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The Implications for Employment Law if the UK votes to leave the EU

The possibility of a UK exit from the European Union (EU) – colloquially known as a Brexit – is high on everyone’s agenda. As we move ever nearer to the “in-out” referendum vote on whether or not the UK should remain a member of the EU, it’s time to consider the possible implications on UK employment law. This is because a significant proportion of the UK’s employment law comes from the EU, including discrimination rights, collective consultation obligations, transfer of undertakings regulations, family leave, working time regulations and duties to agencies workers.

In the event of a Brexit, the UK Government would regain parliamentary sovereignty and so would no longer be bound to have national legislation reflecting the many EU directives covering laws in the workplace. The UK would appear to be at liberty to abolish or amend existing its employment law that comes from the EU as it saw fit and the UK Courts and Tribunals would no longer have to defer to the European Court of Justice in cases involving EU law. Below we set out some thoughts on how this may operate in practice.

Relaxation of discrimination laws?

Slightly. The Equality Act 2010 (EqA 2010), which implements the UK’s laws against discrimination, is primary legislation, so would remain in force even if the legislation that incorporates EU law (the European Communities Act 1972 (ECA 1972)) is repealed. Although the government could repeal the EqA 2010 after exiting the EU, to do so would be controversial. It is difficult to imagine many employers arguing that they should be free to discriminate on any of the protected grounds.

Where the Government may choose to act though is in respect of compensation limits, and following an EU exit it would be free to legislate to introduce caps on compensation in respect of discrimination claims and could abolish damages for injury to feelings.  The Government may permit positive discrimination in limited circumstances, for example, in an attempt to assist greater gender or racial balance in the boardroom.

Fewer troublesome family friendly rights?

We doubt it. The direction of travel has for some time been towards the extension of family friendly rights to create an equal environment which allows women to progress in their careers. The right to shared parental leave, for example, is entirely domestic in origin so it would be very unlikely this would change. The same applies to the extended rights to request flexible working introduced in July last year – again this was a domestic measure only and not introduced because of EU law. Similarly, in relation to maternity leave, the domestic rights are much more generous than those under EU law so again this is unlikely to change at all.

Working time and Holiday

Without a shadow of a doubt these would be curtailed given the fact that they are almost universally unpopular with employers both in principle and in practice due to compliance costs. The long running mess around holiday pay while sick and now the overtime and commission cases do nothing to support the case for keeping these rules. 

Following a Brexit, the government may want to retain a right to paid holiday based on basic pay and with limited rights to accrue and carry it over into new holiday years. The UK may also wish to remove the cap on maximum weekly working hours under the WTR.

Goodbye to TUPE?

Unfortunately not. The Transfer of Undertakings (Protection of Employment) Regulations 2006 (SI 2006/246) (TUPE) attracts a lot of negative press but the principle that employees in a transferred business or undertaking should transfer with it is often useful for businesses and is incorporated and priced into many commercial outsourcing agreements. Although there may be some businesses that would like to get rid of TUPE, it seems more likely that, following a Brexit, the government would make small changes to make it more business friendly. For example, it might choose to make it easier to harmonise terms following a TUPE transfer.

Collective redundancy consultation

This is an area where possible changes be could be made, the most probable being either to the threshold numbers of redundancies (currently 20 or greater, and 100 or greater) triggering collective consultation and/or the applicable time frame (currently 90 days over which the redundancies are made).  Collective redundancy consultation obligations were reduced by the last government. The obligation is now not particularly onerous so it is not obvious what would happen to this obligation following a Brexit.

Data protection

Given the rampant increase in collation, storage and use of personal data and growing public concern around the use and misuse of personal data both within and outside of the workplace, it seems highly unlikely that there will be any lessening of the current data protection framework. Thus, there will be no end to those time consuming data subject access requests from aggrieved employees any time soon.

Immigration and freedom of movement

There are currently large numbers of UK nationals living and working in other EU countries and many nationals of other EU member states living and working in the UK. Following a Brexit, these individuals would no longer have the automatic right to do this.

It would not seem to be in anyone’s interests (whether the individuals’, their employers’ or the national governments’) to require them to return to their country of origin. It therefore seems likely that the UK government would agree an amnesty, whereby existing EU migrants could stay (at least for a reasonable period) in return for permission for UK citizens abroad to remain where they are.

Conclusion

A vote for Brexit on 23 June 2016 will undoubtedly pave the way for legislative changes and shakeup the workplace, however the implications are dependent upon mechanics of exit and the model for any replacement UK / EU relationship, both of which are currently unknown. In any event, any formal exit would not happen for at least two years following a vote to leave due to the fact that the UK’s legal system has become tightly embroiled with that of the EU, and the disentangling the UK from its EU commitments in the event of Brexit is likely to be a lengthy, complex and an expensive process.

If you would like to discuss any employment law issues, then give us a call on 0113 350 4030 or email hello@scesolicitors.co.uk.

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SCE Solicitors is a boutique employment law and dispute resolution practice based in Leeds which advises clients nationwide.  Please note that the information in this blog is to provide information of general interest in a summary manner and should not be construed as individual legal advice. Readers should consult with SCE Solicitors or other professional counsel before acting on the information contained here.

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