Brexit: what this means for Employment Law

Posted by Ruth Christy on
The people have decided – the UK will leave the European Union. So what happens now for Employment laws?

The first point is that nothing changes today or in the coming months. Once the Prime Minister triggers the withdrawal process, we remain a member of the EU until either an exit is negotiated or two years have passed. As commentators predict that there will be no swift exit deal - we could still be in the EU for the next two years or possibly longer.

In terms of laws, Parliament will be looking at the European Communities Act 1972 (ECA) and considering which other laws it should repeal and when. Those in the legal sector suggest that a straight repeal of the ECA would cause legal and commercial chaos, with the more likely option being that Acts of Parliament and Regulations which implement EU laws will be repealed or amended piece by piece.

A more interesting question is how our courts will respond. Whilst we remain a member of the EU, UK courts would still have to give effect to EU law in interpreting our domestic laws. Even after we have left the EU, lower courts would in theory still be bound by decisions of the higher courts which have given effect to EU law unless the relevant law has been changed. The position is not entirely clear, though, because the lower courts may become emboldened to 'distinguish' those decisions on the basis that EU law is no longer relevant. Alternatively, it is possible that higher courts, whilst no longer bound by EU law, would still give some consideration to EU rulings in their interpretation of domestic laws.

In our previous article, we considered how in reality Employment law was unlikely to see too many dramatic changes from a Brexit. Despite the claims that businesses are stifled by EU labour laws, the fact is that that many Employment law rights either originated in the UK or have become deeply embedded in UK law as the UK's attitudes to social issues have evolved. A move to scale back all but the most minor Employment law rights would, in all likelihood, be politically unpopular.

In addition, potential changes could be severely limited by the subsequent trade deal negotiated – other non-EU countries such as Norway and Switzerland have not in practice been able to free themselves of many EU labour laws. In several areas, such as data protection, we are likely to produce laws that mirror EU legislation to ensure we can conduct business effectively.

Such changes as there are could be seen in the areas of collective consultation rights, clarification on Working Time rights such as paid holiday and a repeal of the 48-hour limit, tweaks to the Transfer of Undertakings (Protection of Employment) Regulations 2006, and potentially more significant changes to/removal of the Agency Workers Regulations 2010 (see our previous article for further details).

As well as the immediate impact on markets and the business outlook for employers, today's result will also throw up longer-term issues, such as the migration of staff in and out of the UK and a potential re-run of the Scottish referendum. Unfortunately, the lack of a clear indication as to what any exit deal would look like makes it very difficult for businesses to plan for it in any practical way.

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Ruth provides guidance for clients and keeps them up to date with the fast pace of change in employment law.

Ruth Christy
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