The Family Business - Brexit: What now for UK employment law?


08 July 2016

The process of exiting the EU is unchartered territory for the Government to navigate and the impact on the economy is already being felt. However, as far as employment law is concerned it will be business as usual for the foreseeable future.

The Great British electorate has spoken and after months of uncertainty and divisive campaigning the UK’s future withdrawal from the European Union (EU) is now apparently confirmed. 

The exit process

The process of exiting the EU is unchartered territory for the Government to navigate and the impact on the economy is already being felt. However, as far as employment law is concerned it will be business as usual for the foreseeable future. 

Once the UK’s official notification of withdrawal has taken place, there will be a maximum two-year period for the UK and EU to negotiate an exit arrangement. In the meantime, we remain a member of the EU and all EU-derived legislation will remain in place and must be interpreted in accordance with the relevant EU Directive. Decisions of the European Court of Justice will still be binding on UK courts and tribunals, and the freedom of movement of workers within the EU will still apply.

What will happen post-exit?

After the exit process has completed, any EU-derived UK legislation will continue in effect unless and until it is expressly repealed or amended, following due parliamentary process. 

The extent to which employment law will change after that time is still a matter of speculation, and will depend on the political will to reform workers’ rights in what will, unless it’s called any sooner, be the lead up to the next General Election (due in 2020). It will also depend on the terms agreed for the UK exit and any new trade deals that are put in place. For this reason, we would suggest that a wholesale repeal of EU-derived legislation, including working time, TUPE, collective redundancy consultation, rights to family leave and protection from discrimination, is highly unlikely.

Likely reforms to employment law

Most commentators are suggesting that reform is more likely to amount to 'tinkering around the edges' of EU-derived employment law. Let's hope that this includes a clarification of the rules around sickness absence, overtime and holiday pay under the Working Time Regulations 1998, which has caused a few headaches for employers and employment lawyers alike over recent years. A further possible contender for reform are the Agency Workers Regulations 2010, which have been unpopular with employers and of little apparent interest to workers or the unions.

More immediately, businesses will need to consider the economic impact of the exit vote and whether any steps need to be taken now to reposition the business or to carry out any restructuring in view of the uncertain times ahead. Those who employ immigrant workers will also need to consider what steps it will be necessary to take to secure their workforce going forward. 

We will of course keep you up to date with any developments as they happen. Employment and immigration law have always been dynamic areas of law with frequent changes in legislation. The Birketts employment team is highly experienced in leading businesses through periods of change and can provide invaluable support as the employment law landscape continues to evolve.

The content of this article is for general information only. For further information regarding employment law and Brexit, please contact Liz Stevens or a member of Birketts' Employment Law team. Law covered as at July 2016.