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EU referendum (should we stay or should we go?) – Employment implications

EU referendum (should we stay or should we go?) – Employment implications

On Thursday, 23rd June 2016, the public will determine whether the United Kingdom remains in the European Union. A lot has been written and said by the ‘Brexit’ and ‘Bremain’ camps about the impact of that decision, most recently by the US President. However, casting political allegiances aside, what could be the implications on employment rights if the UK votes to leave?

Employment legislation

A number of key employment rights derive from EU legislation, in particular those relating to equal opportunities, holiday and working time. A departure from the EU could allow such legislation to be weakened or even repealed. However, would the government take such radical steps?
•Protections already in place in UK law: Some EU laws merely codify protections that already existed under UK law, for example, equal pay and discrimination protections. It seems unlikely that the government would simply remove these protections.
•Employer expectations: An influx of changes to UK employment law could result in confusion and uncertainty for employers, in addition to the significant costs arising from complying with the revised regulations.
•Worker expectations: UK workers have come to rely upon a number of rights that derive from EU law, such as protection against discrimination; family friendly rights; and regulations on working hours. It would be an unpopular move to significantly weaken these rights.
•Not afraid to take unpopular decisions: In recent times, we have seen the increase in the length of service requirements to obtain unfair dismissal protections as well as the introduction of Employment Tribunal fees, so anything is possible.

UK case law

If the UK does leave the EU, the UK courts would most likely become the primary decision makers in respect of employment law cases. It is unclear as to how legal precedents set by the European courts would now be determined. In the short-term at least, UK courts and tribunals would be likely to continue to consider European judgments as persuasive, but longer term, UK case law could come to contradict European case law.

Trade

Even if it were to leave the EU, the UK would still continue to play a significant role in trade with the rest of Europe. To do so, the UK will need to negotiate new trade agreements. No doubt these will impose minimum requirements on what UK employers can and can’t do in order to maintain a relatively level playing field with their European counterparts.

Immigration and free movement

One of the key battle grounds in the referendum is immigration. Whilst there is a groundswell for greater controls over the UK’s borders, there is also an acknowledgement that immigration is necessary to help the UK economy grow. At present, EU citizens generally have the right to live and work in fellow member states. A withdrawal from Europe would likely see that right end and a new agreement negotiated. It is unlikely that this would lead to a mass exodus of non-UK workers but no doubt this area would be tightened.

Whilst this may not impact on existing workers who are likely to be protected under transitional provisions, it may change the landscape of future recruitment with a greater focus on selecting from the UK population and the use of skills tests. EU countries would also be able to impose their own restrictions on UK citizens working in Europe.

The aftermath

If the UK votes to leave the EU, it must provide two years’ notice. This is likely to create a frantic period during which trade agreements are re-negotiated and new legislation implemented to cover the gaps left by no longer being subject to EU law. Decisions will also need to be taken as to whether judgments by the European Court of Justice would still bind the UK courts.

In the short term, employment laws and rights are unlikely to be dramatically impacted. However, with the shift away from EU laws, medium to longer term change is inevitable.

By Adam Grant

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