment rights but, more broadly, in economic and social welfare terms, as indicated in the government’s Operation Yellowhammer report.
There is also another important factor to take into account. If the economy were not to perform well or if there were to be a severe economic downturn, the detrimental socio-economic effects of any type of Brexit would potentially be widespread affecting the most vulnerable such as those with irregular employment or on low-income or with precarious employment. It remains to be seen whether the government’s pledge to create a UK Shared Prosperity Fund will suffice to replace the EU Structural and Investment Funds.
Any attempt to understand the possible consequences and implications of Brexit on workers’ rights following the exit of the UK from the EU needs to consider the unfolding socio-economic impacts of the COVID-19 pandemic: this is a health issue with huge ramifications for social welfare. It thus requires a fresh rethinking not only of domestic employment rules but also of social law and policy that goes beyond party politics and ideology. The employment and social welfare impact of Brexit now takes on greater urgency. There are ongoing calls for government to commit itself to ensuring that an equivalent level of employment protection is maintained after Brexit.
Brexit should equally be a wake-up call for the EU and the trajectory of its approach to social and employment rights, which has been waxing and waning over the years. The EU’s turn to economic liberalisation in recent years has made some commentators refer to Social Europe as being dead. Beyond ad hoc changes, the unprecedented crisis caused by the pandemic forces policymakers to address the most pressing question of what type of social settlement might need to be put in place to stop the inequality becoming so stark and to urgently (re)consider issues of redistributive justice.
The views expressed in this article reflect the position of the author and not necessarily the one of the Brexit Institute Blog
Samantha Velluti is a Reader in Law at Sussex Law School. She may be contacted by email at: email@example.com
Image Credit: Covid 19 Response, European Commission