A substantial amount of our domestic employment legislation comes from the European Union, meaning that UK employment law is heavily influenced by Europe. The areas in which EU law has had and continues to have a significant effect include discrimination; family leave; the protection of pregnant workers; working time; the transfer of undertakings; collective consultation obligations and duties to agency, part-time and fixed-term workers.
Many employers are therefore wondering how a “Brexit” vote would impact upon UK employment law, and what it will mean for them.
What will happen to existing UK laws that come from the EU?
In theory, if the UK leaves the EU, it would be open to the Government to repeal or review all of the UK laws which emanate from Europe. In reality, this is highly unlikely. Much of the EU legislation governing employment was already in place in the UK, such as equal pay, race and disability discrimination and maternity leave. In some areas, UK employment law goes further than that required by EU legislation. For example, the EU Working Time Directive dictates that full time workers are entitled to receive 20 days’ paid annual leave, whereas the UK statutory minimum is 28 days. The recent introduction of shared parental leave and pay and the right to request flexible working are purely domestic rights with no EU influence whatsoever. Therefore it is not expected that the Government will seek to repeal such laws.
Any proposal to repeal fundamental employment rights, such as the right not to be discriminated against on the grounds of a protected characteristic, would undoubtedly result in unrest and controversy. It is difficult to envisage a situation where employers would argue that they should be allowed to do so in any event. That aside, it would be very difficult to separate the rights engrained into UK law which come from Europe from those that are domestic, and would require new legislation.
It is also likely that the UK will continue to observe EU employment laws to some extent if it wishes to preserve a relationship with the EU. In terms of negotiating any future trading agreement for example, the UK will have to be able to show that it adheres to minimum standards in relation to employment law.
In summary, much of what we have today is unlikely to change on the back of a Brexit.
What about case law?
It remains to be seen what would happen to precedents already set by the Court of Justice of the European Union in the event of a Brexit vote. Whilst future decisions of the European Courts would cease to have binding authority on UK Courts and Tribunals, some commentators are predicting that they would still be persuasive, meaning that domestic Courts would continue to be influenced by Europe.
Various decisions of the European Courts on the area of holiday pay have proved unpopular with UK employers, particularly those relating to what payments should be included in holiday pay and the right to keep accruing holiday whilst on sick leave. It may be that the Government clarifies this area in the event of a Brexit with new legislation; however, in the meantime it is likely that such issues will be battled out in the Courts and Tribunals, with advocates having to persuade judges that previous domestic decisions, based upon European decisions, should no longer be followed.
In the event of Brexit, there is likely to be an increase in case law as claimants try to reverse previously ‘decided’ issues.
Which areas of UK employment law might be changed following a Brexit?
It seems more likely that the Government would prefer to either remove or “tweak” legislation which has proved to be unpopular with UK employers if the UK were to leave the EU, particularly where such changes would be relatively uncontroversial, meaning less resistance and pressure from trade unions and pressure groups.
The Transfer of Undertakings (Protection of Employment) Regulations 2006 restrict a transferee employer’s rights to change transferring employees’ terms and conditions of employment after a transfer has taken place. It can, for example, be difficult for employers to harmonise working conditions throughout the workforce following a transfer, which often frustrates employers. Some commentators are predicting that the Government could make it easier for employers to make such changes, whilst preserving the main protection afforded by TUPE.
It is also predicted that the Agency Worker Regulations 2010 may be susceptible to amendment or complete repeal in the event of a Brexit. The Regulations provide protection for agency workers, most notably the right to the same basic working and employment conditions as direct employees after 12 weeks of an assignment. Many employers have reported that the Regulations have caused them difficulties in seeking temporary workers to fill short-term requirements.
What about non-UK workers?
Many employers are wondering how a “Leave” vote would affect immigration. As matters stand, the principle of the free movement of workers means that EU citizens and their families can live or work in any other EU member state. Following a Brexit, these individuals would no longer have an automatic right to do this. It is not clear how this right would be affected in the short term; although it is anticipated that in the immediate aftermath of a Brexit, EU citizens already working in the UK would be allowed to continue to do so. Longer-term, employers and non-UK EU citizens could be affected by more restrictions.
Although it is difficult to predict how the UK’s employment laws will be affected by a Brexit, it is unlikely that in the short term the Government will tear up all those laws which are affected by EU Law. In any event, the UK has to give 2 years’ notice of the intention to leave the EU, allowing time to determine what laws will stay and what will go.
Employers are unlikely to have to deal with an avalanche of changes. It is more likely that the Government will take a piecemeal approach to introducing changes. It seems unlikely that UK employment law will be transformed in significant ways immediately, and the status quo is expected to remain in the short term in the event of a Brexit vote.
Please note that nothing in this Employment Alert is intended to imply that Baines Wilson LLP favours either side of the campaign!
If you have any questions in relation to employment law or HR please contact Joanne Holborn, Tom Scaife or Caroline Rayner on 01228 552600 or 01524 548494.