The Uncertain Future of UK Employment Law in a Post-Brexit World

Niall O’Connor, Lecturer in Law, University of Essex

The Charter and Brexit

Boris Johnson famously downplayed the significance of the Charter of Fundamental Rights during the Brexit campaign. He argued in a Telegraph article that the Charter’s provisions, such as the right to establish a school or pursue an occupation anywhere in the EU, are not “fundamental rights” as commonly understood and questioned their enforceability. This perspective, shared by some Eurosceptics, portrays the Charter as an instrument of the EU Court (CJEU) that overrides national sovereignty. However, this view disregards the Charter’s nuances and the challenges in enforcing its provisions. Nevertheless, this mischaracterization fueled Brexit negotiations, particularly regarding the Charter’s Solidarity Title.

The Solidarity Title

Title IV of the Charter, known as the Solidarity Title, outlines fundamental employment rights, including rights to information and consultation, collective bargaining, protection against unfair dismissal, and fair working conditions. While the Charter is lauded for encompassing social and economic rights alongside civil and political rights, the classification of employment rights as “human rights” is debated.

The inclusion of employment rights in a human rights document implies their status as such. This is further supported by the Charter’s Explanations, which connect these rights to established human rights instruments like the European Social Charter and the International Covenant on Economic, Social and Cultural Rights, highlighting their longstanding recognition in international law.

Furthermore, arguments against the legal enforceability of social rights don’t necessarily apply to the Charter’s employment rights. These rights don’t automatically require state expenditure and have been largely defined by existing legislation, addressing concerns about vagueness. Ultimately, the principle of human dignity, enshrined in Article 1 of the Charter, underpins all rights, including employment rights.

Historically, the UK has held reservations about these employment rights, assuming an opt-out that was later dismissed by courts. The only true opt-out, as Catherine Barnard suggests, lies in Protocol 30, which states that Title IV provisions are not justiciable in the UK unless mirrored in national law.

This essentially means that any provisions classified as “rights” rather than “principles” are not directly enforceable in UK courts. Even this provision might have been redundant, as Article 52 of the Charter already establishes that “principles” only become enforceable rights when implemented in EU or national law.

This cautious approach highlights the existing divide between the right’s apprehension towards the employment rights, fearing disruption of the UK’s liberal employment laws, and the more supportive stance of Labour and trade unions who advocate for the Charter’s preservation post-Brexit to prevent the erosion of worker rights. However, an analysis of the impact of embedding employment rights within the Charter reveals that both perspectives might be misguided.

The Consequences of Constitutionalisation

The constitutionalization of employment rights is most evident in their use as both a standard of review and a tool for interpretation. Human rights have been used as general principles in interpreting EU law from the outset. Therefore, it’s unsurprising that the Charter’s influence is most pronounced in this area.

The CJEU has consistently employed a purposive approach to interpreting EU employment legislation. Take the Working Time Directive (WTD) as an example. The Directive’s goal is to establish minimum requirements for improved living and working conditions. The CJEU has consistently held that a broad, purpose-oriented interpretation is necessary to avoid undermining the legislation’s objectives. This demonstrates that the purposive approach predates the Charter and its recognition of limited working time and paid leave as fundamental rights.

Since the Charter’s adoption, the CJEU has maintained this approach, incorporating Charter provisions into its existing interpretive framework. This is exemplified in the recent ANGED ruling, where the CJEU affirmed the importance of paid leave as a principle of European social law and acknowledged its inclusion in the Charter before ultimately relying on the legislation’s objectives to justify a broad interpretation. This shows that the Charter’s influence, while present, primarily serves to confirm conclusions reached through pre-existing methods of interpretation.

Human rights as general principles have also been employed to review the legality of both EU and national legislation within the scope of EU law. This role has now been assumed by the Charter. While there’s no case law on the matter, the potential for employment rights to act as a standard for reviewing EU legislation is significant, as demonstrated by the equality field. In Test-Achats, Articles 21 and 23 of the Charter (non-discrimination and equality) were used to invalidate EU legislation that allowed for gender-based discrimination in calculating insurance premiums. Similarly, the constitutional status of employment rights could limit the Union’s ability to enact legislation that weakens these rights. For example, Article 31 might prevent further exceptions to the Working Time Directive.

The employment rights have also been used to review national legislation, although distinguishing between interpretation and review can be difficult. The CJEU is often asked to interpret EU law or the Charter before assessing the compatibility of national legislation with that interpretation, as it lacks the jurisdiction to directly review national law.

While Article 30 (protection against unfair dismissal) has proven to be a weak standard for reviewing national law, Article 27 (information and consultation) has been similarly ineffective. The application of Article 28 (collective bargaining) has been limited to examining whether collective agreements align with EU law.

Article 31 (fair and just working conditions), on the other hand, has been the most frequently invoked in reviewing national legislation. This is likely due to the significant litigation surrounding the WTD, which the Charter’s Explanations cite as a source for Article 31.

