The Brexit Effect; how employment legislation will be affected by the UK’s new independence

More than six months have passed since the historic Brexit vote and the subject has remained ever present on the news agenda. Recent events have now revealed a date to look towards as PM Theresa May has announced she will trigger article 50 by the end of March 2017, which means the UK will be non EU members by the middle of 2019.

Here, Richard Thomas, Employment Law specialist and Partner at Cardiff and London based law firm, Capital Law, looks at the potential legal implications the UK could face during the withdrawal process of Brexit, focusing on the potential repercussions on employment law.

Ever since the result of the much anticipated vote was announced, lawyers and civilians were cautious of the legalities that would be involved in the process of leaving the EU. This is predominantly because the Brexit camp never put forward any clear blueprint or model as to how the UK would govern its legal and trading relations once out of Europe.

This was in stark contrast to 2014’s Scottish Independence Referendum when the then Scottish Government published a prospective detailing how an independent Scotland would exist and function.

Theresa May’s decision to invoke Article 5O will serve irrecoverable notice of Britain’s decision to leave the EU. This will then trigger the two year negotiation period in which to conclude a withdrawal agreement.  We’re repeatedly told that ‘Brexit means Brexit’, but ambiguity abounds about what the term actually means in real terms.

The legal implications of such a withdrawal for the UK’s current laws are considerable. For example, the treaties, directives and regulations (and rulings of the European Court of Justice) will cease to apply in the UK unless their affect is specifically preserved by UK national law. Furthermore, the EU Court will no longer have jurisdiction over the UK and UK citizens will no longer have the rights of EU citizens.

What is clear is that there will be significant practical difficulties associated with the need to disentangle EU derived requirements from non-EU derived requirements, especially where case law has, for over 20 years, drawn on the UK Courts interpretation of EU directives and ECJ rulings.

In the employment law field, a significant amount of UK legislation and case law developments have stemmed from the EU and this has strengthened workers individual rights in areas such as working time and annual holidays. Other benefits that have arisen from our EU membership include family friendly policies, anti-discrimination legislation, and employment protection in the event of a change of employer.

Worker collective rights have also been strengthened by EU directives in the areas of collective redundancies, TUPE, European works councils and information and consultation obligations.

Redundancy consultation is a valuable piece of employment protection which could very well be watered down when we leave the EU. The current laws stem from an EU directive and state that collective consultation is required when over 20 people are affected. I suspect that this number will change after our withdrawal and will more likely increase to a minimum of 100 employees that need to be under consultation, although I doubt this will be a legislative priority in the immediate aftermath.

Most of the Working Time Regulations will remain. Paid holiday will certainly stay, and of course the UK gold-plated the European four weeks paid annual leave in the UK.

We also suspect that a ‘week’s pay’, which currently includes commission and overtime following ECJ rulings, will be pared back to what it was a few years ago, with just basic salary being paid as holiday pay.

Possibly the most talked about issue relating to employment is the future of British nationals living and working in other EU countries and vice versa. Previously, Liam Fox, the Secretary of State for International Trade, said that the future of British nationals in Europe is ‘one of our main cards’ in the ongoing Brexit negotiations. He said that no guarantee would be given to the two million EU nationals living in the UK until more information about the fate of British citizens living in Europe has been revealed.

Following Brexit, EU nationals would no longer have the automatic right to continue to work in the UK. It seems likely that the UK Government will agree with the EU a position whereby existing EU migrants can stay (at least for an agreed period) in return for permission for UK citizens working in the EU to remain where they are. It is also likely that the UK will introduce an immigration system similar to the current system for non-EU citizens, whereby skilled workers and students can gain permission to stay for a limited period. Undoubtedly, this could have an impact on some UK businesses if significant restrictions are imposed on their ability to recruit labour from the EU.

While the Brexit effect has already been felt across a number of industries, this is a fraction of what the implications will be when we formally leave the EU. Employment law will certainly be affected not only in the areas touched upon here but also within discrimination cases and data protection, which will both be reviewed upon our withdrawal.

Companies and employers should keep an eye on the news agenda to assess any further impact Brexit could have on recruitment, employment and immigration in order to stay ahead and safeguard their current employees before the legislation changes.

Richard Thomas

Richard Thomas

Partner at Capital Law LLP

Email: r.thomas@capitallaw.co.uk
Tel: +44 (0) 29 2047 4436

Richard graduated from London School of Economics before returning to his home town of Cardiff to commence his legal career.

Richard has a particular interest in the health sector; he worked as an “in house” lawyer for NHS Wales for a number of years, advising them on a variety of employment law issues.

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About Richard Thomas

Email: r.thomas@capitallaw.co.uk
Tel: +44 (0) 29 2047 4436

Richard graduated from London School of Economics before returning to his home town of Cardiff to commence his legal career.

Richard has a particular interest in the health sector; he worked as an “in house” lawyer for NHS Wales for a number of years, advising them on a variety of employment law issues.