The current situation:
Discrimination rights, family friendly leave, working time regulations, agency workers, collective consultation obligations, business transfers…… As it stands EU legislation unquestionably has a substantial influence on UK employment law, however, this only tells part of the story. The UK had established laws on equal pay, race and disability discrimination and maternity leave before equivalent provisions were implemented by the EU; frequently the UK has offered employees protection in excess of the EU minimum requirements; and, there are areas of UK law that are outside the scope of EU legislation, such as national minimum wage and unfair dismissal.
What might change?
The people have spoken and they want change. The question is will any such changes be as sweeping as employees fear and employers hope? Whilst it is too early to say, it’s unlikely.
Protection against unlawful discrimination is a well-established tenet of UK employment law and it is very unlikely this will be eroded. However, a cap on discrimination compensation could be put in place (similar to that for unfair dismissal) and positive discrimination may be promoted.
Family friendly leave
Shared parental leave (SPL) is a great illustration of the UK going beyond the EU mandate and emphasises our commitment to family friendly leave. The uptake of SPL may be low and the administrative burden of family friendly leave on employers high, but there is little appetite to reduce family friendly rights.
TUPE and Working Time Regulations 1998 (WTR)
TUPE and the Working Time Regulations (WTR) are well established in UK employment law and are further examples of where the UK gold-plated the EU provisions, such as introducing the service provision change and setting statutory annual leave at 5.6 weeks rather than four weeks respectively. Substantial changes are highly unlikely however we could see some tweaks, including relaxing the TUPE consultation provisions and the restrictions on post transfer harmonisation of terms, along with reversing the problematic ECJ holiday pay rulings and removing the maximum 48 hour working week.
The laws on collective redundancy consultation stem from the EU. Many employers see these as obstructive and the current threshold for collective consultation of 20 proposed redundancies could well be increased.
Agency Workers Regulations 2010 (AWR)
The AWR require employers to provide agency workers with certain equal rights and benefits on day one and after 12 weeks. Unfortunately for agency workers these are very unpopular and a full repeal is likely.
In theory, on Brexit, EU citizens will no longer have the automatic right to live and work in the UK. However, in reality, the EU will be against allowing access to the “single market” without requiring freedom of movement. At the least the Government is likely to agree that existing EU migrants can remain in return for reciprocal treatment for UK citizens in other EU states. For future migration, entry may be limited to skilled workers and students and for fixed periods, similar to the current system for non- EU citizens.
What impact could this have on UK businesses?
The extent of any changes will be dependent on the result of the Government’s negotiations with the EU and whether we follow the Norwegian or Swiss models or whether we just rely on our World Trade Organisation membership.
The majority of the expected changes are not substantive and, although they could be argued to be eroding the rights of employees, strong opposition is unlikely. In practice, the main differences will be the removal of both administrative red-tape and provisions that are largely ineffective.
In contrast, freedom of movement will be a fundamental part of the Brexit negotiations and is likely to have the biggest impact on businesses and individuals. Companies that are reliant on labour from the EU may face practical issues, including staff shortages, loss of talent and increased salary costs.
A further consideration, not directly linked to any employment law changes, could be the economic effect of trade tariffs and businesses being wary of investing in the UK until there is some clarity on what Brexit means. The uncertainty and impact on a company’s margins could result in re-organisations, redundancies and recruitment freezes.
What you need to be thinking about now:
Leaving the EU will not make an immediate change to UK employment law. However, there has been an instant impact on many businesses and we advise that companies keep up to date with any developments.
A key practical point is to communicate with employees, especially those that may be impacted by any change to immigration laws, to reassure them that they will be kept informed, that they are welcome and to advise them of their rights (which might include applying for British citizenship).
Irrespective of Brexit, we would always advise that businesses regularly review their employment contracts, policies and procedures, to ensure they are up to date. In light of the strong reaction to the referendum result, we particularly recommend considering implementing and/or flagging to employees an equal opportunities policy and a social media policy. For those companies intending to make any changes to employment terms and conditions they will need to ensure they do so in accordance with the existing terms of employment, current UK law and any applicable European Works Council arrangements.
Lastly, if options such as making redundancies or limiting recruitment are being considered, be conscious that at present there have been no changes and any selection should not be based on whether or not the individual is an EU citizen.