What are the potential effects of Brexit on employment law?

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Posted in:HR and Employment|June 2, 2016 | Join the mailing list

Employment law is one of the key areas which could be significantly affected if a ‘leave’ vote is passed at the referendum on 23 June 2016 and the UK leaves the European Union.

Although uncertainty is an inherent obstacle for those deciding which camp to support, certain employment related areas could be significantly impacted in the event that “Brexit” goes ahead.

Much of UK employment law originates from the EU, but European employment law is incorporated into UK law in various ways. The Equality Act 2010, for example, has been incorporated into UK law as primary legislation. Unless specifically repealed, this legislation would remain in force if the UK leaves the EU. The Working Time Directive, on the other hand, is an EU Directive which was incorporated into UK law through secondary legislation in the form of the Working Time Regulations 1998. If the UK leaves the European Union, then EU Directives would no longer have effect in the UK and secondary legislation such as the Working Time Regulations may disappear altogether.

Taking the example of the Working Time Directive, if an exit were to happen the UK government would no longer be obliged to bring its provisions into force in the UK. Millions of workers could potentially be stripped of employment rights such as paid holiday, rest breaks and the protection of the 48 hour working week. At the time they were introduced, the Conservative party opposed the Working Time Regulations. From the campaigning so far, it is difficult to know what the political proposals will be for employment laws such as this, but it is certainly possible that they will be significantly changed.

Another area of uncertainty in employment law is the effect Brexit could have on the rules on the protection of employment in transfers of undertakings (known as “TUPE” transfers). The TUPE Regulations are complex and can be tricky to implement. Changes are anticipated which would ease the transfer process for businesses and potentially attract more investors to the UK. This may include allowing easier harmonisation of terms and conditions after a transfer (currently transferring employees are not only protected from being dismissed because of the transfer, but all of their previous terms and conditions of employment are protected too).

These suggested effects are speculative only and are just examples relating to a few areas of employment law. In reality, the impact which Brexit could have on all sectors is surrounded by uncertainty. There is no precedent to act as guidance, or clear indication of what UK politicians intend to do with UK employment laws post-Brexit, if it happens.

Watch this space for our June HResource bulletin which will include an update on the referendum result and what the result will mean for UK businesses.

To find out more about the issues raised in this post, or to discuss any queries regarding the impact of Brexit on employment law issues get in touch with Kim Freeman Smith or call +44 (0) 161 829 2599.

The information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by berg or any of its partners or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.

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