Employment Law: Stuck in the Middle with EU

Employment Law: Stuck in the Middle with EU

Key contact: Claire Knowles

Author: Rebecca Mahon

New Year’s Eve 2019 marked a momentous occasion in UK modern history – we left the European Union. At the time, we all thought that ratifying the terms of our departure would represent the biggest challenge for the government, businesses and the economy of 2020. How wrong we were…

Notwithstanding the huge challenges that the coronavirus pandemic has presented globally, the fact remains that the transition period that we are currently in will end on 31 December 2020. The government had the option to extend the transition period by up to 2 years but declined to do so, and the deadline for applying for this extension has now passed.

Everything between now and 31 December 2020 is focussing on firming up the non-binding political declaration which sets out, in principle, the terms of our future relationship with the EU. However, progress has been slow and not helped by the chaos caused by the pandemic. Michel Barnier is adamant that the terms of our departure must be agreed by October in order to give the EU chance to ratify these terms. If we don’t manage to agree terms by then, there’s a real risk of us leaving the EU without a deal. But what is all of this likely to mean for the world of employment law?

Will employment law in the UK change?

The 2018 Withdrawal Act, which is legally binding, confirms that existing EU law will be incorporated into UK law from January 2021. In other words, in the first instance, nothing will really change. However, Boris Johnson’s government have made clear that they want nothing more to do with the laws of the EU, particularly the ECJ, after our departure. The non-binding political declaration does contain a commitment to maintain high standards and working with the EU to safeguard worker’s rights, but one wonders whether Boris Johnson’s government will use this as leverage for the ongoing trade talks. The EU will not want the UK to liberalise and reduce red tape for employers too much, as this will inevitably give them a competitive advantage when it comes to attracting investment. Whilst there is nothing in the Conservative manifesto to suggest that Boris Johnson intends to do this it is nonetheless something that the UK could use as a bargaining chip, particularly given the fact that the 2018 Withdrawal Agreement confirms that the UK’s lower courts can, going forward, override EU court decisions.

Is there anything employers should be doing now?

Even if we end up in a position whereby employment law in the UK will change as a result of Brexit, the divergence from EU law is likely to be a slow one, particularly in light of domestic politics. Case law decisions may have a big part to play in this regard but are moving very slowly through the court systems at the moment as a result of the pandemic. As such, there’s not a lot more to say to employers but “watch this space” in respect of substantive changes in employment law.

One thing that we do know, however, is that rules regarding EU immigration will change from the date of our departure from the EU. We are encouraging employers with staff who are EU citizens to speak to those employees about applying for settled status under the EU Settlement Scheme (please see our previous article on this subject here, for more information about this). There has been understandable nervousness regarding the scheme which, in the first instance uses a computer generated decision (and given the recent algorithm controversies which can understand why) However, the message coming from immigration advisers is that any teething issues have now been fixed, and employees resident in the UK now should endeavour to get their application for settled status in as soon as possible, as the scheme will close on 30 June 2021 for individuals resident in the UK as at 31 December 2020.

EU citizens entering the UK from 1 January 2021 will not be able to apply for settled status and will instead need to apply for a visa in exactly the same way as e.g. someone from New Zealand. It is at this point that new issues in the process are likely to become apparent. For example, legislation governing applications for spousal visas currently says that these are only available to non-EU nationals. There is therefore a whole plethora of redrafting and administrative work that may get in the way of hiring EU workers come 1 January 2021. However, it is worth noting that you will continue to be able to rely on an EU passport/national ID card for the purposes of assessing right to work until 30 June 2021. As such, requiring an employee to show their settlement scheme status as part of your right to work checks before this date is likely to be discriminatory (as it is something that is not strictly required).

For now, we appreciate that for the most part, businesses are focussed on trying to regain some kind of normality after a highly disruptive spring and summer. However, if you are thinking ahead and would like to discuss the potential impact that Brexit may have on your employees/business, please do not hesitate to get in touch with our employment team.

Claire Knowles – Partner

Mark Alaszewski – Associate

Rebecca Mahon – Solicitor

Adam McGlynn – Trainee Solicitor

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