What will be the impact of BREXIT on employment law?

Insights - 07/02/2019

Currently the UK is scheduled to leave the EU at 11pm GMT on Friday 29 March 2019.

The extent to which Brexit impacts UK employment law will in part depend on whether or not a deal can be reached and the terms of the UK’s future relationship with the EU.

If there is a deal, it is not unreasonable to think it may be dependent on the EU being satisfied as to certain levels of employment protection within the UK following the split. This factor combined with a planned transitional period from 29 March 2019 until 31 December 2020 intended to minimise the short-term disruption of Brexit, means that immediate and drastic changes to UK employment law would seem unlikely.

If there is a “no deal Brexit”, the situation would be a little different as it will be down to Parliament to decide whether our employment laws continue as they are or not following Brexit.

Although Parliament has shown an appetite for introducing significant changes and reducing worker rights in the past, most notably the increase of the length of qualifying service from one year to two years since 2012 for key employment rights, including the right not to be unfairly dismissed and the introduction of tribunal fees in 2013 (subsequently repealed by the Supreme Court), there are a number of reasons, regardless of whether or not there is a deal, as to why a similar approach may not be adopted immediately moving forward:

 1. Parliament will need time to consider what reform is required and viable

Not only would thought need to be given as to how the technical intricacies of existing laws could be unwound but there would also be practical implications. Many legal rights are written into an individuals’ employment contract. If key rights were suddenly withdrawn, this could cause confusion for all parties and the UK could be left with an aggrieved workforce and numerous employers facing breach of contract claims for which they would seek to hold Parliament accountable.

 2. The UK will still need to maintain a good trade relationship with Europe

Significant upheaval to UK businesses and its workforce at a time when it needs stability and productivity could be bad for business and would not endear the UK to the EU when fostering its new relationship and seeking to prove itself as a viable trading partner.

 3. Many of the UK’s employment laws do not stem from the EU

The UK chose to introduce certain laws independent of the EU, including protection for workers from unfair dismissal, rights to national minimum wage, rights to statutory redundancy and rights to request flexible working. Given the UK adopted these laws of their own accord, there would be no reason why leaving the EU would suddenly change the UK’s position on these rights.

 4. The UK has already chosen to offer enhanced rights

Even with many employment law rights that do stem from the EU, the UK chose to offer enhanced protection. For example the EU only requires member states (including the UK) to provide 14 weeks maternity leave, the UK chose to offer 52 weeks. The EU only requires member states to offer 4 weeks holiday per year. The UK chose to offer its workers 5.6 weeks.

As with above, given this was the UK’s choice, it would seem strange for it to suddenly change its mind as a result of Brexit.

 5. The UK has already committed to maintaining certain laws

Knowing Brexit was coming, the UK has already committed to continuing with certain laws, including the recent changes to data protection via the introduction of the General Data Protection Regulations (GDPR).

Moving forward

Whilst we do not anticipate immediate drastic change, there are a number of laws that seem ripe for review in the future, including:

a) Harmonisation of terms following TUPE

Currently TUPE prevents employers from harmonising the terms and conditions of employment of transferring staff with existing staff following a transfer. This has always been a source of frustration to business owners and the Government may take the opportunity to review these provisions so as to make them easier to navigate and more business friendly.

b) Annual leave

Although the amount of holiday may remain untouched, there have been a number of unpopular decisions from Europe that have impacted annual leave in the UK. For example the right for holiday to accrue during sickness absence and the requirement that holiday pay is to include an element for commission and certain overtime payments etc. rather than just basic pay.

The Government has already indicated plans to clarify holiday pay calculations (see further details in “Good Work Plan” blog) and Brexit would seem to offer a good opportunity to address the law dealing with annual leave further.

c) Agency worker regulations

Employers often see the regulations surrounding agency workers as constricting and further changes will mean all agency workers will soon have the right to pay parity with employees after 12 weeks (see further details in “Good Work Plan” blog).

The UK will want to evidence the advantages of Brexit to business owners and introducing changes to the regulations surrounding agency workers could be a popular choice for that.

d) Discrimination laws

It would be very contentious if laws offering protection from discrimination disappeared altogether post-Brexit. We might see tweaks though, for example the introduction of a cap on discrimination-based compensation (in a similar way as for unfair dismissal claims) which would at least provide employers with a little more financial certainty.

Many changes of course will be dependent on the political make up of Britain following Brexit and would happen alongside other planned changes (see further details in “Good Work Plan” blog). We will continue to update you on developments in this area.

In the meantime should you have any questions on the issues set out here contact your usual adviser in the team or Emma McLoughlin at [email protected] or by phone 020 8971 1088. 

Other articles from February's newsletter

Disclaimer:

Although correct at the time of publication, the contents of this newsletter/blog are intended for general information purposes only and shall not be deemed to be, or constitute, legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. Please contact us for the latest legal position.