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1. The employment law system
[ch 1: pages 16-20]Employment rights in the UK have two main sources. The first is legislation enacted by Parliament in the form of Acts of Parliament or regulations. This is referred to as statutory law (from “statute”— another word for a piece of legislation). The second is common law (also referred to as “case law”), which has developed over the years from decisions made by judges in specific cases.
The system of legal precedent means that lower courts are bound by the decisions of higher courts. In an employment law context, employment tribunals must follow the decisions of the Employment Appeal Tribunal (EAT), which must in turn follow those of the Court of Appeal (or Court of Session in Scotland). Decisions of the employment tribunal (the first tier of courts) are not binding on other tribunals.
In Northern Ireland, appeals from industrial tribunals go straight to the Court of Appeal. However, judgments of the EAT are strongly persuasive on these tribunals, which means they can still be used to support a claim. Northern Ireland also has a specific tribunal, called the Fair Employment Tribunal, that decides complaints of discrimination on the grounds of religious belief or political opinion.
The Supreme Court (which used to be known as the House of Lords) is the highest court in the UK. The principles decided there apply to all courts and tribunals. The Supreme Court is currently bound by rulings of the Court of Justice of the European Union (ECJ).
This year’s guide is being written at a time of great uncertainty as regards the future role of European Union (EU) law, following the referendum vote on 23 June 2016 to leave the EU. For as long as the UK remains a member of the EU, as well as during any agreed transition period, the UK will have to continue to comply with all EU laws, including rulings of the ECJ.
It is worth noting that many basic statutory employment rights are based on national laws created by the UK parliament. These laws are wholly unaffected by the UK’s membership of the EU. Examples include unfair dismissal law, statutory redundancy rights, National Minimum Wage rights, unlawful deduction of wage claims, whistleblowing protection, many time off rights and the statutory union recognition laws (see Chapter 5). In particular, the regime that regulates the UK's trade unions, including tight controls on industrial action and picketing (see Chapter 6), is entirely homegrown.
EU Directives and Regulations have been issued in the following main areas of employment law:
• Business transfers (TUPE) (see Chapter 12);
• Public procurement (see Chapter 12);
• Collective redundancy consultation (see Chapter 11);
• Rights on an employer’s insolvency (see Chapters 11 and 12);
• Right to a written statement of employment particulars (see Chapter 3);
• Collective information and consultation (see Chapter 5);
• Equal pay and equal treatment (see Chapter 7);
• Agency workers (see Chapter 2);
• Part-time workers (see Chapter 2);
• Fixed-term employees (see Chapter 2);
• Working time, rest periods and holidays (see Chapter 4);
• Free movement of labour;
• Posted Workers;
• Equal access to social security benefits;
• Health and safety at work (see the LRD’s annual legal guide, Health and Safety Law www.lrdpublications.org.uk/hslaw);
• Data protection and privacy at work (see Chapter 15).
A new Directive on Transparent and Predictable Working Conditions is in the pipeline, stemming from a revision of the Written Statement Directive (see Chapter 3). A new Directive is also planned to cover whistleblowing (see Chapter 13).
EU member states must make changes to national law to implement EU Directives by a set deadline. EU Regulations (as opposed to Directives) take effect immediately without the need for changes to the national law of a member state. An example is the General Data Protection Regulation which became law automatically in the UK on 25 May 2018 (see Chapter 15: Data Protection).
Where there is a question mark over whether UK law has implemented an EU Directive correctly, the Supreme Court can refer the issue to the ECJ for a final ruling. The final ruling is usually preceded by a written opinion from a senior legal officer, known as an Advocate General (AG), appointed by a member state. The ECJ is not bound to follow an AG’s opinion but it usually does. Once the UK has finally left the EU (and after any transition period), there will be no more referrals of cases to the ECJ.
Employment law post-Brexit
As Law at Work goes to press, the long-term impact of the UK's decision to leave the EU on EU-derived statutory employment rights is very uncertain. Much depends on the timing and terms of exit and any future trade deal and on the broader political landscape.
