June 14, 2016

What could leaving the EU mean for UK employment law?

Impact of a Brexit on employment law

It is possible that if the UK leaves the EU, the Government could repeal the law that has come from Europe. This includes all kinds of discrimination, protection of pregnant, part-time, fixed term and agency workers, working time including rights to rest breaks and holidays, health and safety and TUPE. Our best assessment is that while it is possible to have a repeal of European derived law, it is unlikely to happen, as the effects of EU legislation are so intertwined in our normal workplace practices. Even if the UK does leave Europe, there will still be an ongoing need to trade in Europe, which means that many basic EU requirements and protections for employees will need to be in place.

Despite this, it’s important to remember that the UK already had many protections in place before European law required it. Many basic European employment laws have also been enhanced in the UK giving workers a higher level of protection – for example, the right to shared parental leave and to request flexible working.

So, what could be up for review and possibly change if Brexit becomes a reality?

  • The Agency Workers Directive confers similar employment rights to permanent employees, along with record keeping requirements. It’s possible that the government could make employer’s obligations to agency staff less onerous.
  • The Working Time Directive places restrictions on the working week (48 hours unless the employee has opted out), along with provisions for paid holiday and rest breaks. With recent case law now giving employees the right to carry forward holiday while off sick and holiday pay calculations now including overtime and commission, the law has become complex. It may be time for the government to simplify this area.
  • Unlike unfair dismissal claims that require two years’ employment, discrimination claims don’t need a particular length of service and compensation is uncapped. A cap on compensation could be introduced for successful discrimination claims.

How would changing the law work in practice?

Depending on which way the referendum goes, the UK will be required to give two years’ notice of an intention to leave the EU. During that period, negotiations on the departure and new trade arrangements are likely to be put in to place, while many EU directives underpin current UK legislation and may well continue to do so. In due course, the Government could gradually repeal EU derived employment laws, or, as is perhaps more likely, modify them to make them more palatable to UK businesses.

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