The vote to leave the EU has caused much uncertainty for businesses, large and small, about the future. However as regards employment law, there are unlikely to be any immediate changes.
The government has to give formal notice of the UK’s decision to leave the EU and from that point, it will be at least two years before we leave the EU. During this time there will be negotiations on our future relationship with the EU. Changes to employment law are likely to depend on a large extent on the outcome of those negotiations and any agreement we make to continue employee protection. However whatever the outcome of the negotiations, there are unlikely to be substantial changes to employee rights.
While some of our laws were introduced to implement EU directives in this country, much of the protection provided by the EU was already in place in the UK – laws on equal pay, race and disability discrimination existed in the UK before the EU required that we have them, and the law on unfair dismissal is nothing to do with the EU. Even where there was no right already in the UK, in many cases the UK has enhanced rights giving greater protection to UK-based employees that it had to. This includes 28 days’ paid holiday for full-time employees, rather than the 20 days required by the EU. Any changes to such established laws such as those relating to holiday or family law in the UK (which also goes further than EU requirements) would be unpopular and unlikely.
Currently, where possible, employment tribunals have to interpret our laws in line with the relevant EU directive. Much court and tribunal time has been spent recently considering how much employees should be paid when on holiday. This is to ensure that employees are paid in line with decisions of the European court about what the EU directive on holidays says about holiday pay. When we are outside the EU, the UK courts would not need to take such decisions into account (unless some other agreement is reached with the member states). This may also mean that on an outsourcing of services or the sale of a business as a going concern, the incoming employees’ terms and conditions can be harmonised with those of the service provider’s or buyer’s existing employees – which EU laws prevent at the moment. Other areas that may be affected include the obligation to consult collectively on a large-scale redundancy, which may be watered down, and the rights of temporary workers, in particular the Agency Worker Regulations, which are complicated and unpopular with business. These regulations could probably be repealed with limited political backlash.
While there may be limited changes to employment laws, particularly in the short term, given that immigration played such a key part in the vote, there may be changes to immigration laws for EU employees working in the UK. You should consider who may be affected by any such changes or decide not to stay in the UK, and work on a contingency plan if they are key to your business.
You may also be considering the future of your business and whether you need to restructure or relocate any part of your business. This can have employment law implications, which should not be overlooked. If you have any concerns about how Brexit or any decisions that you make about your business are going to affect your employees, please get in touch.