The UK vote to leave the EU will lead to considerable uncertainty in the long term from an employment law perspective, because key areas of employment law are derived from EU legislation and so might fall away automatically, be abolished or be amended. It seems very likely, however, that they will initially be adopted as continuing EU law (see above the section entitled Replacing EU law: the Great Repeal Bill). These areas include working time, agency workers, fixed-term employee and part-time worker protection, health and safety, acquired rights under TUPE (Transfer of Undertakings (Protection of Employment) Regulations 2006), collective redundancy consultation, works councils, discrimination and certain family-related rights.
Some employment legislation giving effect to EU rights predates or gold-plates the relevant EU Directive (eg some forms of discrimination, family rights, TUPE), making it particularly unlikely that these would be repealed. Indeed, the Prime Minister announced on 2 October 2016 that existing workers’ rights will be guaranteed during her premiership. This is confirmed in the White Paper which states that “the Great Repeal Bill will maintain the protections and standards that benefit workers” (in addition to setting out current or planned enhancements to workers’ rights independent of EU law).
Perhaps the most likely targets for abolition or amendment in the longer term would be the Working Time Regulations and the Agency Workers Regulations, which have both been heavily criticised as imposing unnecessary burdens on business. Amendments might also be made to TUPE to make it easier for employers to harmonise terms of employment, and the Government might also consider placing caps on compensation for discrimination claims.
Some of these rights will have been transposed into employment contracts and policies and therefore would continue to apply until varied.
Where legislation is retained, a key question will be whether courts would continue to follow decisions based on rulings of the CJEU (even if not required to) in those areas or be willing to re-examine and potentially overturn established doctrines. Much-litigated issues such as holiday pay could be re-opened, making the legal position unpredictable until suitable cases are decided by the UK courts.
Given the uncertainty over possible changes to employment law, there are some practical steps that employers should consider at this point:
- Multinationals who have set up European Works Councils under UK legislation (as their central management is based in the UK) will need to develop contingency plans.
- Employers contemplating restructuring in response to the UK exit should ensure they are up to speed on their information and consultation obligations – TUPE can apply in offshoring situations.
- The possible impact of Brexit on business and employment plans may be an issue that should be addressed where there are obligations to inform and consult with employee representatives eg in the context of a proposed TUPE transfer.
- It is prudent for employers to continue to prepare for compliance with the General Data Protection Regulation, given that this will be directly effective from 25 May 2018, before the two-year window for negotiation of withdrawal terms ends and therefore likely to be before the terms of a new relationship are agreed.