So, Halloween’s ‘do or die’ Brexit Day came and went, without Boris Johnson either ‘doing’ or ‘dying’. As a result, questions are now being raised over the validity of his promises in other areas, such as upholding workers’ rights post-Brexit.
In a speech to the House on 23rd October, Mr Johnson reiterated that the UK was committed to “the highest possible standards” for workers’ rights. But just days later, a government document leaked to the Financial Times revealed quite the opposite: that the UK is open to a divergence from EU regulations on employment matters after Brexit.
The devil is in the detail. In order to allay EU fears that Britain would become a low tax, low regulatory haven post Brexit, giving it an unfair competitive advantage over EU states in attracting business, Mrs May negotiated a series of ‘Level Playing Fields’ (LPF) in four key areas: state aid and competition, environment, labour and tax.
The labour LPF was to ensure that neither the EU nor UK loosened its labour standards to gain an unfair competitive advantage over the other, because deregulation means lowering costs to business.
The most obvious areas influencing competitiveness include working time and holiday pay, as well as occupational pension schemes for part-time workers and the Temporary Agency Work Directive.
The LPFs suited both sides: the EU wanted to prevent undercutting by the UK, and the UK wanted tariff-free access to EU markets.
In stepped Mr Johnson and his new Withdrawal Bill, which on the face of it, pledges to uphold all previous commitments to the level playing fields, including those on labour laws.
However, Johnson’s deal has moved all references to the LPFs from the legally binding Withdrawal Agreement to the non-binding Political Declaration, and it is the wording of this declaration that has ever so subtly, but potentially drastically, changed the goalposts.
The leaked government document – Update to the Economic Partnership Steering Group (ESPG) on level playing field negotiations – drafted by the Department for Exiting the European Union (Dexeu), notes that new wording secured on the enforcement of workers’ rights “leaves room for interpretation”.
Essentially, the word ‘adequate’ has been removed to describe the mechanisms to enforce labour standards in a future trade deal, and has been replaced by the word ‘appropriate’.
The Cambridge English Dictionary defines adequate as ‘enough or satisfactory for a particular purpose’ whereas the meaning of appropriate is ‘suitable or right for a particular situation’.
The significance? According to Dexeu, the UK can now argue that it is “inappropriate for the future UK-EU relationship” that disputes about commitments on employment, environment, tax, state aid and other standards should be subject to binding arbitration, thereby allowing the UK to divert from them.
The government has denied there will be any deregulation of workers’ rights. Currently, UK employment laws will remain aligned with the EU after Brexit unless there is domestic legislative change (see Boris Brexit – changes to UK employment law more likely?).
If this is true, and there will be no change in workers’ rights following our exit from the EU, it should be viewed as a positive thing. Deregulation of labour laws may increase a country’s competitiveness in the short term, but long term, can arguably lead to a deceleration of productivity. Moreover, the EU will simply counterattack by imposing trade barriers. Therefore, sticking to the original agreement, whereby the regulatory framework would not be altered, would certainly be the easiest, and highly likely, the better option.
If you require assistance with any of the above matters, please contact David Greenhalgh of the Joelson employment team on +44 (0)20 7580 5721.
This article is for reference purposes only. It does not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking or deciding not to take any action.
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