The Chartered Institute of Payroll Professionals
Policy Bi-Monthly Newsletter – September 2016
What does Brexit mean for UK employment law? 17 August 2016
James Davies from law firm Lewis Silkin has written an informative article which considers some of the potential implications of the UK leaving the EU for employers and employees. On 23 June 2016, the UK voted to leave the European Union. The implications for the workplace could be huge, as a significant proportion of our employment law comes from Brussels. Once out of the EU, the UK government could in theory repeal discrimination laws, collective consultation obligations, transfer of undertakings regulations, family leave, working time rules and duties to agency workers among other laws. But would the government really do that?
Possible implications of a Brexit Many EU employment protections, such as equal pay, race and disability discrimination laws, and the right of return from maternity leave existed in some form in the UK before being imposed by Europe. It seems unlikely that a UK government would rescind rights that predate European laws. Another reason that the government might be reluctant to repeal employment law protection is that much of it is regarded, by employers, employees and even by politicians, as a good thing. Employment rights such as family leave, discrimination law and the right to paid holiday are now widely accepted; indeed, family leave rights in this country go further than required by EU directives. One very pragmatic reason for the UK to continue to follow European employment law is that, it will wish to stay in some sort of trading relationship with the EU, its biggest export partner, albeit not full EU membership. The arrangements that Switzerland and countries in the European Economic Area, such as Norway, have with the EU involve adherence to a significant amount of EU employment law. Any trade agreement between the UK and the EU is likely to require something similar. It will take some time for the UK to extricate itself from the EU. Once the UK has given the EU formal notification of its withdrawal, there will be a two year period in which the parties will negotiate the terms of departure and possibly put in place new trading arrangements. Some commentators believe it will take considerably longer than that to agree exit terms but, unless both the UK and the European Council agree to extend negotiations the UK will simply cease to be a member of the EU at this point. Even after the process has been completed and the UK has left the EU (and assuming no other restrictions imposed by another free trade agreement), European law might continue to apply in one way or another because disentangling it from UK law will take some time. Some EU-derived laws are contained in secondary legislation made under powers given by the European Communities Act 1972 (ECA), the law that implements EU law in the UK. If the ECA is repealed, all the secondary legislation made under it - such as the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) - will fall away unless preserved by another piece of legislation. The repeal of the ECA would not, however, affect EU law implemented through primary legislation, such as the Equality Act 2010 (EqA). Primary legislation would remain in force until repealed piece by piece. It is therefore unlikely that all EU law will be removed at once. The approach is more likely to be gradual, with legislation being repealed – or merely modified – over time. So, if freed from European constraints, what is it likely that the government would actually change? Agency Workers The most likely contender for complete revocation is the Agency Workers Regulations 2010. These are unwieldy, unpopular with business and not noticeably popular with workers either. Discrimination and family leave For the reasons already mentioned, any wholesale repeal of equality protection or family leave seems improbable. Although the government could repeal the EqA after exiting the EU, it would be a controversial move. It is difficult to imagine many employers arguing that they should be free to discriminate and any change to the existing regime of direct discrimination, indirect discrimination and harassment seems unlikely. There may, however, be some small modifications. It is possible that, following a Brexit, a cap could be imposed on compensation for unlawful discrimination. Another possibility is that the government could change the law to allow positive discrimination in favour of under-represented groups in a way that is currently impermissible under EU law. Rights to parental and family leave in the UK are a mixture of rights deriving from the EU and rights originating in the UK. UK maternity leave and pay preceded the EU rights and are more generous in some respects. The new right to shared parental leave and the right to request flexible working are both purely domestic in origin. Accordingly, although some critics consider these rights to be a burden on business, there seems little political appetite for their repeal or even for watering them down.
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