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The Potential Impact of Brexit on Employment Law

On 1 January 2021 the UK  left the single market and customs union and employers should also be mindful of the impact that Brexit may have on employment law and subsequently the rights of their employees.

At present, there are several European Court of Justice (ECJ) decisions and interpretations of EU law which must be followed by domestic courts in the UK, however, as part of the European Union (Withdrawal) Bill, the UK courts and tribunals will no longer be obliged to follow ECJ decisions and may depart from EU law in their decisions. Employers and employees may see significant changes in areas as the Government tries to improve the economic environment for employers. Changes may be seen in the following areas of employment law:

Discrimination Law

As a result of EU case law (Marshall v Southampton and South West Hampshire Area Health Authority (No 2) (1993)) the Sex Discrimination Act was amended to remove the cap on damages awarded to successful claimants in sex discrimination cases and following this, claims for discrimination under the Equality Act 2010 also became uncapped. However, an unlimited cap on damages is a significant concern for employers and following Brexit, there is growing support for the cap to be reintroduced to limit the level of financial liability and uncertainty when facing a discrimination claim. Unfair Dismissal claims were capped to 12 month loss of earnings for similar reasons.

Redundancies

Consultation periods for collective redundancies are an EU-based right and presently, where an employer is considering either :

(a) less than 20 people being made redundant, requires reasonable consultation but there is no minimum period,

(b) redundancies within a 90-day period or less, consultation must start at least 30 days before the first dismissal takes effect,

(c) for 100 plus redundancies, a minimum 90-day period is required

TUPE

At present, employers have little or no ability to change the terms and conditions of employees of companies that transfer ownership. EU law states that employers cannot change the terms and conditions of transferring employees’ contracts of employment unless there is a technical, economic or organisational reason for doing so.

It is thought that following the UK’s departure from EU law, changes may be introduced to make it easier for employers to change the terms and conditions of employees who are transferred .

Maximum Weekly Working Hours pursuant to the Working Time Directive/Holiday Pay

Currently, the EU Working Time Directive sets out a maximum working week of 48 hours. The UK had a well-known opt-out system to this Directive, and post 1 January 2021, the UK may look at removing this limit entirely.

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