Employers may not be aware that much of the current legislation in place to protect employee rights actually derives from the European Union – for example, working time regulations, rights of the employees on a business transfer (TUPE) and family leave rights to name but a few. Indeed some Politicians for the ‘Leave Campaign’ will no doubt have argued that such laws were inhibitive to British businesses and produced too many rules and regulations having a negative effect on both time and profits.
What is likely to happen?
In reality it is doubtful that the UK Government would look to repeal any employment law which implements minimum EU requirements, the reason being that many of these laws simply complement existing UK law (equal pay rights for example). In addition, much of our existing employment law simply reflects good/acceptable practice in business (or indeed life generally!) such as the right not to be discriminated against on the grounds of sex, age, disability etc. Furthermore some UK Laws actually go above and beyond the minimum requirements of EU legislation – in respect of holidays for example, the EU Working Time Directive 2003/88/EC only requires EU Member States to provide for a minimum of 20 days’ annual leave for employees, whilst the UK statutory minimum leave entitlement is actually 28 days inclusive of normal bank and public holidays.
As a final point it is worth noting that despite a (potential) Brexit, the UK will still need to maintain strong trading relations with Europe. If the UK is a member of the EEA (European Economic Area) it would be required to remain subject to many aspects of EU employment law.
In light of the above, whilst in my view the majority of employment law legislation will not be repealed or significantly changed, the UK Government may look to alter some employment law that UK businesses have struggled with. The following are areas that may be most susceptible to change:
1. Agency Workers
The aim of the introduction of the Agency Worker Regulations 2010 was that such workers would have the same rights to working and employment conditions as full employees, after 12 weeks of employment. A lot of businesses have struggled with these rules as in most circumstances they only require such workers to fill a temporary gap, and will have the ultimate aim of recruiting a different, full time, permanent employee.
The current Transfer of Undertakings Regulations only allow incoming employers to make changes to the employee’s contract/terms and conditions of employment, if the changes are either not connected to the transfer or if the changes are connected to the transfer but are for an economic, technical or organisational (ETO) reason requiring changes in the workforce. The first instinct of most employers following a transfer of undertakings is to try and harmonise terms and conditions in order to avoid employee conflict and indeed help the business to run as smoothly as possible, however, trying to meet the ‘ETO test’ is often difficult and employers are wary of implementing any changes for a length of time following the transfer date.
The UK Government may well therefore look to make some amendments to this legislation in order to make it more ‘user friendly’ for businesses and to encourage businesses to continue to buy and sell as a booster to the economy.
3. Annual leave and sickness
Despite my earlier point that UK workers actually receive a higher holiday entitlement than that required by EU law, some decisions of the Court of Justice of the European Union have not been popular with UK businesses to say the least. One example is the right for annual leave to continue to accrue whilst an employee is absent on grounds of long term sickness and another is the decision that holiday pay rates should include all remuneration to include commission and some forms of overtime pay rather than basic pay alone. UK businesses have been left frustrated and confused, both by the decision itself and the impact this would have on their profitability, but also with how they should calculate these rates and how far back they would need to go in doing so. Once again Brexit could permit the Government to alter these laws or at least clarify some important questions.
In summary, everybody in Britain is currently unsure and apprehensive about the impact of Brexit on all areas of our life, however in my view the changes to UK businesses from an employment law perspective are likely to be minimal based upon the theories above. Watch this space for further updates!