During the negotiating period, EU laws will still apply to and in the UK, and there may also be no, or very limited, employment law changes after the UK leaves the EU. Therefore, for the most part, we consider that no immediate changes will need to be made to employment laws and practices, and employers may wish to wait until there is further clarity on the UK’s future relationship with the EU before implementing any changes. However, there may be matters that employers are currently facing where practical steps can be taken now to minimise the potential Brexit effect:
EWCs: If you are currently setting up a Special Negotiating Body and considering establishing an European Works Council (“EWC”) governed by UK law, you should consider the possibility that EWCs may no longer be mandatory in the UK, or an EWC agreement governed by UK law may no longer be compliant with the EWC Directive, when the UK leaves the EU;
Holiday Pay: It is not clear to what extent UK courts should or will follow European judgments, past and future, after the UK leaves the EU. Given that EU laws will apply during the negotiating period, and it is uncertain whether any changes will be made following the end of that period, employers facing immediate pressure to implement changes to how they calculate holiday pay may decide to continue with those changes, but reserve the right to review and/or make changes in the future to protect their position. Other employers may want to adopt a “wait and see” approach before implementing any changes;
Long-term commercial / outsourcing agreements: The long-term nature of outsourcing agreements will often mean that the exit provisions are not triggered for some time, and potentially at a time in the future when the UK has left the EU. Whilst there is no indication that the UK Government is intending to repeal and/or make changes to the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”), Brexit increases the possibility for reform. Companies entering into, or re-negotiating outsourcing agreements, may therefore wish to build provisions into the agreement to cater for any future changes.