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How Will the Post-Brexit Trade Deal Affect UK Employment and Immigration Law?

on Friday, 15 January 2021.

On 24 December 2020, the UK and EU finally agreed a trade deal, in the form of the Trade and Cooperation Agreement (TCA). Both sides immediately moved to claim they had been victorious in the negotiations…

…as reflected in the UK Government's summary of the trade deal and the European Commission's explanatory brochure. While the deal covers many areas, this article will look at the main issues affecting employers: employment law and immigration.

Level Playing Field Commitments

Part Two of the TCA contains 'level playing field' commitments designed to prevent either party seeking a competitive advantage in various regulatory areas including:

  • fundamental rights at work
  • occupational health and safety standards
  • fair working conditions and employment standards
  • information and consultation rights at company level
  • restructuring of undertakings.

Both the UK and EU have agreed to not weaken or reduce labour and social levels of protection (employment rights) below the standards in place as at 31 December 2020 in a manner which affects trade or investment.

However, the agreement is clear that the UK now has some flexibility to diverge away from EU employment laws, provided "the divergences" are not so significant that they affect trade or investment. The EU may, within certain constraints and subject to an arbitration process, apply "appropriate rebalancing measures" - including tariffs - in response to significant divergences.

There are also separate commitments in the road transport section of the TCA to comply with rules on working time, rest and break periods for drivers transporting goods between the UK and EU.

In spite of the commitments in the TCA the Government have already been forced to deny reports that they are considering diluting workers' rights, including removing some of the protections in the Working Time Regulations.

What About EU-Derived Laws?

These will not be affected immediately due to the "saving provisions" in the EU Withdrawal Act 2018. This means that legislations such as TUPE and the Working Time Regulations will stay in force but must continue to be interpreted in conformity with the relevant EU law.

The Court of Appeal and Supreme Court are no longer required to follow existing (ie pre-2021) Court of Justice of the European Union (CJEU) decisions and are now free to diverge from CJEU decisions. An early indication of the extent to which the UK Supreme Court is prepared to do this will be found when judgment is handed down on the holiday pay cases which are to be heard this year.

Although the UK is not explicitly required to comply with any employment protections which the EU may introduce in the future, the rebalancing provisions are also relevant here. If the UK does not have in place measures which are broadly equivalent, the EU may seek to apply rebalancing measures, but only if they have evidence that the resulting disparity materially impacts trade or investment.

Forthcoming EU directives which may test these provisions come in the form of the Whistleblowing Directive, the Transparent and Predictable Working Conditions Directive, and the Directive on Work-Life Balance for Parents and Carers. Given existing and proposed regulations in the UK, it seems unlikely that these are areas where there would be sufficient divergence from the EU's regime, such that the rebalancing measure might be applied, but much will depend on the Government's agenda for post-Brexit employment provisions. The Government has consistently stated that it does not intend to reduce workers rights as a result of Brexit.

Key Changes to UK Immigration Law

Given the Government's desire to "take back control" of the UK's borders, it is unsurprising how little the TCA deals with the movement of people between the UK and EU. Nevertheless, there were some changes which required a Statement of Changes to the UK's Immigration Rules to be published on 31 December and come into force at the moment the post-Brexit transition period ended.

None of the changes are likely to make a huge difference to UK employers. The main change has been to the International Agreement Worker route, which is a category with various subdivisions based on agreements between the UK and other countries, such as employees of overseas governments coming to work in the UK on a temporary basis.

Under the "contractual service supplier" and "independent professionals supplying services" sub-categories the maximum length of stay is for six months, but to comply with the TCA, that has now been increased to 12 months for EU nationals (and Swiss nationals and permanent residents under a separate agreement between the UK and Switzerland).

In addition, commitments made in the TCA have resulted in the following permitted activities being added to Immigration Rules for visitors to the UK:

  • visitors may conduct market research or analysis in the UK for their employment overseas;
  • researchers can conduct independent research for their employment overseas; and
  • translators and/or interpreters will be able to translate and/or interpret in the UK as an employee of an enterprise overseas.

Surprisingly though, these changes to the visitor rules apply to visitors from all countries not just EU nationals.

Coronavirus guidance employers

For more information on changes to employment and immigration laws post-Brexit, please contact Michael Halsey in our Employment Law team on 07554 432829, or fill in the form below.

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