05 January 2021

Cas's Blog - What employment law might look like in 2021

You may have heard it several times already – but not from me so happy New Year to all of you and yours!  Well after the announcement about lockdown last night, just do your best…

As if we didn’t have enough high drama last year (including Christmas being practically cancelled) we were left dangling in the run up to Christmas with the ‘Brexit deal series finale’, of would they or wouldn’t agree a trade deal?  In the end, at the eleventh hour, on Christmas Eve, the UK and the EU finally sealed the Trade and Cooperation Agreement, giving us some certainty at least about what 2021 might look like outside of the EU.

So what will the Agreement mean for employment law?  Under the EU Withdrawal Act 2018, as amended, EU-derived legislation in effect before 31 December 2020 continues in force.  Any UK domestic legislation implementing EU law must still be interpreted in accordance with the relevant EU law.

However, after 31 December 2020, the ECJ no longer have jurisdiction over UK courts and its future decisions will not be binding on the UK (with some exceptions for Northern Ireland Equality law).

Employment tribunals and courts are not bound to follow any decisions made by the ECJ after 31 December 2020 but must take the judgments into consideration.  Tribunals and courts must, however, interpret domestic EU-derived law in line with the EU law it implemented.

One of the three main sticking points to reaching agreement over a trade deal between the UK and the EU was the principle of maintaining a ‘level playing field’ to avoid the UK gaining a trading advantage over EU member states.

During negotiations, the EU made clear that its policy of a ‘level playing field’ on labour standards would apply to the UK and that due to the geographic closeness of the EU and the UK, and the economic interdependence they shared, even stronger level playing field commitments might be required as part of any trade deal.

In the event the two sides agreed to treat current shared regulations on workers' rights as a common baseline and the Agreement states that the UK and EU will continue to strive to  improve their level of employment protection.

However, the UK has the right to diverge from EU employment laws if it chooses, which may mean trade tariffs being imposed if there is proof of a material impact on trade or investment, but assessment and enforcement of any sanction will not be under the jurisdiction of the ECJ.

Under a draft Statutory Instrument, The European Union (Withdrawal) Act 2018 (Relevant Court) (Retained EU Case Law) Regulations 2020, the CA, the CS, and the CA in Northern Ireland are listed as courts that will be will be able to depart from EU case law, in addition to the UK Supreme Court.

So, while the undertaking in the Agreement clearly restricts the UK’s ability to make changes to employment law without incurring possible sanctions by way of tariffs, it is possible that we may see changes in case law over matters that don’t have a material impact on trade or investment, for example, the calculation of holiday pay.  The UK’s implementation of the right under the Working Time Regulations and Employment Rights Act,  fell short of that required under the Working Time Directive.

It will be interesting to see what the employment tribunals make of this new regime and how many cases make their way, via appeal, to CA level.

Employment law in 2021 is just one of the subjects I’ll be discussing on the Law On tour Webinars on 14 and 15 January.

In the meantime, I hope that 2021 will bring you all excellent health and much happiness, and if the Brexit gods are kind, perhaps also a little wealth thrown in!

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