Brexit: Update on the future of ECJ employment case law and directly effective employment rights

As we have reported previously,  the Government’s position in relation to the future of workers’ rights is that, through the mechanism of the “Great Repeal Bill”,  the UK’s EU derived employment laws will remain in place at Brexit and that workers’ existing rights will continue to be guaranteed in law.   This has been confirmed by both the Prime Minster, Theresa May and Brexit Secretary,  David Davis.

Although this makes the position clear as regards employment rights which are enshrined in both primary and secondary UK legislation,  less certain is what the post-Brexit status will be of directly effective EU Rights, such as the right to equal pay contained in the Lisbon Treaty, and also of the relevant case law of the European Court of Justice (ECJ).

The ECJ has been responsible, throughout the UK’s membership of the EU, for interpreting employment rights and, while occasionally their judgments have been incorporated into UK law by consequent amendments to legislation,  more usually the judgments are given effect by the UK courts following the ECJ’s stance in their own case law decisions.

In some instances the ECJ’s judgments have arguably extended the scope of certain employment rights. The examples which are probably most unpopular currently with UK employers relate to holiday,  where the ECJ has ruled that workers continue to accrue holiday while on sick leave and that holiday pay should cover not just basic pay, but all elements of remuneration.

The UK’s system of precedent means that pre-Brexit UK court judgments which follow ECJ reasoning will remain binding on the lower courts post-Brexit.    However,   because,  post-Brexit,  the UK courts will no longer be bound to follow existing and future ECJ judgments,  there is a risk of contentious judgments,  like those on holiday pay,  being re-litigated by employers with a view to persuading the higher UK courts, once they are no longer bound by ECJ precedent,  to reach a different decision.      Contrary to the Government’s stated intentions, this does appear to raise the potential for certain “existing” employment rights to be eroded post-Brexit.

In early November, the House of Commons debated “Exiting the EU and workers’ rights”.  During this debate the Government appeared to confirm that its intention is to ensure that both directly effective EU employment laws,  as well as judgments of the ECJ,  will be given effect in UK law at the point of Brexit.   In closing the debate,  David Jones,  Minister of State for Exiting the European Union,  stated that “[On] the issue of what will happen to EU case law and judgments of the European Court of Justice, I wish to make it clear that the starting position of the Government is that EU-derived law, from whatever quarter,  will be transferred into United Kingdom law in full at the point of exit”.

This, however, is a slightly different stance to that taken by Jesse Norman, the Minister for Energy and Industry when addressing the House of Lords EU Energy and Environment Sub-Committee this week.    Mr Norman confirmed that ECJ judgments already codified into legislation would continue to have force via the Great Repeal Bill,  but gave no indication that non-codified judgments would be captured via this process.  His view is that “it may be open to [UK] judges to follow or not follow those”.

In conclusion,  although it appears that the Government intends to preserve all existing EU employment rights including those derived from case law,  it is unclear how this will be brought about in practice.