Whilst the 23rd June was a historic day for the UK with a vote to leave the European Union, for employers it will still be business as usual for a while. As a result of David Cameron’s resignation, and his statement that he will not trigger the necessary Article 50 of the Lisbon Treaty before he steps down in three months’ time, it will now fall to the next prime minister to trigger these leaving provisions to begin our exit from the EU. Once this has been done there will be up to a two year period of negotiation with the EU to agree the conditions of the UK’s withdrawal; during this period of time the UK will remain a member of the EU and the status quo in respect of the free movement of workers and EU derived law will remain.
Although there has been a great deal of speculation around the ultimate destiny of EU derived employment law it is likely that the government will take a measured approach and, if there is a political appetite on certain issues, deal with certain laws on a case by case basis – either to repeal or amend them in line with the perceived needs of British business.
So what could that mean in practice?
Discrimination and family friendly rules
Equality is a key thread running through EU law which has resulted in the UK being obliged to incorporate new protected characteristics into UK law – arguably before there was a widespread appetite across the country for this. Protection on grounds of age, sexual orientation, and religion and belief (for example) are now firmly incorporated into the Equality Act 2010 and arrangements relating to maternity and shared parental leave etc. built into other domestic legislation. It is unlikely that the Equality Act or swathes of the Employment Act 1996 will be repealed, or that there is any real likelihood of a significant reversal in these areas. Social attitudes have moved on significantly and most employers now recognise the enormous value in family friendly and equality policies. Very few politicians openly advocate the slimming down of anti-discrimination protection or family friendly rules. The one area where change could be more likely is that there may be an appetite for measures to be reintroduced to allow exemptions for micro-employers for whom there is arguably a high burden in adhering to family friendly laws.
It should be noted, however, that the trend in Europe is for the reach of equality to be extended further and it would be interesting to see if Britain keeps pace with any new developments following our exit.
Whilst many employers might welcome the thought of returning to the old situation prior to the Transfer of Undertakings (Protection of Employment) Regulations 2006 and its predecessor, where there was no assumption of a transfer of staff in a business transfer or an outsourcing arrangement, in reality, given that commercial agreements have now been based on this for many years, it is extremely unlikely that the government would seek to remove TUPE; it is more likely that the government will focus on easing the burden on employers by identifying small changes (for example harmonisation of terms post transfer).
Holidays and working time
The European Working Time Directive sets out minimum levels of holiday and maximum levels of working time, which in the UK was subsequently enshrined in the Working Time Regulations 1998. Whilst it is unlikely that we will see changes to annual leave, many employers would be keen to see the removal of the 48 hour maximum working week and the associated record keeping obligations. Given that companies are permitted to seek waivers from staff in this regard, this may not be something that is pursued, but it has been a consistently unpopular obligation with employers so the government may try to amend domestic legislation to allow British businesses more freedom.
Under the Agency Workers Regulations 2010, agency workers who gain 12 weeks’ continuous employment have the right to the same basic working and employment conditions as direct recruits of the hirer, including terms and conditions relating to pay, working time, rest periods/breaks and holiday. Still relatively new, and still consistently unpopular in the British business environment, this is a likely candidate for attack by the government seeking to reduce the legislative burden on British businesses and promote a flexible workforce.
Whilst the reality is that the vast majority of existing laws originating from Europe will remain unchanged for some years to come, we are still entering an inevitable period of uncertainty and employers should continue to keep a close watch on political developments. It is unclear at this stage whether the timetable for legislation already planned such as gender pay reporting and the extension of shared parental leave to grandparents will be affected by the changes in government. The future of new EU derived legislation such as the General Data Protection Regulation may also be affected depending on the timing of exit negotiations.
Regulations around the free movement of workers will also be high on the agenda for many employers. Depending on the exit terms negotiated in the next two years, EU workers may have to apply for a visa under UK immigration rules to work in the UK and vice versa for UK nationals working in EU countries.
It’s clear that employers will have many issues to consider and discuss over the coming months. We will continue to update you regularly via our blog area