How Brexit may affect Employment Law

It would be remiss of us to not comment on the referendum decision. The difficulty for employers however is that until we know more, the legal implications for employment law are unclear. There are some initial steps employers should be thinking about which we have set out below, along with our view of how things might look in the longer term.

In the short term employers would be wise to remind staff of Dignity at Work and/or Diversity policies. The strength of feeling about the Brexit outcome has led to outbursts of racist comments and there is a risk that these may arise in the workplace.  Revisiting policies, reminding employees of what behaviours are expected and acting quickly on any confrontation is key.  Similarly, race should not influence recruitment or promotion decisions.

Those employers who employ non-British nationals in the UK, or have employees based abroad, face uncertainty.  It is likely to be some time before we know what arrangements will be in place and the movement of people will clearly be a contentious issue.  Existing EEA nationals will not have to leave the country or stop working for you immediately and your current practices for recruiting EEA nationals will not need to change yet. Whilst employers will have time to act upon what is eventually decided, businesses and sectors which rely heavily on labour from the EEA will need to start planning.

Leaving the EU will have an impact on data protection laws.  It will likely take the UK out of the area regarded as safe by the rest of Europe for processing employee data. Forthcoming data protection legislation was due to take effect in May 2018.  The UK will need to be committed to some sort of data protection compliance to access trade but quite how that will look is unclear.

During the negotiation period existing laws are unlikely to change however forthcoming legislation may be impacted, as there will be reduced parliamentary time to address domestic employment law. Some commentators have speculated that this may lead to the new laws on gender pay reporting being delayed, due to be in force in October 2016.

In the longer term there are suggestions that UK employment law which is derived from EU directives may be repealed.  In reality it is likely that EU law will continue to exert a significant influence on UK employment law for some time and it is unlikely that any government will repeal laws that have promoted equality and diversity. Those laws which may be reviewed include:-

• Aspects of the Working Time Regulations 1998 – the 48 hour working week limit has always been unpopular in the UK. It is possible that holiday rights for workers on long-term sick leave and the inclusion of commission and overtime payments in holiday pay will also be clarified;

• The Agency Workers Regulations have always been unpopular and are ripe for review;

• TUPE is unlikely to be repealed but it has been suggested that changes could be made, for example relaxing the restrictions on post transfer harmonisation of terms;

• Collective redundancy consultation is unlikely to be removed but there is scope for the consultation periods to be reduced, thresholds increased and sanctions for non-compliance to be reduced.

Much will depend on the kind of ongoing relationship the UK has with the EU, but any deal which sees the UK remaining in the single market or which involves a free trade agreement with the EU is likely to require continued adherence to fundamental EU employment rights.

These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.