What are the employment law / HR implications of Brexit?

brexit-1485004_1280Following the EU Referendum on 23 June and the largely unexpected result that Britain has voted to leave the EU, what are the employment law / HR implications of Brexit?

Nothing has changed as a result of the outcome of the referendum, and nor are we likely to see any changes for some time. The formal process of leaving the EU has not yet been triggered, and even when it has been, the exit process seems certain to take at least two years, and possibly more. Even when the UK does leave the EU UK employment law will not change overnight, contrary to what some would have us believe. A considerable amount of our employment law predates EU legislation, and the employment law which has come into force as a result of EU Directives has been incorporated into domestic law, and therefore will remain UK law even when we are no longer part of the EU.

Most employment law commentators agree that a wholesale repeal of UK workers’ employment rights is highly unlikely, not least because of their inevitable unpopularity with the UK workforce. So what changes are we likely to see to employment law post-Brexit?

  • TUPE (Transfer of Undertakings (Protection of Employment) Regulations)
    There has been speculation that TUPE, which protects workers’ rights when businesses or service provision contracts change hands, will be reformed or even repealed. The general consensus is that TUPE will not be repealed as it is now an accepted part of employment protection, to the extent that the UK went even further than required by EU law in 2006 by incorporating service provision change into the Regulations. Many service provision arrangements are predicated on the basis that TUPE will apply on termination, and if TUPE no longer applied this would cause considerable disruption to such arrangements as well as potentially leaving the outgoing service providers with expected termination costs, as they would be faced with making staff redundant, rather than transferring them to the next service provider. It has been speculated that the duty to inform and consult workers in advance of a TUPE transfer could be removed or made less onerous; that it could be made easier to make changes to terms and conditions with employees’ consent; and that greater flexibility could be allowed in insolvency situations, for example, protecting terms and conditions at the time of transfer, but thereafter protection being the same as that for other employees. This would make post-transfer harmonisation of terms and conditions much easier.
  • Working Time Regulations (WTR)
    The WTR covers areas such as working hours, holiday and rest breaks. Many businesses feel that the WTR decrease workforce flexibility and increase the costs of hiring staff. Most employment law commentators agree that the WTR will stay, although it has been suggested that some aspects of the WTR could be amended to reduce the administrative burden on employers, especially in relation to breaks, rest periods and record keeping. A prime candidate for repeal or reform could be the 48 hour average weekly working time limit and its associated requirement to record time over a 17 week reference period. Governments have in the past fought against this restriction, and its removal would be popular with businesses. It is generally agreed that the right to paid holiday will remain; the UK already exceeds the EU minimum of 4 weeks’ paid annual leave with 5.6 weeks being the legal minimum in the UK. It has been suggested, however, legislation could be passed to reverse some of the holiday cases, such as those relating to the accrual holiday during long term sickness absence; and the recent ECJ rulings which have determined that a ‘week’s pay’, must include commission and overtime, restoring the position where holiday pay is just based on basic salary.
  • Redundancy consultation
    Collective consultation obligations kick in when an employer is proposing to make 20 or more people redundant at the same establishment. The law on collective consultation is derived from an EU Directive. These obligations are unpopular with employers and there is speculation that the obligations will be diluted, for example, by raising the threshold for collective consultation to 100 potential redundancies rather than 20.
  • Agency Worker Regulations (AWR)
    The AWR require employers to offer equal terms and conditions to agency workers once they have been working for 12 weeks. The AWR are generally unpopular with employers, disliked by the CBI, and are not generally supported by the unions as few temporary workers join unions. It has been suggested that the Government could remove the requirement for agency workers to be paid the same rate as staff after the 12 week period. Repealing the AWR altogether would reduce business costs and record-keeping requirements and be a popular move with business, so this cannot be discounted.
  • Discrimination
    Contrary to popular belief, the majority of the UK’s anti-discrimination legislation predates the EU legislation, the 2000 EU Equal Treatment Framework Directive. As a result of this the UK passed regulations to prevent discrimination on grounds of sexual orientation, religion and belief and age, but the UK had already passed legislation preventing sex, race and disability discrimination some considerable time before. It is unlikely that any of the “protected characteristics” will be abolished, although it has been suggested that a cap could be introduced on discrimination claims, such as the cap that currently exists for unfair dismissal claims.
  • Family friendly rights
    The UK already considerably exceeds EU rights, for example, by offering 52 weeks maternity leave, shared parental leave and the right for anyone to request flexible working. Given the emphasis in recent years to afford employees greater flexibility to manage their working and family lives, it seems unlikely that these rights will be significantly eroded, and this would also be deeply unpopular with the working population.

So the position is that there will be no change in UK employment law as a direct result of the Brexit vote for the foreseeable future, and that even when we are no longer part of the EU drastic changes are unlikely. We will keep you informed!

 If you need advice on any of the employment law issues arising from Brexit, please contact Helen Kay on or .

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