Title
BREXIT and the implications for employment law
Pub Date
30/06/2016
Category
Employment Law
Character
Number
Summary

Now that the UK has voted to leave the European Union by 52% to 48%, the government will, in due course, inform the European Council of its intention to leave the EU in accordance with Article 50 of the Treaty on European Union. This notification then triggers a two-year period for the negotiation of the terms of a member state's withdrawal. It seems that this will not happen before October 2016, when the current prime minister, David Cameron, says he will step down and leave it to his successor to invoke Article 50 and negotiate the UK’s withdrawal terms. Unless an agreement is reached by all of the EU member states to extend the two-year period for negotiation, the UK will cease to be a member state of the EU at the end of that two-year period, even if withdrawal terms have still not been agreed.

As far as employment law is concerned, the position can be summarised as follows:

  • As long as the UK is still an EU member, it remains bound by EU treaties, directives, regulations and case law and therefore it is “business as usual” for employment law for now.
  • Once the UK has left the EU, which will not be for at least two years, the extent to which the UK government can then amend or repeal EU-derived employment legislation will depend on which trade model with the EU is eventually agreed and what its future relationship with the EU is going to consist of – that position will not start to become clear for some considerable time yet.
  • EU-derived employment laws include discrimination, certain family-friendly rights, working time, agency workers, collective redundancy consultation and acquired rights under TUPE.
  • If no agreement is reached on its future relationship with the EU, there will be no obligation for the UK to adopt or apply new EU directives and regulations once it has left the EU.
  • If, however, the UK instead joins the European Economic Area (EEA), it is likely to have to maintain most EU-derived employment legislation and implement new EU directives and regulations.
  • The extent to which any EU-derived legislation can be amended or repealed will therefore be dependent on what is achievable in the context of whatever new relationship with the EU is negotiated.
  • In any event, EU employment law has been implemented into UK legislation, so the government would have to take a positive decision to amend or repeal its own legislation – this process will not happen automatically.
  • Brexit has no impact at all on entirely domestic legislation that has not come from the EU, such as the right to claim unfair dismissal and the national minimum wage.
  • It seems likely that, at least in the short to medium term, most of the statutory provisions will be retained and indeed some of them are unlikely to ever be repealed, such as substantive discrimination laws and family-friendly rights, particularly as many of the UK provisions in those areas either pre-date or gold-plate the relevant EU directives.
  • As far as EU case law is concerned, the UK would no longer remain bound by decisions of the Court of Justice of the European Union (CJEU) once it leaves the EU, but it remains to be seen whether the UK courts and tribunals will continue to regard those decisions as being of persuasive authority to the extent that the UK ends having to maintain the EU-derived employment legislation that they relate to. In addition, many of those decisions have been relied on by UK courts and tribunals in making their own decisions and the UK now has its own binding case law on many of the issues. So, the UK courts and tribunals would then need to take a decision on whether to follow existing UK case law or overturn it. There is also the possibility that new legislation could be passed by the UK government to reverse some of the earlier case law.
  • Even if some EU-derived employment laws are eventually amended or abolished, to the extent that employers have incorporated those provisions into employees’ employment contracts, they would remain contractual entitlements and so would still be valid, unless and until the employer can vary them, which will normally require employee agreement.