UK votes to leave. EU Referendum results, what now for UK employment law?
It will undoubtedly take business and industry some considerable time to come to terms with the implications of yesterday’s vote for the UK to leave the European Union. For many employers, the primary concern at this stage may be their ability to trade freely in the European market, rather than the implications for UK employment laws.
Having said that, it is likely, at least in the medium to long term, that the framework of UK employment regulation will look somewhat different in a future outside of the EU. Predicting exactly what changes might occur and what the timescale for such changes might be would be impossible at this early stage. It seems most unlikely that anything of substance will change very quickly. In particular, UK courts and tribunals will remain bound to interpret our employment laws to conform with EU directives and regulations until our membership of the EU comes to an end. This will take a minimum of 2.5 years, and possibly considerably longer.
It is also important to understand that no UK employment laws will disappear, simply as a result of our membership of the EU terminating. So TUPE, the Working Time Regulations, the Agency Workers Regulations and other similar EU-derived employment laws will remain on the statute books unless or until the UK parliament decides to repeal or amend them.
One thing that may change immediately following Brexit being concluded, however, is that UK courts and tribunals will no longer have to interpret UK laws in a way that conforms with EU law. Therefore, for example, the arguably strained interpretation that is currently being placed on the Working Time Regulations to ensure that holiday pay must be paid at average earnings may be subject to review.
It is equally important to understand that, as has always been the case, the political leanings of the government in power will be the primary driver of whether employment rights are strengthened or weakened. It is hard to imagine, for example, that if the current Labour leadership took power, any EU-derived employment rights would be watered down in any way.
Should a Conservative government, free from the ‘constraints’ of EU membership, take a further look at de-regulating the employment relationship, one might expect at least some of the following to be under consideration:
Placing a monetary cap on the value of discrimination claims, as is already the case in unfair dismissal claims.
Relaxing the laws on working time and rest breaks.
Repealing the Agency Workers Regulations.
Allowing ‘harmonisation’ of terms and conditions following a TUPE transfer.
Two other potential issues might come into play in the future. Firstly, a further Scottish independence referendum might have consequences for UK employment law, but secondly and perhaps more imminently, part of the price for post-Brexit UK to obtain a trade deal with the EU on favourable terms might be to voluntarily agree to maintain the core of EU-derived social and employment protections.
Therefore, although UK employment law is not immune from the longer term uncertainty that Brexit may bring to UK business and industry, nothing is likely to change very quickly and employers should have time to prepare for any changes to come.