What would a Brexit mean for employment law?

by Nathan Combes, a senior associate at the York office of Lupton Fawcett Denison Till.

As we move ever nearer to the referendum vote on whether or not the UK should remain a part of the EC, a number of organisations and businesses are beginning to ask what the employment law implications of “Brexit” would be.

This is an important question because a significant proportion of the UK’s employment law is derived from the EU. If Brexit were to happen, then Parliament would in theory be able to repeal much of that legislation, and the UK Courts and Tribunals would no longer have to defer to the European Court of Justice in cases involving EU law.

Brexit would allow Parliament to revisit the statute books, and over time that could mean that some of the most unpopular elements of EU based employment law legislation could be amended or in some cases be repealed altogether. For example, a post-EU Government could choose to:

• abandon the 48 hour working week;
• reduce or do away with the collective redundancy consultation requirements;
• introduce changes that would make it easier for employers to harmonise individual terms and conditions of employment following the acquisition of an existing business; and
• impose an upper limit on the amount that could be awarded to claimants in discrimination claims.

Other pro-employer changes would also be possible in the areas of holiday pay entitlements and the rights afforded to agency workers.

It is important though to remember that protections for workers and employment rights existed long before the UK’s entry to the EU in 1973, and there is no reason to suspect that some of the key protections for UK workers (e.g. the right not to be unfairly dismissed and the right not to be discriminated against) would alter significantly in the event of an exit.

In addition, a significant proportion of the UK’s existing employment rights (including the National Minimum Wage, the right to request flexible working and shared parental leave) are the result of purely domestic legislation and have nothing to do with the UK’s membership of the EU. It’s true also to say that in some cases (notably in relation to annual leave entitlements, maternity leave and pay), the rights afforded to UK workers go further than the UK’s membership of the EU requires.

Another important factor that cannot be overlooked relates to the fact that a key priority for the UK Government in the event of the UK leaving the EU would be the negotiation of a free trade agreement. After all, an exit would not alter the fact that Europe would easily remain the UK’s biggest export market. It is entirely conceivable that the EU would make the UK’s continuing acceptance of its social and employment regulations a key requirement in any such deal.

A vote for Brexit on 23 June would certainly pave the way for legislative changes; however it seems that a wholescale reformulation of existing UK employment law would be extremely unlikely.