BREXIT AND CHANGES TO EMPLOYMENT RIGHTS

If the UK finds itself free from membership of the EU on June 23rd, it would appear that the Government are at liberty to repeal the employment rights currently conferred upon the UK by the institution; health and safety in the workplace, employee rights on the transfer of a business, working time regulation and discrimination rights are but a few of the matters vulnerable to amendment. 

Despite the uncertainty surrounding a Brexit vote, the implications for employment law are likely to be minimal. Although any conclusions on the nature of the relationship between the EU and the UK remain purely speculative in the event of a Brexit, suffice to say that any change is not going to come overnight. In any case, the UK must inform the European Council on its intention to leave the EU which will trigger a two-year period for withdrawal negotiations to take place – the actual withdrawal and technicalities will take even longer; it is broadly expected that during this period the ‘status quo’ will be maintained so employers and employees can take comfort from the fact that any substantial changes will take time to be implemented.

It is also likely that in the event of a Brexit, the UK will want to maintain some sort of relationship with the EU and it is often suggested that at a minimum, this will include a free trade agreement for the free movement of goods between the UK and the EU; such agreements give a way for the EU to negotiate requirements and this may mean retaining employment law in its current form. Furthermore, employment law rights in the EU are said to have underpinned characteristics of "fundamental rights" rather than properties of "procedural rules" meaning that any reform to employment law post-Brexit is likely to be politically unattractive.

There are many employment related issues which are not subject to EU legislation. These include national minimum wage, matters of unfair dismissal and unlawful deductions of pay; such matters would not be subject to change in the event of a Brexit. In addition to this, the UK has sometimes chosen to go beyond the scope of EU legislation – for example, by expanding minimum paid holiday entitlement and the extension of the TUPE Regulations. These provisions are unlikely to change just because of a Brexit.

What could reform look like?

If the UK leaves the EU and decides to reform employment law, the likely approach would be to create a more business-friendly legislative environment by simplifying current provisions. It is likely that this will be piecemeal in nature and will wholly depend on the UK’s relationship with the EU. Some changes could include:

Agency Workers: the Agency Workers Directive conferred rights to agency workers that were largely reflective of the rights enjoyed by permanent workers. This has been particularly unpopular among British businesses and employers and given their complex nature, it has been speculated that this area of employment law would be the first to be reformed in the event of a Brexit.

Working Time/Annual Leave: The Working Time Directive restricts the working week to a maximum of 48 hours and also includes provisions such as paid holiday entitlements and minimum rest periods. Even though workers in the UK receive a more generous minimum paid holiday entitlement than required by EU law, recent rulings from the European Court of Justice have complicated the law in this area by allowing staff the right to accrue carry forward holiday while off sick. Holiday pay must also be calculated on all aspects of remuneration which includes commission and some forms of over time. Leaving the EU provides the perfect opportunity for the government to clarify the law in this area and perhaps grant further discretion to employers by returning to limiting holiday entitlement to basic pay.

Let’s see what we wake up to come Friday!

Guest Blog by

Hollie Kinnaird

For MBM Commercial LLP

www.mbmcommercial.co.uk 

Entrepreneurial Lawyers for Entrepreneurial Businesses: corporate / corporate finance / intellectual property / commercial contracts / commercial property / dispute resolution / employment & hr