On June 23,
2016, the UK voted in a referendum to leave the European Union (EU). Prime
Minister David Cameron resigned the next day, and Theresa May took office on
July 13, 2016. While the process for withdrawal from the EU is set out in
Article 50 of the Lisbon Treaty, P.M. May has said that she will not begin the
withdrawal process before the end of 2016. Needless to say, there is a long way
to go. Indeed, some experts anticipate that the process could take ten years to
complete.
What will the
implications be for employment law in the UK? Much will depend on the future
relationship between the UK and the EU. P.M. May's Brexit Secretary, David
Davis, has said his ideal outcome would be tariff-free access to the single
market. While observers wait to see the details of the UK’s negotiating
position, it is safe to say that the UK’s relationship with Europe will depend
on the UK maintaining some level of compliance with the EU regime, which may
well include employment law, as well as the handling/treatment of data
security, trade secrets and confidential information.
In the meantime,
it will for the most part be business as usual, and our message to employers is
not to panic.
Much of EU
employment law is firmly embedded in the UK's national consciousness. Indeed,
the UK has often been ahead of the EU in terms of employment law (for example,
in the right to paid holidays and paid maternity leave). There is no reason to
believe that businesses are champing at the bit to scale back workers' rights,
nor do we expect to see root-and-branch rewriting of legislation. Put another
way, nobody believes that the government will attempt to revoke the Equality
Act so that employers are free to discriminate against someone because of being
pregnant or gay.
The UK’s
departure from the EU will, however, give the UK more control over its
employment legislation and open the way to a more flexible and less regulated
regime. For example, the government may scrap certain pieces of EU-derived
employment legislation that never sat well with or became properly embedded in
UK law, such as:
- limits
on working time and weekly maximum limits on working hours;
- certain
complex and technical aspects of statutory holiday rights (including the
European requirement that workers on sick leave and maternity leave
continue to accrue holiday) and in relation to on-call time and
compensatory rest time;
- the Agency Workers Regulations;
- certain
aspects of the Transfer of Undertakings Regulations; and
- certain
provisions relating to collective consultation requirements, and
obligations in respect of works councils and information and consultation
bodies.
Another hot
topic for employers is how the right of free movement of workers between the UK
and remaining EU member states will be affected. This of course could have
consequences on the ability of employers to manage a skilled and experienced
cross-border workforce. Again, this very much depends on what the relationship
between the UK and the EU looks like after Brexit, and, in particular, whether
the UK retains access to the single market, one of the considerations that
makes Britain attractive to U.S. employers.
If the process
so far has taught us anything, it is that predictions are dangerous, and that
employers will have to wait and see.
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