The future of worker rights in the UK post-Brexit is shaping up to be a contested policy debate. Last week, the Financial Times reported that Government was considering using its new freedoms to deviate from worker protections underpinned by EU law.

While Business Secretary Kwasi Kwarteng responded to the leak by insisting that he intends to ‘protect and enhance workers’ rights going forward...’ it’s already clear this will a key dimension of the UK’s relationship with, and life outside of, the EU over the months and years ahead.

But what could a “bonfire of workers’ rights and protections” include? Much of the media response surrounding the leak focussed on the Working Time Directive, which - barring some exceptions - caps the working week at 48 hours. Numerous other employment regulations have been introduced through the EU however - which could now be open to alteration, including: holiday pay, rest breaks, the right to receive a written statement of terms and conditions as well as maternity rights and parental leave.

Some workers would be more affected by the rumoured changes than others. For example, agency workers’, entitlement to equal treatment with employees is solely derived from EU regulations and not currently covered by UK law. The Government’s position on this area isn’t yet clear, leading to some concern that these rights could now be amended through executive action.

The coronavirus pandemic has driven unprecedented falls in national income; fuelled rises in public deficit and debt surpassed only in wartime; and created considerable uncertainty about the future. In November 2020, the Office for Budget Responsibility forecast that GDP would fall by 11% by the end of the year – the largest drop in annual output since 1709. For some parliamentarians, see limiting regulations on businesses a means to unlock growth and innovation to support a more buoyant economy, a move which could be particularly tempting given the scale of the challenge. Given recent reports of firms experiencing post-Brexit trade issues, with export delays and confusion about customs declarations for parcels bound for Northern Ireland, the removal of employment-related ‘red tape’ could offer a means to demonstrate the benefits of leaving the EU for UK businesses. The recent creation of a new ‘Build Back Better Council’, comprised of executives across leading firms with a remit to make the UK the ‘Singapore of Europe” indicates that changes to regulations could lie ahead.

The EU will be monitoring any changes made to workers’ rights in the UK, as they could break the non-regressions clauses contained in the Brexit trade deal. If the UK breaks this agreement, the EU could retaliate with tariffs, the impacts of which could be wide ranging. It is estimated that EU retaliatory tariffs on targeted sectors in the USA have a disproportionate impact on rural areas and small towns, where up to 13.4% of jobs are export-dependent.

The Employment Bill planned for this parliament will serve as a litmus test of the Government’s ambitions in navigating changes to regulations with its ambitions to enhance workers’ rights. Over the longer term, this balance could become a more prominent political fault-line. While some harbour a vision for UK as a low tax, low regulation economy, this will be fiercely contested both in Westminster and by trade unions, and is likely to be a debate that remains at the forefront of politics and policy over the year ahead.

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