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Employment law post-Brexit: what change is likely?

15 August 16

Employment briefing: although much employment law is EU-derived, there is reason to believe that relatively little will change as a result of the EU referendum vote

by Amanda Jones

The dust is just beginning to settle on the Brexit result, yet the wider ramifications of the vote are unclear and likely to remain so for some months at least. In the meantime, employment practitioners will be facing questions from HR professionals, who in turn will be tackling requests from management and staff about what the vote means from a HR and employment law perspective.

Helpfully, we are able to answer some of those questions with some certainty.

Employment law in August 2016 is the same as it was in June 2016. EU employment rules are enacted by UK legislation, so nothing can change unless this legislation is amended. Until the exit is completed, which is expected to take anything from two to seven years, we remain within the EU, so the UK will be required to continue to implement EU directives and to follow CJEU decisions.

The position for those who do not hold UK citizenship was clearly a focal point of the campaign. Politicians from most, if not quite all, persuasions have since the result taken steps to reassure EU workers that they continue to be protected and are welcome in the UK. The position of EEA citizens working in the UK is also unchanged at present. However, some EEA nationals may want to explore applying for UK citizenship.

In the long run...

The longer-term impact on UK employment law is, of course, as yet unknown. After the exit, UK Governments will be free to change EU-derived rules. The extent to which that happens will depend on the political ideology of the Government at the time and any deal on access to the single market.

It is clear that certain aspects of UK employment law will be unaffected. Most prominent of these are the national minimum wage and the law relating to unfair dismissal. While changes may take place in these areas, they are outside the scope of EU law and would not be impacted directly by an exit from the EU.

Wholesale repeal of discrimination and TUPE legislation seems unlikely; however, in practice, amendment of some of the details of the rules seems more probable. For example, the principle that sanctions must be effective, proportionate and dissuasive stems from the (then) Equal Treatment Directive. This principle resulted in an ECJ decision that awards in discrimination cases could not be subject to an upper limit. Without these requirements, we may see a Government with a deregulatory agenda seek to set a cap for damages in discrimination cases. Other recent or mooted changes to UK employment law, such as the introduction of shared parental leave and the intended “grandparent leave” (to be implemented by 2018), have not been driven by the EU and should remain unaffected (although were enacted and announced by a somewhat differently constituted Conservative Government).

There are other areas where UK legislators have gone further than is strictly required by EU legislation. For example, the UK minimum holiday entitlement currently sits at 28 days (inclusive of public holidays) for a full-time employee, whereas the EU Working Time Directive requires only 20 days. In a similar way, the TUPE regulations go beyond the originating EU legislation (the Acquired Rights Directive) by extending TUPE protection to service provision changes. It would seem unlikely that Brexit will prompt changes in areas of UK employment law where the UK already considers the EU legislation does not go far enough and has firmly embedded enhancements to EU law in the workplace.

A wary eye

It is arguable, then, that little in employment law will change. Any changes are likely to be piecemeal over a prolonged period. Significant immediate changes are unlikely, particularly given that the UK is required to maintain basic employment protections in seeking to remain a viable trading partner for the EU.

Trade unions are, however, concerned about an erosion of rights, particularly in relation to agency workers, working time limits and rights of workers to receive information and be consulted on changes to terms and conditions, as these were distinct areas in which the UK Government opposed greater EU protection. More generally, unions are uneasy about unequal rights between workers in different member states and the potential for a “race to the bottom” when it comes to pay and employment protections.

Keep an eye out for a fuller article later in the year, when it is hoped that the new lay of the land is clearer.

Amanda Jones, partner, Maclay Murray & Spens LLP

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