Employment Law in 2021: What can we expect from a Post-Brexit review of UK workers’ rights?

11 February 2021

The recently appointed business secretary Kwasi Kwarteng has denied reports that his department intend to rethink the rules regarding workers’ rights including the 48-hour workweek brought in under EU law.

It comes after the Financial Times published an article reporting on the package of deregulatory measures currently being prepared by the UK’s business department with the approval of Downing Street. While ministers had not yet agreed to the proposals when the article was published, the plan had been floated to select business leaders to gauge their views on the subject.

What’s on the table?

The key headlines from the FT’s report suggested an upcoming shake-up to the working time directive, bringing an end to the 48-hour working week and not including overtime pay when determining holiday pay for employees. The article further indicated the government’s intention to remove the onus on employers to log the daily reporting of working hours which would apparently save around £1 billion. This would be a welcome move for many employers, but any drastic changes to recent European case law on holiday pay which states that any commissions and overtime must be included in the calculation would be more controversial.

Were these changes to come into force further into the year, what impact could we expect on businesses and employees? For a start, it’s clear that such plans would not be welcomed by Britain’s trade union leaders. Responding to the FT report, TUC general secretary Frances O’Grady said: “Imagine thinking attacking paid holiday and safe limits on working time is a priority right now.” In the same vein, Len McCluskey, general secretary of union Unite, said no decent government would “launch an attack” on workers’ rights during a pandemic.

What’s the government’s position?

While the department for business has now insisted that they want to protect and enhance workers’ rights and not row them back, it’s fair to say that the current government have been known to keep things in constant review. On that note, Kwasi Kwarteng followed up his denial of the changes to workers’ rights with the announcement on the 19th of January that his department was in fact reviewing how EU employment rights protections could be changed after Brexit., including the working time directive. Speaking to the business, energy and industrial strategy committee, he said:

“I think the view was that we wanted to look at the whole range of issues relating to our EU membership and examine what we wanted to keep, if you like,” he said.

However, he added, the plan was to maintain “a really good high standard for workers in high employment and a high-wage economy. That’s what I’m focusing on. And so, the idea that we’re trying to whittle down standards, that’s not at all plausible or true.”

On the working time directive, Kwarteng said a number of EU countries had opted out of it, adding: “So, even by just following that we are way above the average European standard. And I want to maintain that, I think we can be a high-wage, high-employment economy and a very successful economy. And that’s what we should be aiming for.”

What is the Working Time Directive?

The Working Time Directive governs the hours that employees in the EU can be asked to work. According to the regulations, this must need exceed 48 hours, including overtime. As it stands, radical changes to workers’ rights in relation to working time and holidays is unlikely as it would fly in the face of Conservative manifesto and referendum promises. However, the UK is currently one of only five countries to allow employees the choice to opt out of the 48-hour working week, so it’s not too hard to see the cap on working hours removed entirely.

Of course, it’s worth addressing that, were the UK government to make changes to the Working Time Regulations that had any material impact on its international competitiveness, the EU would retaliate under the terms of the post-Brexit trade treaty. Clearly, the UK’s priority during this time should be to secure a stable trading relationship with the EU rather than cause more disruption. What’s more, any changes that would be to the detriment to worker rights would go against the Conservative’s manifesto and promises to protect worker rights.

What changes to employment law can we expect in 2021?

In December 2019, a new Employment Bill was announced in the Queen’s Speech which is expected to be published in 2021. The measures that the Bill will introduce are wide-ranging, covering everything from tips and service charges to leave for parents with children in neonatal care.

From what we know so far, the Employment Bill is likely to include:

Extension to redundancy protections to prevent pregnancy/maternity discrimination

While there is a common assumption that employees cannot be made redundant while on maternity leave, this is in fact not the case. Current protections exist to prevent employers from making employees redundant because they are on maternity leave. However, since employers must treat all employees equally, those on maternity leave should not be excluded in the pool of possible redundancies simply because they are on maternity leave.

That said, if they are made redundant while on maternity leave, they do have the right to be

placed into an available role within the company for which they have the relevant skills for without having to undergo the formal recruitment process. In addition to the current protection to pregnant employees, the Bill is expected to extend redundancy protection for six months after the woman returns from maternity leave.

Introduction of a single enforcement body for employment rights

The aim of this being to ensure vulnerable workers are aware of their rights and to support businesses in compliance. Consultation closed in October 2019, and no further details of this proposed enforcement body have been revealed, but what we do know is that it would enforce minimum wage, unpaid tribunal awards and the tribunal penalty scheme and regulate statutory sick pay and publicise employment rights.

Introduction of a new right to a week’s (unpaid) leave for employed carers

In a consultation paper released in March 2020, the government proposed the introduction of a right to a week’s unpaid leave a year.  The consultation closed in August 2020 and the government’s response has not yet been published, however, it is likely that this will be included in the government’s anticipated Employment Bill.

Extended leave for neonatal care

Following consultation in 2019, the government published a response last March which confirmed that parents whose children are admitted into hospital as a neonate (28 days old or fewer) will be allowed to take neonatal leave and pay if admission lasts for a continuous period of seven days or more. The level of neonatal pay, however, has not yet been confirmed, but we may see this introduced as part of the Employment Bill.

Making flexible working the default

While the 2019 proposal to make flexible working the default unless employers had a good reason not to failed to complete its passage through parliament, the events of 2020 may see a comeback of this proposed legislation to reflect the challenges of working parents and carers in lockdown. Where previously, many employers still had fears around the impact of introducing flexible working to productivity and were reticent to offer it within employee contract, the pandemic has finally put an end to these preconceptions.

Introduction of legislation to ensure payment of all tips go to workers in full

This was referred to specifically in the Queen’s Speech and would implement the Employment (Allocation of Tips) Bill, with the distribution of tips and service charges supported by a statutory Code of Practice.

Introduction of a new right for all workers to request a more ‘predictable’ contract
No details have yet been published, but this is to address the perceived imbalance of zero-hours contracts.

 

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