Brexit: Boom or Bust for Employment Rights?

11 Mar 2016

As the debate on whether or not the UK should leave the EU continues, there is increasing interest on what an ‘Out’ vote would mean in the context of employment legislation.

It is a truism that the employment law is an area that has been heavily influenced by the impact of EU Treaties and Directives.  However,  far less clear is what, if any, changes would be brought about were the UK to leave the EU.  The extent to which a government would want to tamper with the current structure of employment rights will depend on many political and economic factors.

Here is our headline analysis of areas that could be changed if a UK government sought to row back on more than forty years of accumulated rights and case law which are inter-twined with ‘home grown’ regulation:

Unfair Dismissal – little change as this is an area that does not derive from EU law;

Notice periods, unlawful deductions and other contractual terms – little change as these are also not EU-derived rights;

Discrimination – unlikely to be fundamentally repealed but there could be some modest change at the margins, e.g. the introduction of a cap for the ‘loss of earnings’ element of compensation to, say, 12 months gross pay to bring it in line with unfair dismissal, and the tightening of the rules on extending time limits for claims (from ‘just and equitable’ to ‘not reasonably practicable’, again as with unfair dismissal);

Working Time – harder to call.  The 48 hour limit is already subject to many qualifications, as well as the general opt out.  The restriction on night work would probably stay. Holiday entitlement was a contentious area when first introduced, but it would be hugely unpopular if, for instance, the four week allowance were to revert to being inclusive of public holidays;

TUPE – likely to be a symbolic target for repeal, however we think it more likely that it would be diluted instead, with  some TUPE-lite provisions being introduced;

Agency Workers – another symbolic target, and paring back if not repeal is likely;

National Living/Minimum Wage – little change as not derived from EU law;

Health and Safety – some repeal of detailed regulations possible with increased emphasis on enforcement, perhaps funded through increased fines adopting the rationale of ‘polluter pays’;

Data Protection – in theory there could be wholesale repeal, but the need for safeguarding data in the context of international trade and multinational companies would mean little change is  likely in practice;

Trade Unions – their regulation is largely unaffected by EU membership; and

Worker Immigration –  another political ‘hot potato’.  Unless the UK had an EEA-style agreement with the EU states, then a series of bi-lateral agreements is likely, with an increased reliance on quotas and points-based assessments.

Collective redundancy consultation – often unpopular with employers, this could be a target for complete repeal.

Human rights – although not actually derived from EU law at all (but from an entirely separate pan-European treaty reflecting the UN Declaration of Human Rights), the same sort of anti-European feeling that led to a Brexit could also lead to the UK trying to withdraw from the European Convention on Human Rights and putting its own rules in place instead.

Whatever the outcome of the vote on 23 June 2016, our view is that there will be relatively modest changes over the next few years in relation to the employment law landscape.  However, the comparison of our approach to trade unions and those of other European countries shows that our approach to regulation of the workplace is often very different, and so over a longer period it is not unreasonable to expect some greater divergence as regards individual employment rights.  Whether that difference of approach will be tempered by the UK’s desire to secure preferential trading deals with others, remains to be seen.

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