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Ministers’ Brexit law plans could sink future workers’ rights wins

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Ministers’ planned post-Brexit legal overhaul could stop other workers following the major holiday pay court win secured by plumber Gary Smith last week [Feb 2]

The government has been careful not to directly threaten workers’ rights after being forced to back down from an attempt to dilute entitlements a year ago.

But plans to give precedence to domestic law over EU-derived law could have a dramatic effect on workers’ abilities to enforce their rights, especially on matters like holiday pay.

Just days before Mr Smith won an 11-year court battle with home repairs giant Pimlico Plumbers, the government published its Benefits of Brexit paper. This contained proposals which, though light on detail, could neuter future workers’ rights cases like his. 

Smith’s win 

Mr Smith has fought for years to establish that he was a “worker”, not “self-employed” and therefore had key rights. 

His efforts culminated in the Court of Appeal overturning the lower tribunals and ruling that he is entitled to holiday pay for his entire employment at Pimlico.  

Lady Justice Simler said in her judgment: “The single composite right in EU law is to take annual leave and to have the benefit of the remuneration that goes with it when the leave is taken.” 

This could set a crucial precedent for others, including those who work in insecure jobs such as private hire drivers or delivery drivers, who establish that they are workers. 

Mr Smith’s barrister, Michael Ford QC wrote: “The implications of the judgment for ‘gig’ workers – to use the hackneyed phrase – is huge.” 

The case establishes that, in relation to the four weeks’ annual leave underpinned by EU law, workers should be compensated for untaken leave and unpaid leave. This applies to every year of their employment. 

The Court even amended the Working Time Regulations to ensure untaken leave can be carried forward to future years. 

So any employer trying to mislead their workforce about their employment status could face a very high bill in future. 

EU law crucial to case 

Significant to the outcome of Mr Smith’s case was the way that European law works within our legal system. 

For cases taken out pre-Brexit, workers enforcing rights that stem from EU legislation, could rely on rights under the Charter of Fundamental Rights, on appeals to general principles stemming from EU law and, on the doctrine of direct effect when it comes to action against state bodies. 

The European Union Withdrawal Act 2018 swept most of these rights away for cases that started after the Brexit implementation period. 

But it maintained that where there is a conflict between pre-Brexit domestic legislation and retained EU law, EU law takes precedent. 

Crucially this means that, as it stands, workers can still draw the Marleasing duty which requires courts to interpret national law so far as is possible to achieve the result required by the relevant EU directive. 

Government’s reckless legal plans 

But this process could be undermined if the government proceeds with its plan contained in its sprawling Benefits of Brexit report to “remove the continued effect of supremacy of EU law over domestic law which was made before the end of the transition period”. 

The details of how the government seeks to achieve this are scant. 

But it would most likely force workers to rely on extremely weak domestic law, which ministers have repeatedly failed to take steps to improve despite promising an employment bill two years ago. And it would massively strengthen the position of bad employers. 

In the case of holiday pay cases this would likely limit pay-outs to a maximum of two years. It could also mean that they would have to launch a claim every three months, something few workers and their lawyers are going to do given the small sums involved in each individual holiday claim. 

In short, Mr Smith would have got little if anything if he had relied on UK domestic law to assert his crucial rights to paid leave. 

So other workers denied their rights by exploitative employers, within and beyond the so-called gig economy, would be unable to make the sort of successful claim he has. 

Overhauling the law in the way the government proposes is not a neutral act. It is one that would almost certainly set back significantly the cause of workers’ rights, particularly those with the weakest position in the labour market. 

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