Implications for employees

A number of key employment rights derive from EU legislation, in particular those relating to equal opportunities, holiday and working time. A departure from the EU could allow such legislation to be weakened or even repealed. However, would the government take such radical steps?

  • Protections already in place in UK law: Some EU laws merely codify protections that already existed under UK law, for example, equal pay and discrimination protections. It seems unlikely that the government would simply remove these protections.
  • Employer expectations: An influx of changes to UK employment law could result in confusion and uncertainty for employers, in addition to the significant costs arising from complying with the revised regulations.
  • Worker expectations: UK workers have come to rely upon a number of rights that derive from EU law, such as protection against discrimination; family friendly rights; and regulations on working hours. It would be an unpopular move to significantly weaken these rights.
  • Not afraid to take unpopular decisions: In recent times, we have seen the increase in the length of service requirements to obtain unfair dismissal protections as well as the introduction of Employment Tribunal fees, so anything is possible.

 

UK case law

If and when the UK leaves the EU, the UK courts would most likely become the primary decision makers in respect of employment law cases. It is unclear as to how legal precedents set by the European courts would then be determined. In the short-term at least, UK courts and tribunals would be likely to continue to consider European judgments as persuasive, but longer term, UK case law could come to contradict European case law.

Trade

Even if it were to leave the EU, the UK would still continue to play a significant role in trade with the rest of Europe. To do so, the UK will need to negotiate new trade agreements (see ‘Possible post-Brexit models for engaging with the EU’). No doubt these will impose minimum requirements on what UK employers can and cannot do in order to maintain a relatively level playing field with their European counterparts.

Immigration and free movement

One of the key battle grounds in the referendum was immigration. Whilst there is a groundswell for greater controls over the UK’s borders, there is also an acknowledgement that immigration is necessary to help the UK economy grow. At present, EU citizens generally have the right to live and work in fellow Member States. A withdrawal from Europe would likely see that right end and a new agreement negotiated. It is unlikely that this would lead to a mass exodus of non-UK workers but no doubt this area would be tightened.

While this may not impact on existing workers who are likely to be protected under transitional provisions, it may change the landscape of future recruitment with a greater focus on selecting from the UK population and the use of skills tests. EU countries would also be able to impose their own restrictions on UK citizens working in Europe.

The aftermath

Serving notice under Article 50 of the Lisbon Treaty of the UK’s intention to leave the EU is likely to create a frantic two year period during which trade agreements are re-negotiated and new legislation implemented to cover the gaps left by no longer being subject to EU law. Decisions will also need to be taken as to whether judgments by the European Court of Justice would still bind the UK courts.

In the short term, employment laws and rights are unlikely to be dramatically impacted. However, with the shift away from EU laws, medium to longer term change is inevitable.

Expecting staff to work long hours

An employer will be guilty of indirect discrimination if it has in place a “provision, criterion or practice” (PCP) which places an employee at a substantial disadvantage compared to non-disabled employees, and cannot be objectively justified.

 

Facts of the case

In this case, the business did not have an express requirement for employees to work long hours but first asked Mr Carreras to work longer hours and then expected him to work late at least 2 days a week. The result was that Mr Carreras felt obliged to work late. Mr Carreras had recently returned from a serious cycling accident and as a result of the ongoing effect of the accident, was struggling to work the long hours he worked prior to the accident.

 

Decision

The Employment Tribunal (ET) found that there was no requirement to work long hours and so there was no PCP. The EAT disagreed: the expectation that he should work long hours was enough to form a PCP. The ET itself had observed that “he would have considered there were commercial and political reasons why he should work late”.

 

Comment

This case opens the gateway for arguments that working cultures that actively encourage and reward those that work long hours could be discriminatory. This argument could be extended to other types of discrimination, sex discrimination for example.

In this case the expectation to work long hours was made expressly clear by the employer, but in the future we can see the ET sympathising with employees where it is not so obvious.

 

Things to consider

Consider whether your business tends to:

  • Promote or reward those who work long hours;
  • Set targets and a workload that can only be met through a work regime – this may be more difficult for those with physical or mental conditions;
  • Expect employees to read and reply to emails 24/7 – this could be more difficult for those with mental conditions such as depression and anxiety to comply with.

Tips for managing workers

ACAS has published its guidance in light of projections drawn up by Macmillan Cancer Support in 2013 which estimated that by 2020 47% of the population would be diagnosed with cancer at some stage in their life.  With employees continuing to work longer, this issue is likely to become more prevalent for employers.

Employers need to be able to understand the law in relation to life-threatening illnesses and also appropriately manage staff who have these conditions.

 

The law

The Equality Act  2010 (the Act) prohibits discrimination in employment in respect of disability. The definition of disability in the Act is “a physical or mental impairment” which “has a substantial and long-term adverse effect on [that person’s] ability to carry out normal day-to-day activities“.

Under the Act, there are some medical conditions that are expressly deemed to be disabilities from the point of diagnosis, including cancer, HIV and multiple sclerosis. Employees with these conditions are automatically protected against discrimination under the Act.

If an employee suffers from one of these three conditions, or if their condition otherwise falls within the definition of disability, the employer must be careful to avoid:

  • direct discrimination;
  • discrimination arising from a disability;
  • indirect discrimination;
  • failing to comply with their duty to make reasonable adjustments;
  • victimisation; and/or
  • harassment.

