What will happen to UK employment law after Brexit?

Posted on: May 19th, 2017

Unless you have lived under a rock for the past year, you will know that Article 50 was triggered on 29 March 2017, beginning the process for the UK to leave the EU. One question we are now constantly being asked is what will happen to UK employment law? Unfortunately, in true lawyer style, this is not a question we know the answer to, yet.

A substantial proportion of UK employment law comes from the EU, including discrimination rights, the working time regulations, duties to agency workers, the infamous TUPE and family leave. In theory, as soon as we officially leave the EU, the Government could scrap all of this. However, on the basis a lot of UK law goes beyond the EU requirements this was always unlikely.

At the time of writing:

  • Theresa May has confirmed that workers’ existing legal rights will be guaranteed during her time as Prime Minister. However, this should be taken with a healthy pinch of salt, as there is a general election on its way;
  • The ‘Great Repeal Bill’, the new piece of legislation which aims to end the supremacy of EU law in the UK, will convert all current EU employment law into national law; and
  • Judgments made by the European Court of Justice will be given effect in national law at the point we leave the EU. Of course, how this will happen and whether there will be ‘tweaks’ is another matter.

Either way it is business as usual for the time being and it seems highly unlikely that there will be wholesale changes to UK employment law in the short term. But what could Brexit mean in the longer term? Of course, this largely depends upon the outcome of the upcoming general election, but we look at some EU derived employment laws and boldly predict their fate below. Rather than sit on the fence we have limited ourselves to only choosing ‘KEEP’ or ‘BIN’*:

Agency workers rights

There has been suggestion that the Agency Workers Regulations (which give agency workers the right to access job vacancies and facilities from day one and the same terms and conditions as permanent employees from week 12) will be completely revoked post-Brexit. Given that the rights are relatively new compared to the rest of the legal landscape and are largely unfamiliar and unpopular with businesses, our view is BIN.

Discrimination rights

Repealing or watering down the current protections from discrimination is likely to receive widespread uproar from employees and employers alike, so is highly unlikely. The current discrimination rights are also commonly understood by employers and to amend them would not earn the Government any brownie points. However, the Government may choose to place a cap on the currently uncapped compensation limit for successful discrimination claims, similar to that of unfair dismissal. KEEP.

Freedom of movement

This is the biggie and unfortunately the most unclear. Whilst many ‘Leave’ voters were driven by a desire to restrict EU workers’ freedom of movement, UK businesses are likely to struggle if they are unable to recruit much-needed labour that they are used to recruiting from the EU. It remains to be seen what stance the Government will take in restricting or amending the free movement of EU workers, and how the free movement of persons will play as a negotiating tool in the discussions between the UK and the rest of the EU. ??? We are brave, not crazy!

Holiday and working time

The rights to paid holiday and the rules on working time and rest breaks are well entrenched in the minds of UK employers and employees, so substantial changes or repeal are unlikely. However, Brexit may be the prime time for the Government to clear up the uncertainty surrounding calculating holiday pay, particularly regarding how voluntary and compulsory overtime and commission should be correctly included following much publicised recent case law. BIN EU case law on holiday pay but KEEP the rest.

TUPE (Transfer of Undertakings (Protection of Employment)) Regulations

The thought of TUPE bring shivers and cold sweats to most employers, employment lawyers and commercial advisors (actually pretty much anyone who ever has to deal with it!) and is regarded by some as anti-business and unnecessarily complicated. Despite this negative press, the principle that employees should transfer with a business is unlikely to be scrapped entirely and it is more likely that the Government will make it more business friendly. For example, some commentators have suggested that the Government will choose to allow employers to harmonise terms following a TUPE transfer. KEEP but tweak.

*For the avoidance of doubt, anyone choosing to bet on the outcome and rely on our predictions does so at their own risk. Unless they win in which case we reserve the right to demand a share…