What are the EU labour laws the UK government may scrap?

Tom Belger
·Finance and policy reporter
·4-min read

WATCH: What could scrapping EU labour rights mean for UK workers?

A UK minister has finally admitted the government is considering a shakeup of employment rights in Britain.

Business secretary Kwasi Kwarteng has spent much of the past week playing down claims workers’ rights could be cut back.

But pressed over the issue by MPs on Tuesday, he acknowledged the government was looking at whether EU rules should be kept in a range of areas. He said there would be “no bonfire of rights,” but Labour’s Ed Miliband claimed he had “let the cat out of the bag.”

How far Brexit allows an employment rights shakeup

A “significant portion” of current UK employment law comes from EU law, according to House of Commons Library analysis. It covers issues from equal pay and discrimination to health and safety, annual leave to redundancy rules.

There have been no immediate changes since Britain left the EU or the end of the transition period, as existing EU employment rights have been retained.

But the Brexit deal gives the UK government and parliament greater freedom to diverge from EU standards, and not be bound by European Court of Justice rulings on labour issues.

Changes are not allowed which give Britain an unfair trade or investment advantage over the EU, however. Britain and the EU also pledged to “strive to increase” labour protections, and rules remain fixed for hauliers working between the UK and the bloc.

Even experts remain uncertain how far the deal’s conditions limit Britain’s freedom for manoeuvre, with future UK-EU disputes or legal battles possible if de-regulation is significant.

“These provisions clearly restrict the UK’s ability to make major changes to employment law. It is not, however, a complete prohibition,” according to analysis by Lewis Silkin’s employment law team.

Commuters crossing London Bridge during evening rush hour. Train services have been ramped up from Monday in England and Wales reopen and workers are encouraged to return to offices.
The UK government is reviewing UK employment law. Photo: PA.

Scrapping the 48-hour working week

One of the most significant EU rules is its so-called ‘working time directive’ — a ban on staff regularly working more than 48 hours a week.

Britain has already secured an opt-out to the rules, allowing employers to ask workers to waive the rule. Opt-outs are often included in contracts, but employees retain the right to opt back in and limit their hours without penalty.

But the FT reported last week UK officials had proposed scrapping the protections altogether. The proposals are reported to have been floated with business leaders, but not put to the cabinet.

Kwarteng appeared to signal the government was considering reform while giving evidence to the Commons business, energy and industrial strategy this week.

“I’m very struck as I look at EU economies how many EU countries — I think it’s about 17 or 18 — have essentially opted out of the working time directive,” he said.

“So even by just following that we are way above the average European standard, and I want to maintain that. I think we can be a high-wage, high-employment economy, a very successful economy, and that’s what we should be aiming for.”

Excluding overtime from holiday pay calculations

Another area where reform is said to have been proposed is how holiday pay is calculated.

The ECJ ruled in 2011 that bonuses, commissions and overtime pay should be included in holiday pay calculations, in a boost to employees.

The judgement came after UK courts referred a case to the ECJ involving BA pilots, whose pay included both a fixed sum and other amounts that varied according to time spent flying and away from base.

The ECJ overruled the UK Court of Appeal’s decision that only the fixed sum constituted their pay for the purposes of working out holiday pay.

The UK government is reported to be weighing up whether to exclude overtime, saving employers money on holiday pay.

But a TUC spokesman said it would mean a “significant monetary loss” for low-paid workers forced into overtime.

“Working-class voters rely on their precious paid holiday,” said TUC general secretary Frances O’Grady.

Scrapping detailed logging of working hours

A third area of EU law the government is reported to be considering ditching involves logging working hours.

The ECJ ruled in 2019 that EU states must require employers to set up “objective, reliable and accessible” systems to record time worked each day by staff.

It came after a Spanish trade union argued it was key to check that employers were following working-time rules.

The ECJ agreed that the lack of such information makes it “excessively difficult, if not impossible in practice, for workers to ensure that their rights are complied with.”

It said it was for member states to decide how such systems would be designed. But if a UK shakeup is being considered, it suggests some in government regard it as an excessive burden on employers.

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