An in-out referendum on EU membership is to take place by December 2017; possibly as early as summer 2016. What could this mean for employment law?

If the UK votes to withdraw from the EU…

Whilst the UK government could contemplate departing from current EU requirements, for example on agency workers’ rights; holiday entitlement; working time; TUPE; collective redundancy consultation and discrimination law, any changes may not necessarily be immediate or far-reaching.  Here are seven reasons why:

  1. There would most likely be a period of at least 2 years from the referendum until an exit date.
  2. It is almost inevitable that the UK would seek to enter into an alternative trade arrangement with the EU. Some of the options would involve accepting some, or even all, EU employment legislation.
  3. Much of EU employment law has been brought into effect here via UK legislation, which would remain in force post-Brexit unless and until amended. Changes to primary legislation would of course require Parliamentary time and approval.
  4. The Government would need to consider whether reform would in fact be politically desirable: the UK electorate has come to expect a certain level of workplace protection, and wholesale changes to the likes of, for example, discrimination law, seem highly unlikely.
  5. Many employment rights, including unfair dismissal and the minimum wage, don’t in fact stem from the EU. In other cases, the UK deliberately provides protection which exceeds the EU minimum: prime examples being maternity and shared parental leave, and the right to 5.6 weeks’ holiday (as opposed to the EU 4-week minimum). Withdrawal from the EU would be unlikely to prompt a change to Government policy in these areas.
  6. Whilst courts and tribunals would no longer need to make preliminary references to the European Court of Justice, and would not be obliged to follow new decisions from that court, it is less clear how they would deal with existing UK case law stemming from EU decisions. High profile examples include sickness absence and holidays; and the inclusion of certain payments in holiday pay. It is likely that tribunals would continue to apply the previous decisions of a higher UK court unless or until that higher court or Parliament decided to take a different approach.
  7. Employers’ internal policies and even contracts of employment often reflect certain EU rights relating to, for example, working time, sickness absence and equal opportunities. Reducing entitlements could be difficult both from a legal and employee relations perspective.

If the UK votes to stay in the EU…

The Prime Minister is seeking to ‘renegotiate’ the terms of the UK’s EU membership, including ‘cutting back on unnecessary EU regulation’. Previous media reports suggested that this might include a UK opt-out from social and employment legislation. Even if this was to be the case, for many of the reasons explained above, it is unlikely that any changes would be as immediate or radical as some might expect.