What does the 'leave' vote mean for UK employment law?

Oct 12, 2016
On 23 June the UK voted in the EU Referendum to leave the European Union. What implications will there be on UK employment law?

Brexit implications

A lot of UK employment legislation is derived from the EU, for example discrimination rights, TUPE and family friendly rights such as maternity leave.   

An exit from the EU theoretically would allow the UK to repeal all EU derived laws.   It is very unlikely that this would happen and any changes would not happen overnight as there would be a long transition period if any changes were implemented.  Particularly as we already know it will take a minimum of two years for the UK to exit in any event.   

Below we take a brief look at the possible implications of Brexit on UK employment law.   

Transfer of undertakings 

It is very unlikely that TUPE laws will be repealed however, there may be a push from businesses to persuade the government to make the changes so that it is easier to harmonise terms and conditions post transfer or perhaps reduce the heavy burdens of the information and consultation procedures.   

Holidays  

The issue of holiday pay has been a contentious one for many years with many employers unhappy with the right of employees to accrue holiday whilst on sick leave. Recent unpopular European court decisions have also dictated UK working time laws concerning the inclusion of commission and non-guaranteed overtime in the calculation of holiday pay.  It may be that Brexit would allow the government to consider changing the regulations so that they are more business friendly.  

Discrimination law 

There is an appetite to limit the compensation employees may be awarded if successful in a discrimination claim.  At present, compensation is unlimited.  It is very unlikely any other changes can be envisioned for discrimination law purely on the basis that discrimination and harassment is not something the UK government would look to encourage.  

Immigration  

Much of the workforce is multicultural; many from Eastern Europe in particular. Freedom of movement is an EU principle which is likely to be abolished with Brexit. Workers who currently reside in the UK are likely to stay but it would become difficult for newer economic migrants to enter. The current non-EU migrant system is points-based for skilled workers which may be the way forward for our European neighbours.  This would also potentially mean more stringent checks carried out by the Home Office on employees’ rights to work in the UK and therefore more potential audits.    

Conclusion  

Whilst UK employment law is almost certainly not going to change significantly despite the election results, the UK political landscape will change dramatically and there is little information available for us to allow us to see too much in the future: so, watch this space …  
 

Rafia Ahmad 

Rafia AhmadRafia Ahmad trained and qualified in a London City law firm and was in-house counsel for a London-based New York investment bank specialising in employment law for eight years. She joined Backhouse Jones in 2014 and advises bus and coach companies on all employment matters both contentious and non-contentious including tribunal proceedings, a range of complex HR issues, regularly drafts and updates employment documentation, advises on TUPE, corporate support; she is experienced in negotiating exit packages and regularly advises on the terms of settlement agreements.