EU Referendum Briefing 6: A Bonfire of Rights? EU Employment and Equality Law after Brexit

ORIGINAL PUBLISHED ON EU LAW ANALYSIS

by  Steve Peers

It’s been suggested that there would be a ‘bonfire of rights’ if the UK left the EU – in particular rights relating to employment and equality. As a response, some have suggested that the EU has nothing to do with employment and equality law in the UK – that all such rights are actually home-grown.

As I will demonstrate in detail in this blog post, it is undeniably the case that EU law has significantly raised the level of employment and equality rights in the UK – particularly as regards equality for women in the workplace.

My study of all the cases reaching the EU court concerning UK law on these issues shows that 60% of all the EU court cases about equal treatment of women in Britain resulted in a finding that UK law breached EU law – therefore raising the standards of protection for women in the workplace. 62% of the other cases on workers’ rights led to the same result.

As for what would happen in the event of Brexit, we cannot be absolutely certain – but a large number of the most prominent supporters of Brexit have admitted in detail their intention to lower those standards.

I’ll first summarise the main points, and then set out the facts in detail.

Summary

The EU has not set uniform standards on every aspect of employment and workplace equality law – and it never will.  Its role, according to the Treaties, is to set minimum standards in certain areas of employment and equality law. So where the EU hasn’t acted at all – such as on zero hours contracts, trade union laws or minimum wages – Member States can do as they like. The blame (or credit) for the choices which the UK makes on those issues must go entirely to this country’s government.

On the other hand, where the EU has acted – such as on holiday pay and equality in the workplace – Member States can set higher standards, but not lower ones. The EU rules in effect set a floor below which Member States can’t go; but there is no corresponding ceiling.

It’s been argued during the referendum that because the UK has sometimes adopted laws on certain employment or equality issues before the EU did, the EU therefore added nothing. This argument profoundly misunderstands the law in this area. Just because the UK put the Equal Pay Act on the statute books before it was covered by EU laws on equal pay for men and women doesn’t mean that those EU laws had no added value. That’s because British laws in this area have often contained many exclusions or exceptions, and EU law has often removed them.

In this blog post, I prove that point by looking at every single ruling of the EU court concerning UK law on employment or equality issues. As I noted in the introduction in 60% of cases, regarding women’s equality at work, and 62% of other workers’ rights cases, UK law fell below EU standards.

In practical terms, this increased protection regarding (among other things): equal pay for work of equal value for women; protection at work during pregnancy and maternity leave; better protection of pensions when an employer goes broke; and extension of paid holidays to include more workers.

However, a significant number of the relevant laws have been targeted for removal by serious supporters of Brexit.

In conclusion, European Union law has significantly increased the level of protection in a number of areas of employment and equality law. Leaving the EU would not automatically mean that those protections are lost, but they would no longer be guaranteed – and many of the most senior figures supporting Brexit have expressed their intention to remove some of them.

Detailed analysis

The following analysis looks at (a) the main features of EU involvement in employment and equality law; and (b) the prospect of the rules stemming from EU law being repealed after Brexit.

Mainly the EU’s impact in this area has been in the form of laws that set minimum standards on some workers’ rights issues, and on discrimination against workers on some grounds. EU law also bans discrimination outside the workplace on grounds of sex or race. In a lot of these areas, the UK had its own laws beforehand. For instance, the Race Relations Act dates back to 1965. However, there have been some areas where UK law changed because of a new EU law which the UK implemented, or because of a ruling of the EU courts, or the UK courts interpreting EU law. A complete list and summary of all the relevant EU court cases is set out in the Annex. Some of the key cases are discussed further in the main part.

While some argue that the rights concerned anyway derive from Conventions (international treaties) agreed within the framework of the International Labour Organisation (ILO), ILO treaties are not enforceable in British law. The very fact that the EU court has ruled on UK breaches of EU employment and equality law proves that the existence of ILO treaties does not by itself guarantee employment or equality law protection in individual cases.

Employment law

The EU does not deal with every employment law issue. In fact, it can’t. The EU treaties rule out any EU laws on pay or trade union rights. So there are no EU laws on those issues, although in some cases the EU has an indirect impact on these topics.  There are also some areas where the EU could act if all Member States agreed, such as rights on the termination of employment. But it is hard to reach unanimous agreement on employment law issues, and so there are few laws in these areas either.

What topics does EU law address? First and foremost, there are a number of EU laws on health and safety. The most prominent of these is the law on working time, which guarantees a minimum amount of four weeks’ paid holiday. Although the UK had a law in force on this issue before the EU law, it did not guarantee paid holidays for all workers. The EU court case law has specified in particular that the UK has to ensure paid holidays for fixed-term workers (BECTU), and to include allowances (Williams) and commissions (Lock) in holiday pay.

