Your Employment Is Brexit Proof

Labor law after the Brexit pact: the break prevented, but the separation started

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Guest contribution by Annabelle Marceau and Dr. Alexander Willemsen and Dr. Wolfgang Kotzur

13.01.2021

The no-deal has been prevented, but the new trade pact leaves many questions unanswered. Annabelle Marceau, Alexander Willemsen and Wolfgang Kotzur show what this means for labor law in general and for bar admission in particular.

A “level playing field” should continue to be the basis of trade between the EU and Great Britain in the future. To ensure this also in the area of ​​labor law, the new trade agreement between the EU and Great Britain lays down certain principles and regulates important individual issues.

In principle, the agreement provides that Great Britain may not weaken or reduce the level of workers' rights applicable as of December 31, 2020 in a way that affects trade or investment. This means that the laws remain in their current form - that is, on the basis of EU standards. In terms of fundamental rights at work, health and safety standards, fair working conditions, employment standards, information and consultation rights at company level, company restructuring and company transfers, there should initially be no deviations.

However, the agreement does not prevent the UK from undermining EU standards in the future: this is expressly permitted under the trade agreement, provided that trade and investment are not affected. Adjustments in vacation law, for example, are likely to be permissible, while there would be limits to a complete liberalization of working time law, for example: Such interventions would shift the balance on the European or world market and could possibly lead to inadmissible trade and competitive advantages for Great Britain.

If the UK deviates from the EU standard, it can be expensive

For future legal acts, the agreement provides that the EU can take “reasonable compensatory measures”, including punitive tariffs, if the UK deviates from the EU on labor rights in a way that has a material impact on trade or investment, subject to one Arbitration. Any alleged effect on trade or investment "must be based on reliable evidence, not just guesswork or distant possibility".

According to this, Great Britain is not obliged to strictly adapt its future labor law to EU directives or ECJ decisions in order to be able to continue to operate duty-free trade. The EU could, however, resort to compensatory measures, if necessary also to punitive tariffs, if British legislation leads to a noticeable advantage for its country in international trade.

The crux of the matter: This presupposes that the claimed competitive advantage can actually be proven. This means that lengthy arbitration proceedings are mapped out before such sanctions can actually arise.

Are UK Labor Courts bound by ECJ case law?

Speaking of court proceedings: the EU Withdrawal Act 2018 (EUWA) already makes it clear that British labor courts are no longer bound by the rulings of the European Court of Justice. However, you should take them into account if necessary.

What this exactly means is still completely unclear and will certainly keep the courts busy in the years to come. This problem becomes particularly exciting when British case law decides to ignore an important ECJ ruling.

Here, too, the problem: It is unlikely that the EU can sanction the deviation of British case law from the ECJ's guiding principle decisions, for example through the said punitive tariffs. Because here it becomes even more difficult to prove a significant impact on trade.

Important open EU labor law directives are likely to be implemented

The EU directives relevant to labor law, the implementation period of which is currently still running, will most likely be implemented in British law. The guidelines on the protection of whistleblowers (2019/1937 / EU), on transparent and predictable working conditions (2019/1152 / EU) and on the work-life balance for parents and family carers (2019/1158 / EU) are already partially national Implemented right. They are to be fully adapted by the end of the respective implementation deadlines - at the latest in 2022.

If Great Britain should refrain from these plans and this would lead to a significant deviation in labor rights, the aforementioned mechanisms would come into effect again, and in the worst case lead to punitive tariffs.

What applies to German employees in the UK in the short term

For EU citizens, short business trips of up to six months for executives, freelancers and employees working to carry out an assignment in Great Britain will in most cases not require a visa. This includes participation in meetings, conferences, seminars or job interviews, negotiations and contracts with business partners or visits to trade fairs.

It should be noted that from October 1, 2021 at the latest, an identity card will no longer be accepted as a travel document upon entry. On the other hand, the regulations for the A1 certificate remain valid, so that these must still be applied for for official and business trips.

Long-term professional activities, which go hand in hand with a permanent residence on the other side of the English Channel, require the application for the “settled status” in the future. Similar to Australia or Canada, the assessment of the residence permit is then carried out using a points-based immigration system. Points are then awarded, for example, for the professional qualification of the potential employee or if there is already a job offer in Great Britain.

As a German lawyer in Great Britain and vice versa - what now?

The qualifications of doctors, architects, lawyers, engineers and other professions will no longer be automatically recognized with the new trade pact. These professionals must therefore seek national recognition in the country where they want to work. After all, they are allowed to live and work on the other side of the English Channel for up to 90 days without a visa.

For lawyers in particular, this does not change, although the trade and cooperation agreement explicitly mentions the area of ​​legal advice: In view of the considerable access restrictions to which British lawyers on the “continent” and EU-approved lawyers in Great Britain are now subject, this is more emphasized what is no longer allowed in the future.

British lawyers now find themselves in the same position as lawyers from third countries, e.g. B. the USA. The extent to which they are still allowed to advise on British law in the EU depends on the rules of the individual member states. In Germany, for example, this is possible provided they have been admitted to a local bar association. In contrast to before, advice on EU law is now generally prohibited in the EU, as is (usually) advice on the respective national law of the member state.

EU lawyers in Great Britain are still allowed to advise on their respective national law, in principle even without registering. In addition, like lawyers from third countries, they are generally allowed to continue to advise on English, Welsh, Scottish and Northern Irish law, provided that it does not involve certain “reserved” activities.

Theoretically, lawyers could avoid all of these problems if they also obtain a license in the UK or in the respective EU member state of choice. But that has also become more difficult - and in many cases includes a return to the university for a law degree, which is unlikely to be practical.

The EU and Great Britain are likely to drift apart

The trade agreement between Great Britain and the EU prevents the major break in labor law with the decades of EU legislation. Nevertheless, both parties are likely to slowly drift apart in the coming years, at least as far as labor law is concerned.

There are already new bureaucratic hurdles in accessing the UK labor market. Only then will it become clear how resilient the negotiated conflict resolution mechanisms are: If Great Britain gets serious and falls significantly below the European level of protection, the impact on trade and investments as well as the significance of the legislative deviations can probably only be determined in lengthy arbitration proceedings. It will therefore take some time before punitive tariffs really come about.

The authors are lawyers at the Oppenhoff law firm in Cologne and Frankfurt.