The King case exemplifies this. The CJEU had to determine whether an employee who gained the right to paid leave during their employment could lose that right if they didn’t actively exercise it. The UK’s Working Time Regulations state that employees must use their annual leave within the year or forfeit it. Advocate General Tanchev concluded that requiring employees to take the initiative in accessing paid leave would unjustly make the right conditional, especially given its recognized importance in EU, international, and national law.

In essence, the Charter’s influence on employment rights demonstrates a continuation of existing practices. The CJEU appears more comfortable relying on a written human rights instrument, finding validation in the Charter for its established approach of treating aspects of employment law, particularly paid annual leave, as significant social rights. This represents a return to textualism as a means of reinforcing a purposive approach, which, while arguably more democratically legitimate, is hardly revolutionary. This contrasts with Article 16 (freedom to conduct business), which has been used to significantly alter the interpretation of the Transfer of Undertakings Directive. So, does employment law stand to lose anything significant in the Brexit process?

The Effect on the Employment Law Hierarchy

The relationship between EU law and national law has not traditionally been hierarchical. Instead, the CJEU and domestic courts have generally operated within a framework of cooperation. However, the Charter’s introduction adds a new constitutional dimension. While most civil law systems recognize a clear hierarchy of sources in employment relationships, this has not been the case in common law systems like the UK’s. The order in which sources of labor law are discussed is largely inconsequential, and the existing hierarchy, if any, is fluid and adaptable.

Currently, the UK faces confusion on two hierarchical fronts: 1) between EU law and domestic law and 2) within domestic law itself. The EU-domestic hierarchy can be broadly summarized as follows: A) The Charter, as a constitutional document, occupies the highest position; B) General EU law follows, required to comply with the Charter while also serving as a benchmark for national law; C) Finally, domestic law sits at the bottom.

The domestic hierarchy, focusing on legislation and common law, has always been ambiguous and is now further complicated by both the Charter and Brexit. The classification of employment rights as fundamental human rights within the Charter has had minimal impact on domestic matters outside the scope of EU law.

The interplay between common law and employment legislation has always been intertwined. For instance, access to protective legislation often depends on the classification of a worker as an employee, a distinction rooted in common law. At times, common law has impeded access to employee protections. However, this has largely been an internal matter, with little regard for the human rights implications of legislation outside EU law’s purview.

For example, while Article 30 recognizes the right to protection against unfair dismissal as a human right, the EU has not implemented comprehensive legislation on the matter. Consequently, UK courts have maintained a relatively employer-friendly approach in unfair dismissal cases. Unlike the CJEU’s purposive approach, common law judges tend to prioritize contractual principles when interpreting employment legislation.

However, there are instances where the common law has adapted to legislative intervention, incorporating social rights standards. A prime example is the implied term of mutual trust and confidence in common law. This concept arose from the need to define “constructive dismissal,” prompting courts to refine the notion of repudiatory breach from commercial contract law.

Therefore, the human rights implications of domestic legislation outside the scope of EU law have had little practical impact on the domestic hierarchy. The relationship between common law and social legislation is dynamic, sometimes hindering and sometimes facilitating its application. Considering this already unsettled landscape, what implications does Brexit hold for these hierarchies?

The EU Withdrawal Bill

The UK government maintains that a clean break from the CJEU’s jurisdiction is essential for a true Brexit. This is despite ongoing efforts by both Labour and some Conservative MPs to incorporate the Charter into UK law. Recently, the government was compelled to postpone discussions about the Charter’s future role. Ultimately, the responsibility of interpreting and applying former EU employment legislation will fall on UK courts.

Clause 2(1) of the Withdrawal Bill states that EU-derived legislation applicable before Brexit will remain in effect in UK law. However, Clause 5(1) clarifies that the principle of EU law supremacy will no longer apply directly, though it will continue to guide the interpretation, disapplication, or overturning of any pre-exit legislation as per Clause 5(2).

This could have lasting consequences for the enforcement of EU-derived employment rights. In the Benkharbouche case, employees of the Sudanese and Libyan embassies were deemed entitled to bring claims based on EU-derived employment law (discrimination and working time) before a UK Employment Tribunal, despite conflicting provisions in the State Immunity Act 1978. Denying these EU rights would violate Article 47 of the Charter, which guarantees access to justice.

This case highlights the continued relevance of Article 6 of the European Convention on Human Rights (ECHR), which guarantees the right to a fair trial. Lord Sumption’s judgment emphasized that conflicts between EU law and domestic law are resolved in favor of the former, while inconsistencies with Article 6 of the ECHR result in a declaration of incompatibility.

The Supreme Court’s decision to overturn the order implementing Employment Tribunal fees in the Unison case also echoes this sentiment. The judgment acknowledges that many rights enforceable before Employment Tribunals are EU-derived, engaging Article 47 of the Charter. Significantly, the Court explored alternative avenues for human rights protection, including the common law right of access to justice.

Clause 5(2) effectively creates a new category of “retained EU law” that needs to be integrated into the existing hierarchy. This may not be an immediate concern for employment law, as much of the EU’s employment acquis is already implemented in domestic legislation. However, uncertainty remains about the status of post-Brexit CJEU case law (retained under Clause 6 with flexibility for amendment) and the extent to which UK courts can apply or deviate from it.