Tips for employers

ACAS’s tips for an employer dealing with an employee who has a potentially life-threatening condition include:

  • have an early conversation with the employee to find out whether they want to share their news with colleagues – colleagues may be more understanding about any change in working arrangements if they know what’s happening;
  • discuss the illness with the employee to find out whether there are any reasonable adjustments that could assist them i.e. a change in working hours, type of work or extra time off for medical appointments;
  • meet with the employee regularly to ascertain whether any additional adjustments and/or support is required; and
  • ensure that employees are aware of their workplace rights including sick pay and other benefits that they could be entitled to.

A guide to what happens next

The immediate response in the UK to the referendum result was political chaos and an implosion of effective government and opposition. However, after the earthquake, a new government was quickly formed under Prime Minster Theresa May and a quieter period lies ahead while parliament and the country starts the process of understanding what has taken place, what has stood firm and what needs to be done to rebuild relationships within a re-constructed European settlement.

How the situation will play out is a matter of politics more than law. The EU treaties set out a mechanism (known as Article 50 of the Treaty of the European Union (also known as The Lisbon Treaty) whereby a Member State can indicate its intention to leave and, following that, there must be a negotiation of exit arrangements and the terms of a future relationship (see further below).  It is for the British government to invoke this article and, until that is done and exit arrangements are finalised, the UK remains a full member of the EU with all concomitant rights and obligations and subject to the jurisdiction of the Court of Justice of the European Union. The European Communities Act 1972, which gives domestic legal effect to the UK’s membership of the EU, including giving EU law precedence over UK law in the UK courts, remains in force. Significantly, the UK will have to continue to implement in full all EU law with no ability to cherry pick.

 

Article 50 provides that “Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.”

In theory the outcome of the referendum does not bind the government. Having regard to the political climate, however, the resignation announcement on 24 June of David Cameron as Prime Minister and the statements of the incoming Prime Minister, it seems clear that the UK will serve notice to leave the EU. Mr Cameron said:

The will of the British people is an instruction that must be delivered“.

Article 50 requires a departing Member State to serve notice on the European Council of its intention to exit the Union and then the Union shall negotiate a withdrawal agreement with the departing Member State (the “Withdrawal Agreement”) and a new relationship.

Assuming the UK government does then serve notice on the European Council, the treaties of the European Union will cease to be applicable to the UK from the date of the Withdrawal Agreement or, failing that, within two years of the notification unless we and the Council both agree to extend this period.

 

What is likely to be covered by the Withdrawal Agreement?

The scope of the Withdrawal Agreement can be as broad or as narrow as the negotiators choose.  Some argue that it should be narrow and cover the mechanics of withdrawal and any transition period only, leaving the terms of our future relationship with the EU to be the subject of a separate agreement.  Others argue that the Withdrawal Agreement could be much broader because of the words “taking account of the framework for [our] future relationship with the Union”.  There are different possible models for the UK’s future relationship with the EU (please see ‘Possible post-Brexit models for engaging with the EU’). However, should the UK seek to re-join the EU, it would be subject to the same conditions as any other applicant country and, notably, would have lost its hard-negotiated carve outs from matters such as monetary union.

Note that, whatever the terms of the Withdrawal Agreement, it will have to be compatible with the EU Treaties so it will be subject to adjudication by the European Court of Justice.

The UK government in its report “The process from withdrawing from the European Union” looked at the key issues that would need to be addressed by the withdrawal agreement and the list of issues includes the following:

(i)         unspent EU funds due to UK regions and farmers;

(ii)         cross-border security arrangements, including access to EU databases;

(iii)        co-operation on foreign policy, including sanctions;

(iv)        transfer of regulatory responsibilities;

(v)        arrangements for contracts drawn up in accordance with EU law;

What amounts to a reasonable adjustment

The G4S case involved an employee who had a back injury; as this was a long term condition they were classed as having a disability under the Equality Act.

When they came back to work they could not do their previous job and so were given another role he could undertake. This other role paid 10% less, but they ring-fenced his salary for a year. After a year, he was then given a choice to remain in the role but at a lower salary, or leave. He did not accept the lower salary, was dismissed, and then brought claim.

The Court held that reducing the employee’s salary, even in a different job, was an unreasonable adjustment under the Equality Act and upheld his complaints of unfair dismissal and disability discrimination.

 

The effect of the decision

Reasonable adjustments do need to be considered when an employee has a long term physical or mental impairment and protected by the Equality Act. Recent cases have tended to err on the need to make less, rather than more, adjustments. The G4S case has firmly stemmed that tide.

Any adjustments need to be reasonable given the financial resources of the employer. Here, however, the Court decided that:

  • there was no evidence presented which would support the argument that overpaying for a role would have caused difficulties within the workplace;
  • the company had sufficient financial resources to overpay for the role; and
  • even if it had caused people to complain, you cannot compare a disabled employee’s salary against that of an non-disabled employee.

In addition, the Court commented upon other areas where adjustments may be need to be considered. Importantly, it cast doubt on the earlier cases which indicated that a reasonable adjustment should not include needing to extend sick pay.