In preparation for the UK's exit, the government has enacted national law — the European Union Withdrawal Act 2018 (EUWA). The EUWA will repeal the European Communities Act 1972 on exit day. This is the law that currently enables EU Directives and Regulations to take effect as national law in the UK. In addition, under the terms of the EUWA, once the UK leaves the EU, all EU legislation and case law is to be converted automatically into national law, but “frozen” in time as at the departure date.
The one exception is the EU Charter of Fundamental Rights, which is the EU’s human rights agreement. Despite widespread opposition, the government has refused to agree to bring this Charter into national law.
Once EU law has been converted into national law, the EUWA gives the UK government a free hand to decide which laws to keep and which to discard. The EUWA says that any ECJ case law already in force at the exit date will continue to bind UK courts and tribunals until it is changed by the Supreme Court. Future ECJ rulings will not bind the UK courts.
Free movement of people rights, whereby any EU national can work in, live in or provide services in any EU Member State provided they meet certain conditions, is a key right affected by Brexit, whatever the basis on which the UK leaves the EU. The government has set up a scheme known as the EU Settlement Scheme (settled and pre-settled status) for EU nationals in the UK. It is already open and in operation.
The government says that EU citizens with either “settled status” or “pre-settled status” will have the right to work in the UK, use the NHS, enrol in education or continue studying, access public funds such as benefits and pensions if eligible and travel in and out of the UK. Information on how to apply through the scheme can be found at: www.gov.uk/settled-status-eu-citizens-families.
Unions and the TUC are very concerned about the threat which Brexit represents to jobs and to workers’ rights. The TUC wants a Treaty-level commitment by the UK government in its negotiations with the EU not to remove any EU-based worker rights and to keep up with any new EU employment rights enacted after the UK’s departure (termed a “regression lock”), to limit the risk of Brexit resulting in a race to the bottom for workers’ rights.
Some EU-based worker rights are at greater risk of dilution than others. Here are some specific areas of concern:
• Agency workers: The Agency Worker Regulations 2010 are based entirely on EU law and are vulnerable to repeal or modification (see Chapter 2). The same is true of laws protecting part-time and fixed-term workers;
• Collective redundancy consultation: the statutory duty to consult collectively, the length of consultation, topics for consultation, the requirement for consultation to be “tantamount to a negotiation”, and for protective awards to be based on uncapped real wages (except in insolvency) are all based on EU law (see Chapter 11);
• TUPE transfers: TUPE derives from EU law, the Acquired Rights Directive. The basic framework, in particular the “automatic” transfer of employment liabilities, is likely to remain unchanged. This is because businesses have made it clear to the government that they like the certainty of knowing who has legal responsibility for employment liabilities on a sale or tender. Other key aspects of TUPE, however, such as limits on the freedom to change contract terms post-transfer, collective consultation obligations and uncapped protective awards, are all vulnerable to erosion or repeal as “barriers to business” (see Chapter 12);
• Discrimination: The UK's equality laws (especially laws against pregnancy, age, sexual orientation and religious discrimination) are greatly influenced by EU law. A wholesale cut back on anti-discrimination laws is unlikely. However, awards of compensation for discrimination are currently uncapped thanks to EU law and this is vulnerable to change (see Chapter 7);
• Working time and holidays: Holiday pay and other working time rights are especially vulnerable. This includes the requirement for holiday pay to be based on “normal remuneration”, the treatment of holiday during periods of sickness and the requirement to honour the holiday rights of the falsely self-employed (see Chapter 4). There is already media speculation that the government wants to exclude the Working Time Directive, in particular the 48-hour week, from any trade deal with the EU; and
• Interpretation: When courts are called on to interpret laws that are based on EU law, they must adopt a “purposive” (in other words, a broad and flexible) interpretation, even adding or ignoring words where necessary, in order to achieve the purpose behind the EU Directive. An example is the health and safety purpose of ensuring rest and relaxation under the Working Time Directive. After Brexit, this purposive approach is likely to be replaced by a more “common sense” interpretation, giving words their “ordinary and natural meaning”. This may well lead, in the long-term, to a gradual erosion of some EU-derived worker rights.