News & Views

Brexit Untangled: the effect on Employment and Labour Laws

wiresOn Friday 24 June 2016, the Great British public awoke to the news that the majority had voted to leave the European Union (EU). Although the outcome was a distinct possibility (after all, the odds were akin to playing ‘heads or tails’), it seems that many including the Government, the media and the pollsters did not truly believe this seismic event would happen. The result is that we are now desperately seeking answers to all sorts of wide reaching questions.

In respect of Employment Law and HR, what will happen to the raft of employment legislation that originated from the EU? What will happen to those employees who have a right to work in the UK by virtue of being a national of an European Economic Area (EEA) Country?

Despite all of the uncertainty that has inevitably followed from the moment we voted Leave, there is one thing that is very certain – no-one can say with any certainty what will happen next! However, we will share with you our thinking…

What happens to ‘EU’ Employment Law?
The immediate decision to leave the EU has no bearing on existing employment law. Even when we do ultimately close the door on the way out, the view is very much that we will still be bound by most of the employment law that originates from the EU. In other words, when we eventually leave the EU, it will not automatically result in the withdrawal of all EU employment legislation.

So, it is likely we will continue to be subject to the TUPE Regulations, with all the complexity that goes with them. We will still be bound by the Working Time Regulations and the entitlements that it affords workers in respect of holidays and rest breaks. Discrimination laws will remain a fundamental protection and rightly so.

However, some academics have queried whether some of the existing European legislation will be amended. For instance, the UK may look to apply a cap on the compensation that can be claimed in discrimination claims (currently unlimited), in the same way that a cap applies in unfair dismissal claims. The view is that it is only our membership of the EU that has prevented us from imposing such a cap.

It is also anticipated that the UK may look to remove the collective consultation obligations that apply in redundancy situations, as the business community have always considered these to be onerous.

In theory, our decision to leave the EU presents us with an opportunity to strip out those parts of employment legislation that don’t quite fit with the UK way – do we really want to limit workers to a maximum 48 hour working week? Just ask the doctors.

So, for the time being, no change…but watch this space.

What about your EEA workers?
Your existing workers with an EEA nationality have not lost the right to work in the UK merely because we decided to vote out of the EU. For the time being, they can continue to work for you under existing “right to work” arrangements and furthermore, you can continue to recruit EEA nationals without the requirement for a Visa until such time as we leave the EU or formal changes are effected.

It is possible in the short term that we might see an increasing number of workers seeking work in the UK under the existing “right to work” arrangements in the hope that any changes that take place when we leave the EU will not have retrospective effect. If that happens, there will be a certain sense of irony given that immigration dictated much of the ‘Leave’ campaign.

If you are a business reliant on labour from the EEA, then you ought to consider how you can mitigate the impact of labour restrictions in the future.

So again, for the time being, no change…but watch this space.

Shut the door on your way out
An overriding theme that has emerged from all of the debates regarding Brexit is that in reality not much should change until we eventually extricate ourselves from the EU. This process is anticipated to take at least two years so for the time being, so far as employment law and HR is concerned, “as you were”, as they say.

We will close the door on our way out, but we are not leaving just yet.

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