Next, there are EU laws on major changes to workers’ employment contracts. In particular, there are EU laws on three issues: rights in the case of mass redundancies; rights when an employment contract is affected by the transfer of the employer; and rights when a business goes broke.

The mass redundancies law doesn’t ban or limit the grounds for redundancies, or provide for rules on redundancy payments – so the UK and other EU countries can regulate those issues however they want to. First and foremost, this law it sets out a waiting period before large numbers of redundancies can be made, once the employer has decided in principle to make a lot of its workers redundant. The employer must give a detailed explanation of its plans to the workers who are set to lose their jobs. During the waiting period, the workers’ representatives and the employer must hold discussions with a view to helping as many affected workers as possible, for instance by saving jobs or retraining. If the employer fails to do this then there must be some form of sanction.

The EU court has ruled that the UK had not applied this law properly when it said that employers only had to consult the workforce when there was a trade union recognised by the employer. This was a breach of the EU law because that law required workers to be consulted about mass redundancies whether there was a trade union representing the workforce or not, and whether the trade union was recognised by the employer or not. Also the UK had not provided enough of a sanction for employers who breached the law. While employers were in principle subject to a fine for breaking the law, they could deduct it from the redundancy payments which they had to pay to workers anyway.

If a business goes broke, EU legislation provides that a minimum amount of workers’ back pay which may be owing at the time of insolvency has to be guaranteed. This law also requires a basic protection of occupational pensions where businesses go broke. The key EU court case of Robins said that the UK was not doing enough to protect pensions in such cases. British law was changed as a result.

Another issue addressed by EU law is so-called ‘atypical work’. This refers to work which is different from the traditional full-time open-ended contract with one employer. In particular, there are different EU laws for three types of atypical work: part-time work, fixed-term work and agency workers. There are no EU laws on ‘zero-hour’ contracts or internships, however.

Basically these EU laws say that the atypical workers who are covered by them should be treated equally with regular employees as regards their pay and conditions. Also, employers should make it easier for part-time workers or agency workers to join the regular workforce, and for full-time workers to switch to part-time work if they wish.  For fixed-term workers, there must be limits on the number of times a contract can be renewed over and over, to protect against exploitation.

Finally, another issue addressed by EU laws is worker consultation and information. There is both a general law on worker consultation and information in large companies, and a specific set of rules of ‘European works councils’, which applies to multinational companies with over 1000 employees across the EU. These laws allow the employers and the workforce to reach alternative arrangements if they wish. There are no EU rules requiring small businesses to inform and consult their workers, except in the special case where the employee contracts are transferred.

Discrimination law

There are EU laws banning discrimination on six grounds: sex, race, age, disability, religion and sexual orientation. The laws on sex and race discrimination go beyond employment, and also ban sex or race discrimination in access to goods or services, like insurance. However, the laws on the other four grounds only extend to discrimination in employment.

These laws ban direct discrimination, ie discrimination purely based on someone’s age, race, sex, etc. However, they also ban indirect discrimination: unequal treatment for another reason, but which mostly affects people of a particular age, sex, etc. For instance, unequal treatment of part-time workers will affect both male and female workers, since there are some men working part-time. But it mostly affects women, since they make up the majority of part-time workers. So it would be an example of indirect sex discrimination, although since the adoption of an EU law devoted to the issue of part-time workers (see above in this chapter), the sex discrimination angle is no longer as relevant.

How do these laws affect the UK? As noted above, the UK usually had laws on these issues before the EU did. However, the EU laws have had an impact on some of the details that are important to large numbers of individual cases.

Looking at the case law of the EU court, there have been important rulings which improved UK standards in particular on:

  • equal pay for work of equal value;
  • prohibiting the dismissal of women earlier than men due to retirement age difference;
  • effective remedies (removing the cap on damages for sex discrimination);
  • dismissal due to pregnancy;
  • equal treatment after returning from maternity leave; and
  • dismissal of transsexuals.

Effect of Brexit

Leaving the EU has no automatic effect on employment law. But a number of Brexit supporters, including cabinet ministers like the employment minister, havespecifically stated that they want to use the opportunity that Brexit would create in order to remove protections guaranteed by EU law.

In particular, in their own words, they aspire to scrap the laws on:  collective redundancies; atypical workers; working time (including paid holidays); driving time limits for the self-employed; rights for pregnant workers and women on maternity leave;  and worker consultation rights.

For his part, Nigel Farage has argued that women who have children are ‘worth less’ to an employer.

