WHAT DOES THE NEW VERSION OF BREXIT MEAN FOR WORKERS’ RIGHTS?
04 / 11 / 2019
Workers’ rights are not protected under the Withdrawal Agreement 2019, nor are they protected under the European Union (Withdrawal Agreement) Bill 2019-20. This is due to a combination of the facts that: (i) the level playing field provision, which under pins obligations in relation to workers’ rights, and which was in the Withdrawal Agreement 2018, has been relegated to the Political Declaration, so is not legally binding on the UK; (ii) the workers’ rights sections of the Bill do not come into force if the Bill becomes an Act, rather they may be introduced at a later date if the Business Secretary so decides; and (iii) there is no obligation on the Government, under the Bill, to avoid introducing legislation that dilutes or removes workers’ rights.
The referendum on Brexit raised the issues of: sovereignty, control of our borders, ability to trade with the “tiger” economies of the US, China and Asia and removing red tape and unnecessary regulation that (allegedly) holds back our economy; there was even talk of London becoming “Singapore on the Thames”.
As Brexit (eventually) drew closer – under Prime Minister May in October/November 2018 and under Prime Minister Johnson in September/October 2019 – the message was all about leaving but, in doing so, ensuring that the UK would not derogate from its environmental, tax, state aid and worker protection obligations. Under Prime Minister May, this obligation was enshrined in her Withdrawal Agreement dated 14 November 2018 (WA 2918), which incorporated, as part of the “backstop” solution, contained in the Protocol on Ireland and Northern Ireland, the requirement that the customs territories of the EU and the UK would become a Single Customs Territory (SCT).
The SCT would have required:
(i) the UK to align its tariffs and rules applicable to its customs territory to the EU’s external tariffs and rules of origin;
(ii) there to be no tariffs, quotas and checks on rules of origin between the EU and the UK, with the exception of fishery and aquaculture products;
(iii) the Union to apply its trade defence policy and…. to both parts of the SCT…; and
(iv) the EU and the UK to have agreed on level playing field commitments and appropriate enforcement mechanisms to ensure fair competition between the EU 27 and the UK.
Point (iv) above was specifically required by the EU and inserted into the WA 2018 so as prevent the UK making London into a “Singapore on the Thames”, right on the borders of the EU.
As far as workers’ rights were concerned, under the WA 2018, the level playing field commitment resulted in the principle of non-regression from current levels of protection under the EU and international standards being a legally binding obligation.
Withdrawal Agreement 2019
Skip on to the Withdrawal Agreement 21 October 2019 (WA 2019), and what is the position in relation to labour laws?
Much of the WA 2018 remains, but there are some very important changes:
(i) reference to a customs union between the UK and the EU has gone; and
(ii) the level playing field provision has now been deleted from the WA 2019 and inserted in the Political Declaration.
The effect of placing the level playing field provision in the Political Declaration is that it is no longer a legal obligation on the UK and the EU to create a base level of standards for labour rights which was set out in the WA 2018 – the same is true for the environment, tax and state aid rules. The protections for workers that the level playing field obligation enshrined, is now set out in the non-legally binding Political Declaration at Article 17, which says (emphasis added):
“… this partnership will be comprehensive, encompassing a Free Trade Agreement, as well as wider sectoral co-operation where it is in the mutual interest of both Parties. It will be underpinned by provisions ensuring a level playing field for open and fair competition, as set out in Section XIV of this Part. It should facilitate trade and investment between the Parties to the extent possible, while respecting the integrity of the Union’s Single Market and the Customs Union as well as the United Kingdom’s internal market, and recognising the development of an independent trade policy by the United Kingdom.”
Article 17 is, arguably, “beefed up” in Section XIV, Article 77, which says (emphasis added):
“Given the Union and the United Kingdom’s geographic proximity and economic interdependence, the future relationship must ensure open and fair competition, encompassing robust commitments to ensure a level playing field. The precise nature of commitments should be commensurate with the scope and depth of the future relationship and the economic connectedness of the Parties….”
However, the point remains that the Political Declaration does not create binding legal obligations on the UK.
European Union (Withdrawal Agreement) Bill 2019-20
This lack of a binding legal obligation concerning workers’ rights, is reflected in the terms of the draft European Union (Withdrawal Agreement) Bill 2019-20 (EWAB), that the Government published on 21 October 2019.
The way in which workers’ rights are dealt with under EWAB is opaque and confusing: clause 34 inserts a new Section 18A and a new Schedule 5A into the European Union (Withdrawal) Act 2018 (EUWA). The new Section 18A will give effect to the new Schedule 5A, and the new Schedule 5A is contained in Schedule 4 to EWAB.
Furthermore, under Section 40 Extent, Commencement and Short Title, at Section 40(7), it is made clear that the provisions relating to workers’ rights are not brought into force on the day on which the Act is passed (the provisions are not listed in Section 40(6)), rather they will come into force “on such day as a Minister of the Crown may by regulations appoint; and different days may be appointed for different purposes”. If a Johnson Government gets a working majority after an election, the workers’ rights provisions could be (in)conveniently forgotten by the Business Secretary. This is notwithstanding, Prime Minister Johnson, in his interview with Robert Peston on 18 October 2019, insisting that his Withdrawal Agreement would not signal a “race to the bottom”. He said he could reassure MPs who are worried about the potential erosion of employment rights in his Bill (EWAB) and said:
“We can do all things differently to a higher standard and our aspirations to high levels of protection will be enshrined in the Political Declaration”.
“The Withdrawal Agreement Bill will, almost certainly, contain the kind of protections and provisions you are talking about”.
But, is this really the case?
