What Will Brexit Mean For UK Businesses

What Will Brexit Mean For UK Businesses

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It’s been over a week since the UK voted to leave the European Union.  What does this mean for UK businesses?  It is very hard to tell at this stage but we can start to guess at how an exit from the European Union might impact on Employment legislation.

One of the burning questions in the workplace is, what will happen to the significant body of employment law that derives from Brussels? Over the past decades, EU directives have affected workers’ rights across the economy. For individual rights, employment protection legislation ranges from working time and annual holidays, rights for women and family-friendly policies, to anti-discrimination legislation and ‘atypical’ workers.

Collective rights can be grouped under the core areas of collective redundancies and Transfer of Undertakings (Protection of Employment) Regulations [TUPE], European Works Councils and information and consultation.

Will a renegotiation of the UK’s relationship with the EU spell far-reaching changes for the employment relationship and many of the laws that govern it? Many HR professionals are wondering how the workplace will be affected when (or if) Article 50 is triggered and the UK Government embarks on negotiations to structure a new relationship with the EU. Following the ‘leave’ vote, in theory the field could be open for a government to amend employment law if it could gain parliamentary approval. However, in reality the legal framework under which EU-derived employment law is transposed into UK law is complex and will not be straightforward to dismantle, even if there is the political will to do so. Also, nothing will change in the short-term.

What does this really mean for our country as a nation? What are your views about Brexit?

What does this really mean for our country as a nation? What are your views about Brexit?

A complex picture

Typically, European law is initiated in Brussels through directives and, once agreed, transposed into national legislation across all of the Member States. EU-derived law has been incorporated into UK law using a range of legal approaches including secondary legislation under the European Communities Act 1972, such as TUPE, as well as through standalone acts of Parliament, such as the Equality Act 2010.

The Working Time Directive is one of the most high-profile elements of EU-derived law affecting employment.  Before it was transposed into UK law, UK workers did not have a statutory right to paid annual holiday. The Directive ensured that all workers should be entitled to at least 20 days’ paid annual holiday but the UK Government increased this entitlement to 28 days, including bank holidays. This is a perfect example of how the UK Government has chosen to ‘gold-plate’ some aspects of EU law, providing more generous provision for UK workers.

Further, one of the other main provisions of the Working Time Directive – that a worker’s working week would be limited to 48 hours – is already subject to an opt out in the UK. This Directive alone illustrates the complexity of how the UK transposes different aspects of EU law and how the wider domestic context influences its interpretation. For instance, successive governments have promoted family-friendly provision in workplaces and it’s hard to imagine a policy shift that aims to undermine this direction of travel in relation to EU-derived regulation.

A leap into the unknown

Any analysis of what the future holds for EU-derived employment law is based on speculation, and reliable commentary will have to wait until we see what appears on the negotiating table. Ultimately, any changes to workplace rights will depend on the shape of the political and economic relationship that the UK negotiates with the EU. However, trade agreements that would allow the UK continued access to the single market or joining the European Economic Area, like Norway, could require the UK to still accept the majority of EU regulations. Further, there will be legal and practical challenges associated with any attempt to unravel EU-derived requirements from non-EU-derived requirements, especially where case law has drawn on domestic courts’ interpretation of EU Directives and on European Court of Justice (ECJ) rulings.

Perhaps less will change than imagined

Analysis by legal experts before the ‘Brexit’ vote concludes that very little would change: EU-derived law is so embedded in UK law that it would be very complex to unpick, and would typically require new legislation.

Overall, with the major caveat that what happens to EU law depends on the future negotiating agenda, there is more likely to be a tinkering with specific areas which have been less popular with UK employers, such as the Agency Workers Regulations, the cap on discrimination payments, collective redundancy consultations and aspects of the Working Time Directive. Only time will tell what the impact will be of a Brexit.

Nick Cooper
Nick is NCC's resident blog author and covers a range of subjects, including teaching and health & social care. NCC is an international learning provider with over 20 years’ experience offering learning solutions. To date, NCC has engaged with over 20,000 employers, and delivered quality training to over half a million learners.
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