Five months on since the EU referendum and the majority vote in favour of exiting the European Union, what do we know about the implications for UK employers? Are things any clearer yet?
In short, not much clearer. Constitutional lawyers are continuing to do battle over whether the Government is entitled to give notice to leave the EU under Article 50 of the Lisbon Treaty without reference to Parliament. On 3 November 2016, the High Court held that the Government did not have power under the Royal prerogative to give notice under Article 50 (R(Miller) v Secretary of State for Exiting the European Union). The case is now due to be heard by the Supreme Court on 5-8 December 2016, although we are not expecting a decision to be handed down until the New Year.
In the meantime, we do at least have an indication of the Government’s intentions in relation to existing employment legislation once the UK has formally exited the EU.
The Great Repeal Bill
At the Conservative Party conference on 2 October 2016, Theresa May announced her intention to trigger Article 50 before the end of March 2017. Whether this timetable is still realistic will depend at least in part on the outcome of the appeal to the Supreme Court of the Miller judicial review application.
The Prime Minister also announced that the next Queen’s Speech (due in May 2017), setting out legislative proposals for the year ahead, will include a Great Repeal Bill. This Bill is intended to take effect on the date the UK actually leaves the EU, which is likely to be by March 2019 assuming that the Government’s proposed timetable stays on track.
The Bill will repeal the European Communities Act 1972, which currently enshrines the supremacy of EU law in national law. At the same time, it is intended to convert all existing EU-derived law into UK law, with the intention of providing a “calm and orderly exit" and giving "as much certainty as possible to employers, investors, consumers and workers” (David Davis, Secretary of State for Exiting to European Union). It is also likely to give statutory effect to pre-existing ECJ case law post-Brexit.
It has already been reported (The Times, 22 November 2016) that Government lawyers working on the Great Repeal Bill are struggling with the complexity of the task, due to the enormous body of legislation that has been introduced in over 40 years of membership of the EU. The complexities are explained in a briefing paper on the Great Repeal Bill published by the House of Commons library.
Once the Great Repeal Bill is enacted, it will then be up to the Government and Parliament to decide which, if any, EU-derived legislation should be repealed or amended. Theresa May's conference speech sought to allay fears by announcing that “existing workers' legal rights will continue to be guaranteed in law, and they will be guaranteed as long as I am Prime Minister”.
So it appears that there will be no immediate change to employment law at the point the UK formally exits the EU. The Government’s intention is for the existing body of EU-derived employment legislation to remain in place until there is political appetite to effect change. What we don’t yet know is what will be the impact of any future decisions of the ECJ on UK law or any amendments made to EU legislation post-Brexit.
Recruitment and retention
Of more immediate concern to many employers will be the implications for the recruitment and the continued employment of EU-nationals post-Brexit. On this we still have no clarity from the Government, although Teresa May has indicated that she ‘expects’ to allow EU nationals already living in the UK to be allowed stay. See our previous briefing for more information. Employers are already reporting some difficulties in recruitment, with potential EU candidates apparently being discouraged by the uncertainty over their future status.
The House of Commons Library recently published a short briefing paper on the implications for employment law arising from Brexit. The paper explains how EU law is implemented in the UK and the role of ECJ case law, and how this will apply in the future. The paper also includes a table summarising EU-derived employment law rights and their EU and UK legislative sources.
We will keep you updated with any further developments.