With the referendum on the UK’s EU membership only days away, there has been much discussion of the effect a “Brexit” could have in numerous areas. Here, we look at the possible implications leaving the EU could have for employment law.
A significant amount of UK employment law comes from the EU, including discrimination laws, laws on the transfer of undertakings (TUPE), rights to family leave and the Working Time Regulations, which provide for holidays and rest breaks. Theoretically, following a UK exit from the EU, the UK government could repeal all of this. However, it seems unlikely that it would actually do so, given the complexity, the significant uncertainty and possible costs it would entail for businesses and the political outcry regarding the removal of rights which have become accepted as fundamental in the employment relationship.
Obviously, there is a certain degree of speculation about what a post EU government may choose to do. However, it is more likely that existing EU laws would remain in place, possibly with some changes to those which are particularly disliked by the government, with any more significant change taking place over a period of time.
While laws may be changed in the future, the past decisions of the European Court of Justice (ECJ) have developed the law in the UK and remain binding on the UK courts until they are overruled by a UK judge or changed by legislation. In any event, we may remain under the jurisdiction of the ECJ depending on the agreement which is reached in respect of trade with the EU. For example, Norway is a member of the European Economic Area (EEA) and the European Free Trade Association (EFTA), a condition of which is that the decisions of the ECJ are binding upon it. If a similar model was to be adopted here, it would make it unlikely that we would be able to disregard ECJ decisions.
Similarly, there is uncertainty regarding the position on free movement of people and workers should we vote to exit the EU. Workers from the EU would no longer have an automatic right to remain in the UK, just as UK workers living and working in the rest of the EU would no longer have the right to stay where they are. It is likely that an agreement will be reached whereby people already residing in a county will be able to remain there, at least for a certain period of time. However, there could be implications for UK businesses, particularly those who trade or have offices across the EU. Lack of free movement could impact the labour supply and flexible recruitment processes. Skilled and talented workers who would otherwise have come to the UK may be put off if there are visa requirements and may choose to stay within the EU instead, thereby resulting in loss of such skilled labour in the UK .
On the other hand, if we wished to retain access to the single market then we may have to seek to be party to the EEA, either by joining the EFTA or reaching a specific agreement. Members of the EEA are required to adopt EU legislation concerning the single market and provide for free movement of people goods and services. Therefore, in reaching an agreement on trade, we may be required to accept free movement of people as a condition, as well as to accept EU employment law, as is the position in Norway and Switzerland. In this situation, employment law would remain largely the same, with the difference being that we have no say in its development.
If we vote to leave the EU, there will be numerous uncertainties, with the future of employment law in the UK being one of them. While it seems unlikely there would be wholesale changes to existing EU laws, at least in the short term, the position going forward is likely to depend on agreements reached with the EU and whether we wish to remain part of the single market and the potential wider discretion which any UK government may have to legislate within the terms of any agreement reached with the EU.
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