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European Union law
[ch 1: pages 17-20]The UK must comply with European Union (EU) law, and UK law must be interpreted so as to comply with EU law as far as possible. The Court of Justice of the European Union (ECJ) deals with the interpretation of EU law, and its case law decisions bind all courts and tribunals in the UK, even where the case involves another EU state.
The UK’s referendum vote to leave the EU will impact on the jurisdiction of the ECJ, but its long-term implications will not be known until the terms of leaving have been negotiated. Whatever happens, the UK remains bound by all rulings of the ECJ for at least two years – counting from the triggering by the government of Article 50 of the Lisbon Treaty on 29 March 2017. In practice, ECJ rulings are likely to be relevant in some way for many years (see box on page 19).
EU law directives have been issued in a wide variety of areas affecting employment rights, including:
• Business transfers (see Chapter 12);
• Public procurement (see Chapter 12);
• Redundancy consultation (see Chapter 11);
• Rights on an employer’s insolvency (see Chapters 11 and 12);
• 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 (see Chapter 4);
• Free movement of labour;
• Posted Workers (see Chapter 2);
• Equal access to social security benefits;
• Health and safety at work (see the LRD’s annual publication, Health and Safety Law);
• Data protection (see Chapter 4).
In some circumstances, claims can be brought in the employment tribunal based on EU law even if regulations have not been made in the UK to fully enact the relevant EU directive, in a process known as “direct effect”. To claim direct effect, the right under EU law must be precise.
Where UK regulations are based on an EU Directive, tribunals must adopt a broad and liberal (as opposed to a literal or restrictive) approach to interpretation, so as to achieve the Directive’s broad aims. This can involve even adding or deleting words when necessary, but the final result must remain consistent with the original purpose of the UK law (Marleasing S.A. v La Comercial International de Alimentacion S.A. [1990] EUECJ C-106/89).
When a court or tribunal is unsure whether UK law has implemented an EU directive correctly, it can refer the question to the ECJ for a final ruling. The ECJ usually takes many months to reach a decision, helped by a number of senior legal officers known as Advocate Generals (AG) appointed from different member states. Before the ECJ gives its ruling, the relevant AG publishes a written opinion on the issues. The ECJ is not bound to follow the AG’s opinion, although it usually does.
EU law only applies in a member state from the date on which the relevant Directive should have been enacted into national law, and not before (Walker v Innospec, Ministry of Justice v O’Brien [2015] EWCA 1000).
In April 2017, the EU launched new plans to strengthen workers' rights, including better work-life balance, more help for parents, carers and zero hours contract workers, and improved information rights. The proposals form part of an EU charter known as the "European Pillar of Social Rights". The TUC wants the government to commit to match these enhanced rights in its Brexit negotiations, to prevent UK workers falling behind the rest of Europe.
Employment law post-Brexit
Article 50 of the Treaty of the European Union (the Lisbon Treaty) was triggered on 29 March 2017, beginning the formal process of the UK’s exit from the EU. It provides for the negotiation of a withdrawal agreement between the EU and a withdrawing state over a two year period, at the end of which, if no agreement is concluded, the state’s membership will end automatically, unless the European Council and the member state agree to extend this period.
At this stage, nobody knows what employment law will look like once the UK leaves the EU. However, the government's official position, based on its Great Repeal Bill White Paper, March 2017, is as follows:
• Prime minister Theresa May has promised that all workers’ rights that derive from EU law will be “fully protected and maintained” under national law while she remains in office;
• a new statute, the “Great Repeal Bill”, is to convert all EU employment law at the date of leaving into domestic law, regardless of the UK’s future relationship with the EU;
• the Bill will repeal the European Communities Act 1972, which took Britain into the EU and gave EU law precedence over UK laws. It will also end the jurisdiction of the ECJ;
• the UK will withdraw from the EU Charter of Fundamental Rights, which is the EU's human rights agreement. This Charter will not be converted into UK law;
• courts will be required to interpret ex-EU laws by applying pre-Brexit ECJ rulings. It is unclear how cases still undecided at the date of the UK’s exit will be treated, or how the UK courts will approach new ECJ rulings, delivered after Brexit. Referrals are still being made to the ECJ;
• as Law at Work goes to press, the government has announced that it plans to legislate for wide powers (which the press are calling "Henry VIII powers") to scrap or water down ex-EU laws - without a vote in parliament.
In practice, there is huge political uncertainty at this stage, as the eventual outcome depends entirely on political pressures and on the terms of exit and of any future trade deal. Here are some specific areas of concern from the perspective of statutory employment rights:
• Agency workers: The Agency Worker Regulations 2010 are based entirely on EU law and are vulnerable to repeal (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 wages, are all based on EU law (see Chapter 11);
• TUPE transfers: TUPE is based entirely on EU law. The basic framework, in particular the “automatic” transfer of employment liabilities, is likely to remain unchanged. This is because businesses place a high value on the certainty of knowing who has responsibility for employment liabilities on a sale or service provision change, and there is little appetite in the “business community” for change. However, other key aspects of TUPE, such as limits on employers' ability to change contract terms and conditions post-transfer, collective consultation obligations before a transfer and uncapped protective awards, are all vulnerable to erosion or repeal as “barriers to business” (see Chapter 12);
• Discrimination: The UK's equality laws are greatly influenced by EU law. In particular, awards of compensation for discrimination are currently uncapped thanks to EU law (see Chapter 7);
• Holiday pay and other working time rights, including, in particular, the requirement for holiday pay to be based on “normal remuneration” and the treatment of statutory holiday during periods of sickness (see Chapter 4);
• The rights of EU nationals already based in the UK: this is a key area of negotiation;
• Immigration rights: A major area of uncertainty for employers and workers is immigration and whatever regime is to take the place of EU freedom of movement. This is a key issue for the current government in its planned negotiations for a new relationship with the EU; and
• Human rights at work (see box on page 22).
Some individuals will have separate private contractual rights that match or exceed the original EU right. These will remain in place until they are changed, whatever legislative changes are made. Any change must be by agreement. Where a union is recognised, that agreement should be reached through collective bargaining (see Chapter 5).
The “Brexit” vote also has important constitutional implications for the devolved nations, especially Scotland and Northern Ireland, including implications for the employment regimes of both countries.