Following the referendum on 23 June 2016, the hotly debated British exit from the EU (Brexit) has become a reality.
Whilst there is no certainty surrounding the wide-ranging implications of the Brexit, this blog will discuss the potential implications that are likely to be the most significant in the UK workplace.
A notable proportion of the UK’s employment law stems from the EU, including discrimination rights, transfer of undertakings regulations, family leave, working time regulations and duties to agency workers. In theory, following the Brexit, the UK government now has the power to abolish all of this.
However, it is unlikely to do so for the following reasons:
- Many EU employment laws are so integrated into UK law that they have become workplace norms, and the complete removal of these would result in such confusion for employers and employees that this would be unworkable.
- Some EU employment laws merely subsumed protections that were already provided by UK law. For example, UK equal pay, race and disability discrimination and the right to return from maternity leave. It is unlikely, and it would be politically unattractive, for the government to backtrack on these protections.
- Much UK employment law exceeds the minimum EU requirements, is totally domestic or falls outside EU competence. For example, family friendly leave rights and unfair dismissal rights.
Much will depend on the UK’s post-Brexit relationship with the EU. The UK government would be well-advised to continue to observe EU law and maintain a relationship with the EU, as it is likely that the price of a trade agreement with the EU will be adherence to a certain amount of EU employment rights protection.
Employment Law Rights After Brexit
Discrimination law
The Equality Act 2010 is primary legislation, and so it would remain in force even if the legislation that incorporates EU law is repealed. This means that protection from discrimination, harassment and victimisation in the workplace due to a protected characteristic will survive Brexit.
It would be highly controversial for the government to repeal the Equality Act 2010 and it is difficult to imagine employers arguing that they should be free to discriminate against their employees. However, free from EU constraints, the government may introduce limits to the compensation that may be awarded in the event of a successful discrimination claim.
Additionally, the concept of ‘positive discrimination’ may be introduced, allowing those in under-represented groups to be favoured. This is currently not permitted under EU law.
Parental leave and pay
Family-related leave rights are a mixture of EU and UK derived rights. For example, the rights to maternity leave and pay, together with the recent concept of shared parental leave, are purely domestic in origin. Although these are arguably burdensome on employers, they are widely regarded as a good thing and are unlikely to be amended.
Transfer of undertakings
The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) provide employees with the right to have their employment transferred from one entity to another in the event of a business sale or a change of service provider. Despite the TUPE legislation being intricate and technical in places, it seems most likely that any changes to this would simply involve making this more user-friendly, such as allowing more flexibility in relation to the post-transfer harmonisation of terms and conditions.
Holidays and working time
The right to statutory paid holiday is now well established and it would be deeply unpopular if it was removed. However, there are aspects of the right to paid holiday that the government may want to amend following Brexit. For example, the recent European decision in Lock v British Gas, resulting in holiday pay taking into account all aspects of remuneration – not just basic pay – was unpopular with UK businesses.
The government may also want to limit rights to accrue and to carry holiday over into new holiday years, and to remove the cap on the maximum weekly working hours of 48 hours under the Working Time Regulations 1998. This 48 hour limit is rarely followed in practice, with most employees signing an ‘opt-out’ agreement on the commencement of their employment.
Collective redundancy consultation
The most probable changes in this area would be to the threshold numbers of redundancies (currently 20 or greater, and 100 or greater) triggering collective consultation and/or the applicable time frames over which redundancies can be made. However, the collective consultation obligations have already been watered down by the previous government and are arguably no longer overly onerous.
Agency workers
The law contained in the Agency Workers Regulations 2010 is the most likely to be repealed following Brexit, due to its convoluted nature, unpopularity with employers and lack of entrenchment in the workplace. For example, the right for agency workers to the same basic working and employment conditions as employees after 12 weeks of being engaged has been controversial.
Data protection
It is extremely unlikely that the Data Protection Act 1998, implementing the provisions of the EU Data Protection Directive 1995, will be repealed or be substantially modified. If UK businesses wish to operate in the EU (or vice versa) they will have to transfer personal data between the UK and EU member states and as such there must be an adequate level of protection for the rights of the data subject, equivalent to the current ones provided by the Data Protection Act 1998.
Freedom of movement
Potentially the greatest concern to employers is the impact that Brexit may have on the free movement of people and workers. Following Brexit, UK individuals no longer have an automatic right to travel and work in the EU, and vice versa for EU citizens. However the government will be aware of the adverse impact on trade and labour that this may have and it is expected to demand some form of free movement or amnesty, whereby those existing UK/EU migrants are allowed to stay for a reasonable period.
Alternatively, it is possible that if an agreement is not reached regarding free movement of goods and workers, a points-based system may be introduced.
The transition
The common view is that the government will take a piecemeal approach to legal changes, keeping the majority of EU employment law but with minor amendments.
It is likely that any employment law changes in the short to medium change will be minor, particularly as the UK is required to give 2 years’ notice of its intention to leave the EU. This gives time for the terms of the UK’s departure to be negotiated and for arrangements in the area of employment law to be reached.
For more employment law advice or to comment on this article, contact us to speak to a member of our employment law team.