EWAB Schedule 5A – Workers’ Retained EU Rights
Schedule 5A, Part 1, Section 1, requires (akin to a statement of compatibility under Section 19 Human Rights Act 1998) a Minister of the Crown, in charge of a relevant Bill, in either House, before the Second Reading of the Bill, to make a statement:
(i) that in the Minister’s view the provisions of the Bill will not result in the laws of England, Wales or Scotland failing to confer any workers’ retained EU right – called a “statement of non-regression”; or
(ii) that, although the Minister is unable to make a statement of non-regression, the Government nevertheless wishes the House to proceed with the Bill.
Before making the statement at (i) or (ii) above, the Minister must consult with the representatives of workers, employers and “any other persons whom the Minister considers appropriate to consult” (Part 1, Section 1(3)) – unless such consultation is not practicable by reason of “urgency” or “the statement is being made before the Second Reading of the Bill in the Second House (Lords) and the Bill was not amended in the First House (Commons)“ (Section 1(4)).
Significantly, the duty to make a statement about non-regression/regression only applies to Government Bills; it will not apply to Private Member Bills or Statutory Instruments.
EWAB Schedule 5A, Part 2 – New EU Workers’ Rights
EWAB, Schedule 5A, Part 2, Section 2(1) requires the Minister of the Crown (the Business Secretary) to:
(a) produce a report “as soon as practicable after the end of each reporting period”;
(b) publish the report; and
(c) lay copies before Parliament.
The reports must:
Section 2(2): state that no new EU workers’ rights have been published by the EU during the relevant reporting period; or
(a) state that one or more new EU workers’ rights have been published by the EU during the relevant period; and
(b) in relation to each new EU right, whether the laws of England, Wales and Scotland confer a “workers’ right of the same kind as the new EU workers’ right” – under the Bill called a “statement of non-divergence”; or
(c) a statement that the Minister is unable to make a statement of non-divergence.
Section 2(4): if the Minster’s report is unable to make a statement of non-divergence, the Minister must say:
(a) whether or not the Government intends to take any action in respect of the new EU workers’ right; and
(b) if it does, a statement describing the action which it is intending to take.
Again, before producing the report, the Minister must (Section 2(6)) consult representatives as set out above in relation to the statement of non-regression and within 28 sitting days of the report being laid, the Minister must make arrangements for motions to be moved in both Houses approving the report (Section 2(5)).
Part 2, Sections 2(7) and (8) define the length of the “relevant reporting period”. The first report will have to be laid 6 months after the end of the transition period – called the Implementation Period under the Bill. After that, the reporting period will e a maximum period of 12 months, but that period can be cut short depending on whether new EU workers’ rights are published.
However, the point is that the Government is free to decide to allow regression/divergence of works rights.
EWAB Schedule 5A – Part 3 – Interpretation
“Workers’ Retained EU Rights” means workers’ rights of the kind which:
(a) immediately before the end of the transition period (referred to as “IP completion day” under the Bill), the United Kingdom was obliged to confer by virtue of the EU Directives listed in the table in paragraph 4 to the Bill; and
(b) continue to have effect (by virtue of this Act and as modified by any provision made by or under this Act or otherwise) in the law of England and Wales or Scotland – i.e: they form part of retained EU law.
EWAB Schedule 5A – Part 3, Section 3(1) also defines “New EU workers’ rights” being any workers’ rights:
(a) which the UK is obliged to confer by an EU Directive published in the Official Journal of the European Union on or after the transition period; or
(b) that are conferred by an EU Regulation published in the Official Journal of the European Union on or after the end of the transition period.
EWAB Schedule 5A, Part 3, Section 4(1) contains a comprehensive list of EU Workers’ Rights Directives, but this list does not include the following: (i) Insolvency Directive (2008/94/EC),(ii) the Directive on Equal Treatment between Men and Women in Self-Employment (2010/41/EU), nor does the list include (iii) Directives that have been entered into force but whose implementation deadlines have not yet passed, including: (a) the Directive on Posting Workers in the Framework for Services ((EU) 2018/957), (b) the Directive on Transparent and Predictable Working Conditions ((EU) 2019/1152) and (c) the Directive on Work Life Balance for Parents and Carers ((EU) 2019/1158).
The EU also anticipate publishing new Directives during the transition period, for example the proposed Directive on Whistleblowing. If it does, the Government will not have to align the law of England and Wales or Scotland with any such new Directive – rather, it will just say in its report (see above under “New EU Workers’ Rights”) that it is unable to make a statement on non-divergence.
Under Section 4(2), the Minister (Business Secretary) will be able to make regulations to modify the list of Directives in Section 4(1). This could enable the Minister to reflect any changes in EU law that occur before the end of the transition period, but there is no obligation on the Minister to do so.
The devil is certainly in the detail of EWAB (as, no doubt, you will appreciate if you have managed to wade your way through this synopsis of just the provisions relating to workers’ rights). Undoubtedly, the protections that were enshrined in Prime Minister May’s WA 2018 have been watered down, by having been: (i) relegated to the Political Declaration, (ii) excluded from immediate implementation on the passing of EWAB into an Act (EWAB s40(7) above) and (iii) because, during the transition period and afterwards, the Government of the day, if it has a working majority, can effectively pay no heed to any workers’ retained EU rights, or new EU workers’ rights.
The point to note is that there is no obligation on the Government/Minister to avoid either regressive and/or divergent legislation in relation to workers’ rights; indeed, the Minister may, as noted above, simply decline to bring the provisions of the Act (assuming that EWAB becomes an Act) concerning workers’ rights into effect. Even if the provisions are brought in, workers’ rights will be dependent on the votes in Parliament as to whether or not regressive and or divergent legislation is passed in the future that dilutes/removes rights that workers currently enjoy.