Guest article: The Legal Impact of Brexit on People’s Employment Rights

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ViewsAugust 8th, 2016

The impact on employment rights was frequently raised in the run-up to the EU referendum, so what does the result now mean for this area of legislation? In this guest article, Michael Imperato considers how  and when things may start changing in almost all aspects of employment rights.

Many of our laws stem from Europe, with some claiming that as much as 70% of UK laws are linked in some way to European regulations or directives. Arising out of the historic Brexit vote, there is a concern that the UK’s legal system could be hugely impacted, and that hard fought rights and protections of individuals will be lost or at the very least, diluted.

Employment Law has often been cited as an area where European legislation dominates, with the implication that departing the EU will radically change it. In theory, following withdrawal from the EU, the employment law protections which are guaranteed by the EU – such as minimum holiday allowances, parental leave and rights in the event of transfers of undertakings – could be removed from domestic legislation.

However, much that is in place will remain in place. In the short-term, until such time as the UK leaves the EU, we will remain bound by European legislation which will therefore remain in force as it is now. The referendum result has no immediate impact on employment law. It does not repeal laws that derive from the EU. Rather, the referendum was an advisory referendum and the result has no direct legal effect.

The right of free movement of people also remains in effect for the time being. For people who have already exercised their right of free movement – UK citizens living in other member states and other EU nationals living here – the long-term situation post-withdrawal is not yet clear. There is precedent under international law that if a person has exercised a right under an international treaty, they may continue to enjoy the benefit of that right if the treaty ends. This idea of acquired rights, or vested rights, would suggest that people will not be ‘sent home’. Negotiations on the UK’s future relationship with the EU’s internal market will determine whether the UK will retain free movement for its own citizens and the citizens of other EU countries once it has fully withdrawn from the EU).

If, following full withdrawal from the EU, the UK were to become party to the EEA (European Economic Area) Agreement – ‘the Norway option’ – it would, in practical terms, remain subject to EU rules, including free movement. Under the terms of the agreement, EEA members agree to ‘approximation of laws’ relating to the internal market, meaning that EU labour law directives are effectively adopted. The same is true for health and safety legislation. Both Norway and Switzerland (which are not EU members) have to observe the principle of free movement of people in return for participation in the EU’s internal market. But given the high profile that immigration (i.e. ‘free movement’) played in the referendum, it remains to be seen if ‘the Norway option’ will indeed be the way forward.

Longer term, the UK’s on-going relationship with EU Member States, as well as our own workplace practices, is likely to demand that the UK retains many of the EU-derived laws that have already been incorporated into domestic legislation.

This is not to say that a government will not take the opportunity to scrutinise some employment rights derived from the EU. There are some specific areas, which will certainly come under the microscope.

Working Time

One might expect big changes here.  The Working Time Directive imposes a maximum working week and minimum paid statutory holidays.  Without such legislation, employers could, in theory, impose longer working weeks with more limited rest breaks and no paid holiday and there would be no fall-back legal protections for employees.  There have always been critics of the Directive and there are likely to be attempts to make changes.

TUPE

The UK Government has already consulted on a proposal to repeal the service provision change test under TUPE in 2014, but it decided that doing so would create uncertainty for business and no changes were made.  Post Brexit the UK Government may make changes to make the TUPE Regulations more business friendly, for instance, making it easier for employers to ‘harmonise’ terms and conditions or to dismiss following a transfer.

Agency Workers

The Agency Worker Regulations currently provide the minimum protection to agency workers required under EU law and have not been popular with businesses. The legislation is viewed by many on the right as unnecessary red tape creating a burden. There will be temptation to reduce the impact of this legislation, including a complete repeal if possible or removing the requirement for pay parity after 12 weeks.

Discrimination

Domestic protections against sex, race and disability discrimination developed largely outside of EU intervention. It is thought inconceivable that the Government would repeal the Equality Act.  Anti-discrimination laws are almost certainly here to stay. However, uncapped discrimination awards may be vulnerable to change.  The original compensation cap was repealed by the EU’s Sex Discrimination and Equal Pay (Remedies) Regulations 1993/2798, made for the purpose of ensuring that the remedies available under domestic legislation relating to sex discrimination and to equal pay, complied with the requirements of Council Directives (following the judgement of the European Court of Justice in Case No C271/91-Marshall v Southampton and South-West Hampshire Area Health Authority (No.2)). Removal of the equivalent cap in the Race Relations Act 1976 followed shortly behind.  Brexit could present the Government with an opportunity to reintroduce a maximum cap, as already exists for unfair dismissal awards.

Maternity rights

Many of the rights in the UK that protect women during pregnancy and maternity leave emanate from Europe. Interestingly, the right to statutory maternity pay in the UK exceeds the minimum required by the Equal Treatment Directive, with the EU minimum being 14 weeks’ paid leave. It is unlikely that any Government would want to be seen to be removing existing equality rights but it is possible that these rights could be vulnerable in the face of a Government in favour of deregulation, for instance by repealing the right of first refusal in a redundancy situation or the right to accrue annual leave whilst on maternity leave.

Collective redundancies

Also often considered as a burden on business, amendments to the collective consultation obligations could be seen as an easy win for the Government in the event of Brexit. There could be a further reduction in the consultation period.

Conclusion

Given that there is a two year notice period to exit the EU, there are unlikely to be immediate changes to EU derived UK law.  Much will depend on the negotiations over the future relationship between the UK and the EU.  That is not to say that an emboldened, right of centre Conservative Government, with leave campaigners prominent, will be impatient to deliver deregulation, and would seek to make further dramatic changes to domestic UK  law, for example, in employment law, reversing the living wage and further reducing the cap on unfair dismissal compensation.  We have already seen significant effects on access to justice through the introduction of Employment Tribunal fees with no sign of any change of policy.  There is no reason to suspect that the appetite for deregulation has been sated or that further amendments to domestic legislation would be delayed in the event of Brexit negotiations.  Longer term, freed or at least freer of EU influence UK employment law could start to look dramatically different.

The real significance of Brexit is that the direction of travel of the last forty years will now be irredeemably reversed. The old ‘Common Market’, which the UK joined in 1973 was predominantly business focused. Yet over time the European Union has been seen as a place where the employee and vulnerable people look for protection and assistance. Going forward, British workers will no longer be able to benefit from future similar EU directives and regulations and they face the real risk hard won rights not being developed further, or diluted, or even lost.

Michael Imperato is a Partner at South Wales solicitors Watkins and Gunn, and a Trustee of the Bevan Foundation.

Tagged with: BAME & migrants

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