Brexit: How will Employment Law be Affected?

13 Jul, 2016

Jane Crosby , specialist in commercial litigation and employment law at Hart Brown, outlines how employment law could be affected by the UK leaving Europe

When the UK went to the polls on June 23rd, few people predicted the outcome that arose, with the Leave campaign scoring a shock win and a slender majority of the UK public voting to leave the European Union.

In the time since the result was revealed, there has been much speculation and debate over what the decision means for the UK in various sectors. But what is important is that the nation starts to look to the future and prepare properly for what lies ahead, be it in property sales, finances, or indeed employment law.

As the UK prepares to activate Article 50 and signal its intention to leave the EU, employers need to start to look at their next steps, and that includes being aware of what the Brexit decision means, and how this will shape the world of employment law when negotiations come to an end in around two year’s time. So what should employers be expecting to see change in terms of employment law in the next couple of years?

Change in the law?

In the main, experts have suggested that there’s not actually all that much to worry about when it comes to changes in employment law but time will tell.

There are a number of areas of law which are enshrined in UK law such as discrimination rights, transfer of undertaking regulations, working time regulations and collective consultation.

Contrary to popular belief, many of the beneficial employment regulations, both on the side of employee and employer, were brought about by UK governments and not the EU, so if and when Article 50 is activated, these would not change.

On top of this is the simple suggestion that EU law is so integrated and ingrained in the minds and practices of the UK employment sector that there would be no real appetite for change, at least in the short term. And that’s not to mention the fact that companies and employees alike have enjoyed the benefits of European regulations for so long that to make an attempt to unravel them and replace them with new legislation would be little more than a time consuming exercise.

It’s also highly probable, the CIPD claims, that although the UK will not be forced to adopt any new EU regulation after it has ceased to be a member of the Union, that it will remain bound by precedents set by the Court of Justice of the European Union (CJEU) and European Court of Justice (ECJ), which would mean there would be little in the way of worries surrounding large changes in the law.

Immigration

Without a doubt the biggest impact of the Brexit decision, British employers will need to be aware of how leaving the EU will affect immigration. Many British firms across a range of sectors employ EU migrants who have the freedom to work in the UK indefinitely, but after Brexit, this could be muddied somewhat.

Experts are somewhat split on what the move will mean for EU workers in the UK, with many believing those who are already in the UK will be given leave to stay without question, and others suggesting that EU migrants will thereafter have to satisfy similar immigration credentials as non-EU residents do at present.

There could also be an agreement as part of the UK’s negotiations around leaving the EU that sees trade agreements put in place that also protect the freedom of movement EU nationals currently enjoy, allowing them to work in the UK after Brexit with little change.

Equality and rights

Most of the equality laws that we enjoy in the UK were, contrary to popular belief, in place long before the EU membership, which means that the illegal status of discrimination of workers based on race, sex and disability will be unaffected once we have left the EU. It is difficult to imagine that the government will repeal the Equality Act 2010.

What may change, however, is the rate of compensation that people can receive in discrimination claims against employers, which could face a limit under UK law.

Holiday allowance

The holiday allowance that UK-based workers enjoy at the moment is as a result of the EU Working Time Directive, which sets out exactly how many days of holiday someone is entitled to based on their contract of employment.

Many experts expect to see changes in this area, with Frances O’Grady of the Trade Union Congress recently having stated that the six million workers who enjoyed the benefits of the Working Time Directive are likely to be worried.

The main changes in terms of holiday allowance are likely to come in the shape of changes to how holiday pay is calculated and rules over opting out of the 48-hour working week, although it remains to be seen what we will actually see when push comes to shove.

Transfer of undertakings

The Transfer of Undertakings (Protection of Employment) Regulations 2006 TUPE was first implemented in 1981.
This piece of legislation protects employees’ rights connected to their contracts of employment when there has been a transfer of undertakings or a service provision change.
Generally it has not been a popular piece of legislation with UK businesses. It is difficult to predict what would happen to this legislation but the government may take the opportunity to make changes to help businesses.

In general there may not be radical changes for businesses in the short term but they will need to keep updated to ensure they comply with the ever changing landscape.

(Source: Hart Brown)

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