By Prof Michael Ford QC, Professor of Law (University of Bristol Law School).
It is now pretty well-known that most of the employment rights in the UK are guaranteed by EU law—the principal exceptions are unfair dismissal and the national minimum wage —as I explained in a recent advice for the TUC. UK legislation on race discrimination, sex discrimination, equal pay and disability discrimination may have pre-dated EU Directives in these areas, but EU law led to protection against other forms of discrimination, such as detrimental treatment owing to age, sexual orientation and religion and belief. Over the years EU law has greatly supplemented or overwritten the domestic regime, almost always in favour of workers’ rights – removing limits on damages, recognising that pregnancy discrimination did not need a comparator, changing rules on the burden of proof, allowing equal pay claims for work of equal value, protecting against harassment and post-employment victimisation. I could go on.
Now extending far beyond discrimination, the EU-guaranteed rights include almost all the working time protections, including paid annual leave and limits on working hours; the protection of agency, fixed-term and part-time workers; rights on the transfers of an undertaking (extremely significant in a world dominated by out-sourcing); many rights to information and collective consultation; the most important health and safety regulations; the right to a written statement of terms of employment; protections in insolvency derived from the EU Insolvency Directive, which led to important extensions to the state guarantee of pension benefits and protection of other claims where the employer is insolvent (no doubt to be in play in relation to British Home Stores); and EU data protection law, the driving force behind the Information Commissioner’s Employment Practices Code, providing some controls over the monitoring and surveillance of workers.
Though the EU Charter of Fundamental Rights has thus far not had the radical effect some anticipated, the EU principles of effectiveness and equivalence remain very important constraints on the current and previous Governments’ drive for a ‘flexible’ labour market—effectively stopping proposals to cap damages for discrimination, as the last Government conceded in its Employment Law Review. Apart from the national minimum wage and a few other rights which cost employers little, such as the right to request flexible working, almost all the significant working rights in the last 20 years have come from Europe. The domestic interventions in areas not governed by EU law have mostly been in the opposite direction, exemplified by the introduction of prohibitively high fees for bringing tribunal claims, the reduction of the maximum compensatory award for unfair dismissal to one year’s pay, the restriction on deductions from wages claims to two years’ loss instead of six, and the passage of the Trade Union Act 2016, adding further to the labyrinthine domestic rules restricting strikes.
Freed from EU law, a post-Brexit Government would have pretty much a complete legal freedom to remove whatever rights it wanted and, unencumbered by EU principles on effective remedies, to put in place whatever other obstacles to or limits on claims it wished. The more difficult question is which rights or remedies are factually vulnerable in the event of Brexit, as lively debates on Twitter attest. None of the rights is in the sights of the Labour Party: on the contrary, a central theme in its resistance to Brexit is a fear of a ‘bonfire’ of workers’ rights. Some of the targets of a future Conservative administration, no doubt dominated by a reinvigorated Right of the party, can be gleaned from existing policy documents and public statements. Capping damages for discrimination, already signalled by the last Government as a desirable reform in consultation documents were it not for EU law, is an obvious target, in keeping with other interventions of the same Government to limit employer’s potential or perceived liabilities, including the removal of civil liability for breach of health and safety regulations (reversing a rule dating back to the 19th Century) and the 12-month salary cap on unfair dismissal compensatory awards. The neo-liberal ideology remains as influential as ever, illustrated by the recent report of Policy Exchange, the unacknowledged driving force behind the Trade Union Act 2016.
Recent declarations by Michael Gove on the Today programme and Boris Johnson in a speech for the leave campaign that EU regulations cost £600 million a week were based on a report issued by the Open Europe think-tank. High on the Open Europe ‘top 100’ hit list were those perennial subjects of right-wing vitriol, working time rules (said to cost the UK more than £4 billion a year – with an annual benefit of zero) and the agency worker regulations (annual cost estimated at about £500 million a year: what is it about agency workers that the Conservatives hate so much?). Other targets were parental and maternity leave regulations (a snitch at £60 million a year), changes to harassment flowing from EU law (£180 million), along with various health and safety regulations (e.g. control of asbestos regulations costing £23 million a year, with an estimated benefit of….zero). The assumptions behind this cost-benefit analysis are unclear, but the fundamental point is obvious: rules protecting workers cost business money. A similar group, Economists for Britain, identified removing gender equality and working time rights, along with changes to health and safety rules, as some of the main benefits of Brexit.
Meanwhile other similar proposals are bobbing around in the Right of the party. The Tory MP, Christopher Chope, recently introduced a Bill in Parliament which would, in essence, remove working time rights from any employee who ‘agreed’ to it (adding, for the avoidance of doubt, that there should be no rights to annual leave or pay in respect of it). The PM’s former advisor, Steve Hilton, recently complained to the Daily Mail about the constraints of the EU on employment laws, and readers with good memories will remember his proposal to remove maternity rights. In a speech to the Institute of Directors, Priti Patel, the Minister who recently compared Brexiteers to the suffragettes, said that leaving the EU and halving the burden of EU social and employment law could save £4.3 billion a year.
The logic of the Brexiteers’ position is that labour market deregulation is one of the principal benefits of leaving the EU. Take away EU rules on effective remedies and sanctions, and the sky (or floor) is the limit. The UK, which currently has the third most lightly regulated labour market among developed countries according to the OECD, could soon be in the gold medal position if the Brexiteers get into power.