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Brexit – potential implications for employment law

A substantial amount of employment law in the UK has derived or been shaped by the European Union; discrimination, family-friendly rights and the working time regulations are just a few examples.

Theoretically, an out vote would mean, once legislated for, the UK would be free to repeal all employment laws which are derived from the EU – but would such a step be realistic?

Will anything change?

It is highly unlikely that the UK government would seek to repeal existing EU employment laws for the following reasons:

  • The UK will still need to trade with the EU. To guarantee a working relationship with the EU and to trade with Member States, the UK will need to demonstrate that it has adequate employment protection measures in place.  The UK would still be subject to most employment law aspects including TUPE, working time and redundancy consultations if it was to be part of the European Economic Acre (“EEA”).
  • Some UK legislation actually goes further than what is required by EU legislation. Under the Working Time Regulations, the current UK minimum holiday entitlement for a full time employee is 5.6 weeks per year (including public holidays). The EU Directive only provides for 4 weeks of holiday. TUPE provisions relating to service provision changes also exceed the EU mandatory protection for workers but the government has already previously decided not to change this.
  • Other employment laws existed in the UK before the EU legislated in that area, the Equal Pay Act and the Disability Discrimination Act are examples. The right not to be unfairly dismissed is also a UK law and there is no reason why any such laws would be altered by a Brexit.
  • Many employment laws that have stemmed from the EU have become custom in the UK and are considered by workers as fundamental rights. The prime example would be the right not to be discriminated against on the grounds of a protected characteristic. It would be an unpopular move by any government to try and remove a core right such as this.

What would be the likely target?

The laws most likely targets for reform are those that have proved to be unpopular with UK businesses and which are not considered to be too controversial:

Holiday pay

The recent holiday pay cases have caused headaches for employers throughout the UK. The European Union Court of Justice recently ruled in Williams and others v British Airways plc that holiday pay should be based on “normal remuneration”, rather than the “weeks pay” provisions in the ERA 1996 which have traditionally accounted for basic pay. This is likely to be an area that the UK government would seek to amend in favour of employers.

Agency workers

The Agency Worker Regulations 2010 are the most likely target. The introduction of agency workers’ rights to the same or no less favourable basic employment conditions as direct employees after 12 weeks on assignment (i.e. holiday pay) have been widely unpopular with employers.

Effect on Immigration

Withdrawal from the EU could see the end of the free movement of EU workers. A consequence may be that EU citizens will need to comply with the same immigration rules as non-EU citizens when it comes to working in the UK and vice-versa for UK citizens.

Impact on Employers

At the moment, it is unclear exactly how employers would be effected by a Brexit. The general consensus is that a lot of the employment laws currently in force would not be changed and in any event, any changes that were to be made would not be immediate or too radical. However, the employment law implications are only one factor potentially affecting businesses and there are many other potential issues for organisations to consider in the event of a Brexit.

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