The FCA – Transformation to Assertive Supervision
The UK’s marriage to the EU has, after over forty years, almost reached the decree nisi stage and Mrs May was spotted holding hands with her new partner. The Bill authorising her to give notice still needs to run its course through Parliament but the outcome is inevitable.
Despite the Government’s aim to cease to be in a single market and to maximise the control of the UK Parliament, change is not likely to be quick and brutal. The White Paper published by the Government, on which my colleague James Murray reported here, envisages the Great Repeal Bill preserving the existing legal position, so that at the moment following Brexit the EU-derived law will be the same as it will be the moment before Brexit, but with the ability of Parliament to amend or repeal such laws over time as it sees fit.
More specifically, Mrs May has been promising that workers’ rights are to be preserved. The promise is clear.
Doesn’t that promise mean that concerns about Brexit aired by workers and unions are unjustified?
Doesn’t that mean that businesses hoping that Brexit will allow them to avoid some of the EU workers’ red tape are going to be disappointed?
No. It does not. Because her promise has no lasting effect.
I don’t say this out of a lack of trust for our Prime Minister, or because walking hand in hand with the USA will inevitably move us towards a hire and fire employment-at-will labour market. Whether you are pleased by her promise or not, I actually believe she means what she says.
However, in James Murray’s blog mentioned above, he explains that the White Paper itself warns that employment law will adapt to a “changing labour market” and “new economic model”. Why would the White Paper say that if the promise was forever?
If that great big hint was not enough, there is more to come. Possibly the biggest impact on workers’ rights will come not from the Great Repeal Bill, and not from a political agenda but from a sentence in the White Paper:
“We will bring an end to the jurisdiction of the CJEU [European Court of Justice] in the UK.”
The impact of the CJEU in the employment field has been, and continues to be, enormous. By way of an example, there are tens if not hundreds of thousands of cases on hold in our employment tribunal system because the CJEU ruled on how holiday pay should be calculated, changing many years of accepted practice in the UK [read more on this here] .
The chronology tends to be as follows: the EU passes a law; the UK implements it; the UK courts follow the UK law; the CJEU then interprets the EU law in a way that had not been anticipated by the UK Parliament or courts; the UK courts then have to change their interpretation, including rewriting the legislation, in order to interpret the CJEU decision. And because it is interpreting laws already in place, it has retrospective effect.
Almost without exception, the CJEU interpretation has been more worker-friendly than that of the UK courts. The CJEU has been an advocate, enforcer and author of growing EU social policy.
There are a number of alternative ways to bring an end to the jurisdiction of the EU on Brexit:
The sudden exit or the middle ground would mean that the worker-friendly CJEU would start losing its power from the moment of Brexit.
The slow exit appears politically unacceptable as it would be interpreted by Brexiteers as meaning that the UK has not taken back control. The slow exit is not what the White Paper promises.
Therefore, it is inevitable that workers’ rights will reduce on Brexit as a result of the withdrawal of the CJEU’s jurisdiction. Take away the worker-friendly CJEU and UK workers’ rights will fall behind EU workers’ rights without the Government actually having to do a thing.
In other words, Mrs May’s promise on workers’ rights fails.
But we still have over two years to go – possibly more. In the short period of time that has passed since the White Paper, the chief negotiator of the EU Parliament has said that transitional arrangements for Brexit will delay the UK ceasing to be bound by the CJEU until much later than 2019. Negotiations with the EU institutions are going to be tougher for the Government than the passage of the Brexit Bill through the UK Parliament. In the words of the sole Conservative rebel – Kenneth Clarke - in The Guardian earlier this month:
“If you actually encounter any person who says that he or she can predict what is going to happen in the next 12 months, then he or she is by definition an idiot.”
Other lawyers from Kingsley Napley will be commenting further on Brexit-releated matters, so follow our Brexit blog for the latest commentary.
Should you have any questions about the issues covered in this blog, please contact a member of our employment team.
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