Following the recent announcement made by David Cameron that agreement had been reached on the EU reforms he was seeking, he confirmed (as many had already suspected) that the UK referendum on EU membership will take place on Thursday 23 June 2016.
No doubt we will all hear a great deal in the coming months about the advantages and disadvantages for the country in staying in or leaving the EU, but one of the key areas we and our clients are particularly interested in is what the implications would be for employment law if the UK were to leave – i.e. the so-called ‘Brexit’ scenario.
Some people have claimed that leaving the EU would drastically change the employment law landscape in the UK by removing many of the laws we currently have in place. Whether you think that is a good thing or not, and whichever side of the debate you are on, it is important to try to get to grips with what the practical implications could be.
It is not unusual to hear the EU being blamed for some of the laws that employers consider most burdensome, and it is true that some of the unpopular, complex rights do originate from the EU (TUPE being a good example!). However, in our experience, people are often unaware of how much of our employment law is actually self-generated rather than EU-imposed.
For example, in the case of discrimination laws, although we are required by EU law to have anti-discrimination legislation, UK law already dealt with many of the requirements before EU law made it mandatory. As just one example, the Race Relations Act 1976 (now replaced by the Equality Act 2010) came long before the EU Racial Equality Directive in 2000. On that basis, leaving the EU seems highly unlikely to result in these rights being removed.
Even for rights that have stemmed from EU law, such as the right to paid holiday (which comes from the Working Time Directive), it seems unlikely that the Government would seek to abandon these altogether if the UK were to leave the EU, given how unpopular such a move would be. There may be some areas where the UK Government would seek to redo certain provisions to make them more palatable to UK employers (perhaps in relation to the recent case law on holiday pay, or to remove the 48 hour maximum average on a working week), but I would be surprised if there were fundamental changes.
As far as TUPE is concerned, although strictly speaking the TUPE Regulations would fall away if we leave the EU, it doesn’t seem likely that the UK Government would scrap protection for employees in situations such as business sales or outsourcing. I suspect that they would come up with new legislation containing some of the essential elements of TUPE but without some of the problem areas. The fact that terms cannot easily be harmonised after a transfer has long been a headache for UK employers, so this could be an area targeted for change.
Family-friendly laws are one area where the EU is often thought to be the source of rights which some people perceive as excessive. However, although some family-friendly rights do originate in EU law, most of the UK rights actually go further than the EU requires, and some, such as flexible working, are solely of UK origin. On that basis, there would be no reason to remove these rights if the UK were no longer in the EU.
Of course even in a Brexit situation, we would still need to be able to trade with the EU. This would mean that undoubtedly the EU would still have significant influence on the UK, which could potentially include a requirement to maintain a certain level of employment rights (as is the case with countries like Norway).
From a legal perspective, if we were to leave the EU then the UK would no longer be required to be bound by the decisions of the European Court. However, it cannot be in the interests of any country for there to be legal uncertainty, so the general view among lawyers is that any cases already decided would probably be considered to be binding unless the law were specifically changed.
If the ‘Vote Leave’ campaign succeeds and the public vote on 23 June to end our membership of the EU, the UK would not leave the EU immediately. There would be a two year notice period, and it would of course take time to disentangle all of the various aspects of the relationship. Of course, no one can be sure of what exactly could happen, but based on what we know at the moment, it does not seem that there would be fundamental changes to most of our employment laws in the event of Brexit, at least not immediately.
If you would like to talk through a situation you are dealing with, or if you need advice on any aspect of employment law, please contact any member of the Pure Employment Law team (01243 836840 or [email protected]).