27 June 2016

After Brexit – what next for employment law?

Vast numbers of column inches have already been devoted to the recent vote in favour of the UK leaving the European Union. Many of these column inches have focused on the political and economic fallout from the vote. At some stage, however, the gnashing of teeth has to stop and the practical consequences have to be considered. 

Employment law is particularly entwined with the EU. Think about discrimination laws, or TUPE, or limits on working time or the right to paid holiday – all of those are areas of law that are underpinned by European rules and subject to interpretation by the European Court of Justice. Other examples include data protection rules, obligations in relation to collective redundancy consultations and the relatively recently introduced protections for agency workers. So are all these rules going to fall away now that the country has voted in favour of Brexit? The short answer is no, or at least not yet. 

As has been widely reported, the process of a Member State withdrawing from the EU is triggered by the Member State notifying the European Council of its intention to withdraw (in accordance with Article 50 of the Treaty on European Union). There is already some debate as to when and how that notification should be given, but even once the notification has occurred the departing Member State has up to two years to agree the terms of its departure from the EU. Until that point, it is likely that nothing will change. 

Even when the UK does formally leave the EU, it is likely that a lot of EU-derived legislation will remain in place at least for an interim period. Much of this legislation is made pursuant to the European Communities Act 1972 – this Act allows the Government to introduce regulations to give effect to obligations arising under EU law. The TUPE regulations are an example of this. In theory, if the European Communities Act 1972 were repealed, the regulations made under it would fall away. In reality, if the 1972 Act were repealed, the Government would probably do this in a way which would provide for most of the underlying regulations to remain in force until specifically repealed. Returning to TUPE as an example, repealing these regulations would have a very significant effect on how business sales and outsourcings are conducted and would remove a key area of protection for employees. It is unlikely that the Government would want to make such a change by default, or without first consulting interested parties and fully considering the implications. 

Other EU-derived laws have been enacted in primary legislation. The Equality Act 2010, containing the UK’s main anti-discrimination rules, is an example of this. This primary legislation is not dependent on the European Communities Act 1972 remaining in force and would need to be specifically and intentionally repealed. Again, such a step is unlikely to be taken lightly. 

Quite apart from the logistical considerations with regard to removing EU-derived laws from the UK’s rulebook, two other factors are likely to act as a brake on the Government in this respect. Firstly, whatever the source of these rules, they have become an established part of the workplace, and, in some cases social, landscape. Any attempts to significantly curtail workers’ rights is likely to be controversial therefore. Secondly, if the UK wants to retain an open trading relationship with the EU, it may have to continue to adhere to most EU laws as a condition of this – Norway, which is in the European Economic Area but not the EU, has an arrangement of this nature. 

In short, therefore, Brexit is not likely to lead to either immediate or dramatic changes to UK employment law. What is more likely is that, in time, we will some see tinkering with existing laws. (For example, a future Government might chose to make it easier to change terms and conditions in connection with a TUPE transfer). All we can say with real certainty, however, is that the Leave vote has made life more interesting than a Remain vote would have done!

1 comment:

  1. Great Article Chris thank you