Brexit – what does it mean for employers?

Brexit – what does it mean for employers?

This week’s update considers the possible impact of Brexit on UK employment law. Following the decision of the United Kingdom public to leave the European Union, the clock is now potentially ticking towards an actual UK exit (or ‘Brexit’). However, the vote to leave has no legal force in itself, and the legal process of divorce will only commence once formal notice is served by the Government under Article 50.  In view of the two years’ notice required under Article 50, any actual changes are unlikely to be seen before Autumn 2018 at the earliest.

It is important to note that not all areas of UK employment law fall within the scope of EU law.  Matters such as National Minimum Wage and unfair dismissal are regulated by UK legislation, and are therefore unlikely to be affected by Brexit.

However, a number of key areas of employment law, including family rights, TUPE and collective redundancy consultation, working time and discrimination rights stem from EU legislation.  It is these strands of employment law which may potentially be most affected by Brexit.

However, the extent of any impact of Brexit on UK employment law will very largely depend on the specific trading arrangements agreed as part of the Brexit negotiations.  If the UK adopts a model similar to that followed in Switzerland or Norway, there are still likely to be significant restrictions on repealing EU-based law. In particular, if the UK follows Norway and joins the EEA, they would still be subject to most aspects of European employment law and its directives (such as the Working Time and Acquired Rights Directives).

Only if the UK seeks to negotiate a bespoke relationship with the EU might substantial changes be implemented.  However, having the ability to repeal longstanding legislation is very different to actually repealing it. In reality, much of the EU-based employment law has been ‘gold plated’ by the UK legislature to provide enhanced rights to UK employees. With this in mind, it would appear to be unlikely that significant steps will be taken to remove these rights simply because of a Brexit.

It might however be the case that certain aspects of employment law, such as the ever-changing landscape on holiday pay, working time or agency regulations, might be trimmed back once we have left the EU and the influence of the European Courts has disappeared. Unfortunately, it is too early to tell whether some, or all, of these amendments will be brought into effect in the future.

In view of the likely timescale of Brexit, and the politically sensitive nature of possible repeals, we consider it likely that post-Brexit employment law changes may well form a key part of parties’ manifestos in the lead up to the next general election. Accordingly, it should become much clearer nearer the time which of the leading political parties would plan to make changes to the employment law landscape.

From a practical perspective, we advise employers to communicate often and openly with their staff during these uncertain times, and to reassure them that no changes will be brought about in the immediate future. Employers should explain that staff will be given as much notice as possible of any changes in the future, and that they will work together to minimise any adverse effects.

When the future employment law landscape becomes clearer, we will provide further updates. We will also be holding a series of client presentations at our Exeter and London offices to examine these issues in greater depth, and to address your questions. We will be publishing the dates for those presentations shortly, so watch this space!

If, however, you have any immediate questions, please contact a member of the Employment Team.