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The UK has finally left the EU, the transition period has been and gone and we have a trade agreement in place.  But what is next in employment law?  There are bound to be changes, but what could be changed?

We know that the Government is now free to make changes to employment law that would not have been possible before.  However there are some limits to the changes that can be made under the terms of the trade agreement.

The trade agreement that the UK has reached with the EU stipulates that in the field of employment law, neither side will ‘weaken or reduce’ levels of protection ‘in a manner affecting trade or investment between the parties’.

It is worth noting that this obligation is not limited to those areas of employment law governed by the EU.  It refers to employment law as a whole. For example, the right not to be unfairly dismissed is found in a UK Act, the Employment Rights Act 1996.  This is not an area covered by EU law, but if the government were to repeal it altogether that would clearly be a breach of the trade agreement. It is also clear that the wholesale repeal of the Working Time Regulations or TUPE is unlikely because they offer significant levels of protection.

There are however many employment law changes that could be made that may not be regarded as sufficient to affect trade.

The rules on holiday pay for example have been unclear for many years.  Refinements made in the Appeal Courts have not been incorporated into the Regulations.  There are also differences between the annual leave provisions of the Working Time Regulations and the requirements of the Working Time Directive.

There is nothing to stop the UK Government from providing clarity on such issues as: the inclusion of overtime in the calculation, or the effect of long-term sickness absence on an employee’s entitlement. If the Regulations were to be amended, the UK courts would have to apply the new rules without considering the requirements of the Directive.

Other changes might include making it easier to agree a change in terms and conditions following a TUPE transfer.  Also, there could be a cap introduced on compensation in discrimination cases.  A further change might be simplifying some of the rules on agency workers.

How much enthusiasm or capacity the government has for making such changes remains to be seen. But a significant Employment Bill in 2021 is very likely.


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