The UK will hit the polling stations on 23rd June to decide whether the UK should remain in or leave the European Union (EU). With this date fast approaching, the question begs of HR and employment professionals, what will happen to our employment laws in the event of a ‘Brexit’ (Britain’s Exit)?
Background
The European Union is the source of many UK employment rights. It dictates a minimum standard of protection for employees of European member states, such as minimum break periods and annual leave, as provided for in the Working Time Directive. Other laws derived from EU directives include certain family friendly rules, discrimination laws and collective redundancy requirements, to name a few. The UK Government then provides for this standard via domestic legislation.
Brexit will mean that the UK Government is no longer bound by the minimum protections imposed by the EU. Without the EU dictating these minimum standards, the Government will be able to amend and implement new laws as it sees fit. In theory, we could potentially see current entitlements being changed.
‘Gold Plating’
As previously mentioned, the EU provides a minimum standard which member states must abide and provide for via domestic legislation, but the UK can choose to offer workers an enhanced standard. Some may therefore conclude that these ‘gold plated’ laws are here to stay, irrespective of the decision following 23rd June, given the UK Government voluntarily offers greater protection.
As an example, the EU’s Working Time Directive (WTD) was implemented into UK law via the Working Time Regulations 1998 (WTR). The WTD set a minimum entitlement of 4 weeks’ paid annual leave but the UK Government has chosen to ‘gold plate’ and enhance this by providing in the WTR that workers are entitled to 5.6 weeks’ paid annual leave, exceeding the EU minimum by an extra 1.6 weeks. Another example of ‘gold plating’ is maternity leave: the EU requires the UK to offer a minimum of 14 weeks’ maternity leave but the UK exceeds this by offering up to 52 weeks’ of maternity leave, 39 of which is paid.
Brexit Implications
At times, the EU dictating employment standards has become a controversial and politicised issue. Some UK employers criticise that Brussels is too quick to legislate, with a pro-employee attitude, without adequately considering objections raised by member states. It is therefore thought by some that Brexit would enable the UK Government to redress the balance and alleviate some of the red-tape, pro-employee burden on British businesses.
No-one knows what type of relationship the UK may have with the EU if it left. There are legal and financial uncertainties but a vote to exit would not result in overnight change. Negotiations between the EU and the UK for the UK’s departure would take a considerable amount of time – we know any formal exit would not happen for at least two years following a vote to leave – and the status quo would likely be retained during this period. Major and wholesale changes would not be welcomed and would cause great uncertainty for employers, with considerable costs borne in the implementation of any new schemes. Employment law changes, if any, will occur over time and will likely be in a piecemeal fashion. Further, many EU derived employment laws are actually considered as good industrial practice, such as rest periods under the WTR, and have become workplace norms.
European Court of Justice Caselaw (ECJ)
In terms of ECJ case law, even if the UK exits the EU, former ECJ decisions are likely to remain as domestic authority in judgments. UK employment tribunals would not be able to completely ignore pre-existing ECJ case law immediately post-Brexit as these judgements become domestic law either through an Act of Parliament or by courts citing and following an ECJ decision in its own case law, as it is currently obliged to do. Only if and when higher courts reconsider and alter the established position on any particular aspect of employment law as a result of no longer being bound to follow ECJ decisions shall change gradually occur. Any divergences over time will likely be mere tinkering of existing law as opposed to wholesale changes and thus EU directives are likely to still form the basis of UK employment laws, with ECJ cases still having a presence in a persuasive rather than binding form.
Free Movement of People
It is likely to be of concern to employers the impact Brexit may have on the free movement of workers. Labour shortages, a loss of talent and mobility restrictions are all ways in which businesses could be affected. It’s expected that the UK will remain in a significant trade relationship with the rest of Europe and it’s possible that the UK Government may be required to retain EU employment law as part of any new deal. Serious discussions around the UK’s continuing access to the EU’s Single Market would be held. In theory, if Brexit is to be implemented, the right to free movement of people between Britain and other member states would cease. In reality, free movement of people would form part of the negotiations for a new relationship between Britain and the EU. The more the UK pushed for the free movement of goods etc, the more the EU would want in return, i.e. free movement of people.
In relation to EU nationals already working in the UK, following a decision to Brexit, transitional arrangements would likely form part of negotiations. It may be negotiated that EU nationals already working in the UK would be permitted to stay in return for similar arrangements for UK citizens working in other EU countries.
Our View
But in what areas of employment law could any changes come about if we were to leave the EU? It’s our opinion that, in the event of Brexit, EU derived employment laws relating to discrimination and family friendly entitlements are unlikely to change given their entrenchment in society and our country’s focus on equality amongst all workers, irrespective of race, gender and so forth.
Should any laws be changed, we believe it is likely to be the agency worker rules (which entitles agency workers to the same rights as an employee after 12 continuous weeks in assignment). The CBI (Confederation of British Industry) has been vocal about their objection to such regulations, describing them as damaging to growth and job creation within the UK, and David Cameron has also raised concerns regarding the same. Additionally, the UK Government may seek to remove the EU derived rule against harmonising employment terms after a business transfer and possibly modify other collective consultation requirements in redundancy and business transfer situations.
The UK’s legal system is so entangled with the EU’s that any separation is likely to be a long, complex and expensive process. In summary, changes in the event of Brexit are highly unlikely to be immediate or drastic. Now to sit tight and ‘wait and see’ following the 23rd June.