Most importantly for our discussion, the Bill clearly excludes the Charter from UK law.

The Charter Will Not, Should Not and Need Not Apply?

Will Not?

Clause 5(4) of the Withdrawal Bill explicitly states that the Charter will not be part of UK domestic law after Brexit. This poses several practical challenges. First, it is often difficult to isolate the Charter’s influence on CJEU decisions. The Charter’s prominence in employment law rulings varies. In some cases, it’s central, while in others, it’s barely mentioned, possibly reflecting the CJEU’s early caution in applying the Charter, recognizing the sensitivity of social rights and the ongoing struggle to differentiate between rights and principles.

Despite the skepticism surrounding the Charter’s influence, the CJEU might be implicitly relying on it for guidance while utilizing existing interpretive methods. Regardless, the Charter and employment legislation share a mutually reinforcing relationship. The Charter’s Explanations, which reference existing EU employment legislation, act as a guide for interpretation. Consequently, employment legislation should be interpreted in light of the Charter, which, in turn, should be interpreted considering the legislation, creating a potentially difficult cycle to untangle.

Should Not?

Some argue that incorporating the Charter into UK law post-Brexit would be undemocratic, as the CJEU has sole authority over the interpretation of Charter rights. Eduardo Gill-Pedro suggests that the CJEU’s interpretation is guided by the objectives of the Union, which the UK will no longer share after Brexit, making reliance on the Charter undemocratic.

However, the Charter is not merely a political roadmap for the EU. In the context of employment law, its role is more focused, guiding the interpretation and review of relevant legislation. Retaining the Charter should not be a concern for a government committed to preserving the existing employment law acquis. Moreover, without its constitutional status, the Charter poses little threat to amending or repealing domestic employment legislation, except where the supremacy principle still applies. This eliminates the concern of external values infiltrating the legislative process.

Need Not?

Finally, one might argue that the Charter’s applicability is ultimately inconsequential. Firstly, as previously mentioned, the impact of the Charter’s employment rights, often dismissed as mere “principles,” has been underwhelming. Secondly, the Repeal Bill itself, under Clause 5(5), preserves fundamental rights that exist independently of the Charter and mandates that references to the Charter in case law be interpreted as references to corresponding retained fundamental rights or principles.

Therefore, the Charter’s influence will persist through provisions already reflected in the general principles of EU law. The general principles, particularly in the area of equality, paved the way for applying fundamental rights in employment law, although the Charter’s adoption arguably emboldened this approach. However, the status of employment rights as general principles remains ambiguous, and the Withdrawal Bill limits the use of general principles as a standard for reviewing retained EU law.

Distinguishing the roles of the Charter and the general principles will prove challenging. Norway’s experience demonstrates how general principles can influence countries not bound by the Charter. The EFTA Court, which has consistently referenced CJEU judgments, exemplifies this through the “homogeneity” principle. This principle has had a significant impact, prompting the EFTA Court to adopt CJEU decisions made after the EEA Agreement.

This principle governs the relationship between the European Economic Area (EEA) Agreement and EU law. Article 6 of the EEA Agreement states that the Agreement’s provisions, when substantially identical to EU law, should be interpreted in line with relevant CJEU rulings made before the Agreement’s signing. However, the EFTA Court has argued that the goal of a dynamic and homogenous EEA necessitates that citizens and economic operators in both the EU and EFTA enjoy the same rights under EEA law. This extends to fundamental rights, with the EFTA Court referencing judgments from both the ECtHR and CJEU, as well as AG Opinions in relevant cases.

Conclusion

The expectations of both labor advocates and Charter skeptics might have been misaligned. The Charter’s Solidarity Title, rather than being a vehicle for imposing unfamiliar social rights and disrupting the adaptability of common law, has had a relatively limited impact. However, it has inadvertently facilitated the development of a counterbalancing business freedom enshrined in Article 16. The CJEU, in cases like AGET Iraklis and Alemo-Herron, has affirmed Article 16’s connection to the EU Treaties’ four economic freedoms and its ability to supersede competing employment rights.

Perhaps labor lawyers were overly optimistic about a document designed to codify the existing cautious and fragmented approach to fundamental employment rights. However, excessive skepticism is unwarranted. The Charter’s employment rights retain the potential to safeguard against legislation that undermines worker rights, acting as a safeguard against attempts to lower employment rights protections below the standards set by retained EU law.

The Charter’s strength lies in its potential as a standard for review. Yet, this function, at least in the context of employment law, remains largely untested. It is possible that the UK is abandoning the Charter before its full potential can be realized. Undoubtedly, the hierarchy of employment law is in a state of flux, and the final outcome remains uncertain. However, if the UK government succeeds in its objective, the Charter will not be part of this future landscape. Without the Charter, the employment law landscape will be stripped of valuable human rights protections. Left at the mercy of the common law, it is highly probable that UK employment law will move towards a more deregulatory model.

Barnard and Peers: chapter 9, chapter 20

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