Brexit gives rise to significant challenges for the UK in relation to VAT. The UK aspires to frictionless cross-border trade with the EU after it has left, or at least borders that are as frictionless as possible, but, at least until technology has further advanced, VAT necessitates a border between those who are inside a common VAT area and those who are not. What then is the future for VAT in the UK? In this provocative and wide-ranging article, authors Jeremy Cape, Partner, Squire Patton Boggs, and Max Schofield, Barrister, 3PB Barristers, present the most ambitious attempt so far to consider what the UK might do on VAT after Brexit. The article was first published in Vol. 27 of EC Tax Review 2018.
Northern Ireland employment law is a devolved issue and its statute book has always been largely distinct and separate from that applicable in GB. This always had the potential to allow for NI-specific protections of EU-derived labour law rights post-Brexit, as I have suggested on other occasions. Had there been political consensus in the Northern Assembly on this issue it might have been done there, but once the DUP stuck rigidly to its approach to Brexit that was always unlikely. What has emerged, however, is that the Protocol on Ireland/Northern Ireland to the Draft Withdrawal Agreement – in seeking to create a literal and notional ‘customs space’ applicable to NI alone – has offered up a number of features which will, I suggest, have the effect (if the Deal is agreed!) of entrenching some EU-derived labour law rights as they apply in NI.
The Protocol on Ireland/Northern Ireland: A ‘floor’
The Protocol states that its provisions ‘shall apply unless and until they are superseded, in whole or in part, by a subsequent agreement’ (Protocol, Article 1 para 4, p307). This means that despite the statement that it is ‘temporary’, the Protocol would continue in force until something else took its place. On the basis that it was negotiated to avoid the ‘hard-border-on-the-island-of-Ireland’ issue by creating a deeper relationship between NI and the EU than for the rest of the UK, it would seem unlikely that the terms of the Protocol would be superseded by a later Agreement that would water those terms down. On that assessment, the Protocol is intended to be a statement of the minimum legal rights that would apply between NI and EU post-Brexit – a ‘floor’ of rights, if you will.
‘Entrenching’ EU equality law
This Protocol guarantees ‘no diminution of rights, safeguards and equality of opportunity’ as set out in the section of the Good Friday Agreement entitled ‘Rights, Safeguards and Equality of Opportunity’ including ‘in the area of protection against discrimination’ those rights set out in Annex 1, and the Annex lists 6 key EU legislative enactments underpinning equality law. The UK would then undertake to implement this commitment through ‘dedicated mechanisms’, which presumably would be statutory enactments giving domestic effect to this commitment. There is nothing new in the restatement of the GFA protected rights, in my view, but there is something novel in the inclusion of the EU law enactments listed in Annex 1. These include the Race Equality Directive and the Employment Equality Directive, for example. Their inclusion in the Protocol in this way, means that they cannot be diminished or diluted as long as the Protocol is in force. Presumably, this guarantee would manifest itself in a specific domestic statutory limitation on the legislative powers of the Westminster Parliament and of the Northern Ireland Assembly. In this way, any legislative attempts to reduce these rights would be outside the competence of those legislative bodies.
This protection appears to be unlimited in time, in the sense that it is not pegged to when the transition ends. In that sense, to put the matter very simply, these six Directives would apply in NI law in perpetuity.
And there’s more: ‘Entrenching other employment law rights’ in NI
There are further protections of ‘Labour and Social Standards’ in the Protocol, however. Annex 4 Part 3, Article 4,(p360) prevents the diminution of common labour and social standards below the common standards applicable in the EU, at the date of the ending of the transition period. Article 6 of the Protocol states that ‘With a view to ensuring the maintenance of the level playing field conditions required for the proper functioning of this paragraph, the provisions set out in Annex 4 to this Protocol shall apply.’ This the Protocol refers to as the ‘non regression of labour and social standards’.
This would have the effect of ensuring that the standards as regards ‘labour and social protection and as regards fundamental rights at work, occupational health and safety, fair working conditions and employment standards, information and consultation rights at company level, and restructuring’ that were in place at transition would remain applicable post-transition. This appears to ‘ring-fence’, in NI law, a wide range of EU-derived labour law rights. It would include things like the Working Time Regulations, to pick an obvious example. And if the Protocol continues without any further Agreement superseding it, it would mean that those rights would continue in perpetuity, albeit in the state in which they existed at the date of transition. As the UK would have committed itself to implement these undertakings through ‘dedicated mechanisms’ as mentioned above, one can presume that this aspect of the Protocol would also appear in domestic legislation in the form of limits on the legislative competence of Parliament and the NI Assembly, though the ‘entrenchment’ of these rights would only be as to the ‘proper functioning of the single customs territory’. This limitation of the protection to the functioning of the single customs territory might mean that workers in the haulage industry, for example, might benefit, but that one might see an argument that the protection of those rights did not apply to persons who worked in service occupations that had no contact or connection with the single customs territory (because they were not involved in the ‘goods’ economy). However, enacting legislative changes to these guaranteed common labour standards so that would apply only to workers in the (pure) services industries would be a difficult and complicated exercise and the NI Assembly (or Parliament) might not consider it worth the effort.
And what about the post-transition day labour law rights?
The Protocol does not address the status of labour law rights that are created post-transition, even those that relate to the ‘proper functioning of the single customs territory.’ This seems an odd omission, as it appears to allow divergence – in a post-transition world – between labour standards in NI and the EU even in relation to the making, sale and supply of goods. One would have thought that this was anathema to the EU as opening the possibility in the future of NI distorting the ‘level playing field’ in relation to the operation of the customs territory on which the EU was so keen.
Reducing this dense legal text to some key messages, I suggest the following short-hand analysis:
- Certain EU equality law enactments will continue in NI law in perpetuity.
- EU-derived labour law rights relating to the ‘single customs territory’ in existence on ‘transition day’ will last in perpetuity in NI law also.
- EU-derived labour law rights created after transition day would not have to be observed in NI law.
The ‘entrenchment’ of these EU-derived equality rights, with their roots likely to be in an international treaty incorporated into domestic UK law, will be a significant and singular feature of the NI constitutional landscape, with very long-term implications indeed.
Ciaran White is a Senior Lecturer in Law at the School of Law, Ulster University and a Barrister at Law at the Bar of Northern Ireland.
Suggested citation: C. White, ‘Northern Ireland Workers’ Rights and the Draft Withdrawal Agreement: The Quasi-constitutional Entrenchment of EU-derived Labour Law Rights’ U.K. Const. L. Blog (19th Nov. 2018) (available at: http://ukconstitutionallaw.org))
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