It should be noted that changes like these would not even have to go through as an Act of Parliament – Vote Leave supporters plan to fast-track the abolition of EU laws after Brexit.

Conclusion

As we have seen, EU law has had a demonstrable impact on UK employment and discrimination law. It is not the source of all UK law but it definitely provides protection which would not otherwise exist in certain areas, such as holiday pay and equality for women in the workplace. It is highly likely, based on the expressed intentions of senior supporters of Brexit, that there would be a ‘bonfire’ of some of these rights after Brexit.

Further reading:

Analyses of EU effect on UK employment law by:

 

Annex

EU court cases: UK employment and equality law

The following is a list of all EU court cases involving UK employment and equality law. I have grouped them by topic and indicated for each case what the subject matter was, and whether the UK law was in breach of EU law or not in each case.

Equality at work – 32 breach, 23 no breach: breach of EU law in 55% of cases
(Sex equality: 32 breach, 21 no breach: breach in 60% of cases)
Burton – no breach – sex discrimination – voluntary redundancy
Garland – breach – art 119 – after-work benefit
Jenkins – breach – art 119 – part-time work
Worringham – breach – art 119 – pension contributions
McCarthys – breach – art 119 – previous employee
Commission v UK – C-165/82 breach – sex discrimination – private household, small business
Commission v UK – C-61/81 breach – art 119 – job classification
Johnston – breach – sex discrimination – women on police force
Marshall – breach – sex discrimination – dismissal at retirement age
Roberts – no breach – pension age sex discrimination
Newstead – no breach – pension contributions
Drake – breach – social security directive
Clark – breach – social security directive
Barber – breach – art 119 and occupational pensions
Foster – breach – sex discrimination – dismissal at retirement age
Johnson – no breach – social security directive
Jackson and Cresswell – no breach – income support and sex discrimination
Ex parte EOC – no breach – social security contributions
Smithson – no breach – social security and housing benefit
Neath – no breach – actuarial benefits and occupational pensions
Thomas – breach – social security and invalidity pension
Marshall II – breach – limits on compensation for sex discrimination
Coloroll – breach – occupational pensions
Enderby – breach – Art 119
Birds Eye – no breach – occupational pensions
Bramhill – no breach – social security
Johnson – no breach – social security
Smith v Avdel – breach – occupational pensions
Webb – pregnancy dismissal – breach
Gillespie – art 119 and maternity leave – no breach
Graham – social security – no breach
P v Cornwall CC – transsexual dismissal – breach
Richardson – social security – breach – prescription charges
Atkins – social security – bus concessions – no breach
Meyers – sex discrimination and family credit – breach
Sutton – social security and interest – no breach
Magorrian – art 119 – breach – time limits
Levez – sex discrimination – breach – remedies
Grant – sex discrimination – no breach re sexual orientation
Boyle – pregnancy – breach in part
Brown v Rentokil – pregnancy dismissal – breach
Sirdar – women in military – sex discrimination – no breach
Coote – sex discrimination – breach – remedies
Seymour-Smith – sex discrimination – no breach
Preston – sex discrimination – breach
Hepple – social security – no breach
Taylor – social security – breach – winter fuel
KB – transexuals and pensions – breach
Allonby – equal pay – (mostly) no breach
Alabaster – maternity leave and pay rise – breach
Cadman – art 119 – no breach
Richards – transsexual and pension – breach
Coleman – disability discrimination – breach
Age Concern – age discrimination – no breach
CD – surrogate mothers and maternity leave – no breach
 

Employment law: 13 higher standards, 7 no breach, 1 lower standard: 62% higher standard
Comm v UK – breach – collective redundancies
Comm v UK – breach – TUPE
Everson – insolvency – breach
Allen – TUPE – breach
BECTU – working time and fixed-term work – breach
Bowden – working time and transport work – no breach
Martin – TUPE and early pensions – breach
Celtec – TUPE and transfer date – breach
Robinson-Steele – working time and ‘rolled-up’ holiday pay – breach
Comm v UK – working time – breach
Comm v UK – health and safety – employer liability – no breach
Robins – insolvency and pensions – breach
Stringer – working time and sick leave – partial breach
Williams – working time and allowances  – breach
Nolan – collective redundancies and US airbase – no breach
Alemo-Herron – TUPE – breach (but case in favour of employer)
Lock – working time and commissions – breach
Lyttle – collective redundancies – no breach
USDAW and Wilson – collective redundancies and Woolworths – no breach
O’Brien – part-time work – breach
Greenfield – part-time work – no breach
Viking Line – trade unions and freedom of establishment – not included in stats; case left to national court to decide, then settled

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