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Employment Law

Legal guidance - compliance - software

27 JUN 2016

What does Brexit mean for UK employment law?

What does Brexit mean for UK employment law?
Gareth Edwards
Veale Wasbrough Vizards

Following the UK's vote to leave the EU yesterday, we have entered a period of uncertainty and no doubt attention will now turn to the specifics as to what a future outside of the EU will look like. 

It will be at least two years before the UK leaves the EU, although this can be extended by agreement. There is therefore very unlikely to be immediate reform in the UK employment law sphere, but what might we expect to come?

What's the current position? 

A significant amount of the UK employment law derives from the EU. Key areas are: discrimination rights, collective consultation obligations, transfer of undertakings regulations (TUPE), some family leave, working time regulations and duties to agency workers.

Most UK employment law that does derive from Europe comes from directives, which - unlike regulations - are not directly applicable and automatically binding. Directives are implemented into domestic law by Acts of Parliament and secondary legislation. They will therefore continue in force, notwithstanding the UK's departure from Europe, unless and until they are specifically reformed or repealed.

Note that, although called 'regulations', TUPE derives from the Acquired Rights Directive. Consequently, they will not be immediately affected by the UK's exit from the EU.

However, some UK employment law has nothing to do with Europe, being purely domestic in origin, and therefore will not be directly affected by the outcome of the referendum. Such legislation includes the right not to be unfairly dismissed.

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What does the future hold?

Many of our workplace rights, such an annual leave entitlement, go beyond the minimum standards of the EU and there is no reason to suppose that they will be reviewed or challenged.

An overhaul of UK employment law stemming from the EU is very unlikely. Such legislation has become part of the UK's workplace culture, and wholesale reform would be incredibly costly and disruptive.

However, there are areas, such as the EU derived Agency Workers Regulations and some areas of the Working Time Regulations (for example, recent ECJ decisions on holiday pay), that have been the subject of significant criticism and are perhaps ripe for reform. We may therefore anticipate that these areas come under review in the near future and, of course, following the UK's exit, our government will have more scope to make changes.

That being said, over the next two years, the government will need to negotiate the terms of our exit. The UK's stance in respect of employment law will likely be largely dependent on these terms. In order to maintain an ongoing trade relationship with the EU, the UK may find itself under significant pressure to accept EU social and employment regulation.

In summary, it is likely that the government will take a piecemeal approach to employment law reform. However, the extent of any changes will be heavily influenced by the terms of our exit and the UK's on-going relationship with the EU.