UK: Anthony Korn Examines The Potential Implications Of Brexit On Employment Law

Last Updated: 3 August 2016
Article by Anthony Korn

One area of law where Brexit may have an impact is employment law.

Leaving aside Treaty obligations guaranteeing the free movement of workers (Article 45) and the principle of equal pay for male and female workers for equal work or work of equal value (Article 141), most of the 'social' obligations have been introduced by way of EU Directives.  

Since the UK joined the EU, the UK has been required either to introduce or amend its laws on discrimination (including pregnancy and maternity discrimination and parental leave), health and safety, working time, TUPE, part time workers, fixed term workers and agency workers (to name but a few) in order to implement European Directives. In appropriate circumstances, companies have been required to set up European Works Councils to implement the European Works Councils Directive and mechanisms for Information and Consultation to give effect to the Information and Consultation of Employees Directive. Insolvency law has been amended to give effect to the Insolvency Directive. 

According to Butterworths Employment Law Handbook, the employment lawyers bible, there are no less than 33 European Directives which the UK has been required to implement.  

Case law has also established that the UK is required to interpret those laws and any other laws based on EU Directives in a manner which gives effect to those Directives. Indeed  case law has established that UK courts and tribunals are required to amend or 'read in' wording to our domestic law which gives effect to those Directives. For example in EBR Attridge Law LLP v Coleman [2010] IRLR 10 the EAT in effect rewrote Section 3B of the Disability Discrimination Act 1995 (now Section 13 of the Equality Act 2010) to include a right to complain of associative discrimination where a mother of a disabled child complained of associative discrimination arising out of her caring responsibilities for her child. More recently in Bear Scotland Ltd v Fulton  [2015] IRLR 15 the EAT gave effect to CJEU rulings by allowing claims to be brought for overtime pay and commission payments during periods of statutory holiday again by making it clear that the normal definition of remuneration did not apply to claims made under Regulation 13 of the Working Time Regulations 1998.   

In some instances where the UK has failed to comply with EU Directives so called infarction proceeding can be brought against the UK by the European Commission, for example in 1981 the European Commission brought such proceedings against the UK because its redundancy consultation laws did not comply with the requirement of the Collective Redundancy Directive. Such proceedings were also threatened when the UK did not comply with its treaty obligations (then Article 119 of the Treaty) to implement the principle of equal pay for work of equal value. 

Last but not least, the European Communities Act 1972 requires UK Courts to give effect of the judgment of the European Court (now called the CJEU), not to be confused with the European Court of Human Rights which adjudicates upon the European Human Rights Convention.

So, on the face of it, if all the legislation (including statutory instruments) were to be repealed following a Brexit, this would have a considerable effect on the employment law landscape.

But things are not quite so straightforward as they seem for a number of reasons.

First, Brexit will not take effect until the terms of Brexit have been agreed. This may take at least two years, possibly longer. Until such time as the terms are agreed, Britain will remain in the EU and be bound by its Treaty obligations and all EU Directives. It is hard to assess whether or not in the interim judges will be influenced by the Brexit decision in their interpretation of EU Laws, for example in their interpretation of cases brought under the Working Time Regulations which regulate hours of work and holidays. It is possible that judges may take a less strict view of these requirements in the knowledge that in practical terms their decisions will be less easy to challenge in the European Court (given the length of time it takes for such cases to be heard) but technically we remain bound by all European laws until we leave.

Secondly, if Brexit is based on what is called the Norwegian option, i.e. that Britain retains access to the 'single market', then it is likely that this will be conditional on the continued application of EU employment law directives and indeed any future Directives which the EU may choose to adopt because the remaining 27 member are unlikely to look kindly on the UK being given a potential competitive advantage. Indeed in this context, one of the strongest arguments advanced by the Remain campaign is that Britain would be bound by such laws but would loose its ability to have its say and thereby influence the terms of those laws as it would no longer be a member of the EU. There may be other Directives which Parliament may simply not wish to repeal (for example the so called Rome Regulations which determine the choice of legal systems which should apply to contracts).

Thirdly, even if access to the single market was not subject to these conditions, it is unlikely that Britain (England, Wales and Northern Ireland, particularly Scotland) will want to repeal all of these laws. For example, it is almost inconceivable that we will repeal the Equality Act 2010 which covers discrimination in employment as well as goods and services. At the other end of the spectrum, it is possible that the Working Time Regulations may be repealed but again it is most unlikely that Britain will go back to the pre-1998 position that there were no legal entitlement to a minimum period of holiday. Furthermore, whilst judges will no longer be bound to follow the judgments of CJEU, given that many of these rights were introduced to implement European Law, this source of law may well still be relevant in interpreting those rights even after Brexit.

For all these reasons it may well be that nothing much changes. 

Finally, contrary to the belief of many Brexiters, the basic 'rights' found in the Employment Rights Act 1996 pre-date the UK's accession to the EU in 1972 and will not necessarily change after Brexit. It has always been open to Parliament to change or even repeal these laws.  For example, the right to complain of unfair dismissal. Other examples include the National Minimum Wage Act 1998 and the Equal Pay Act 1970 which pre-dated the accession to the EU in 1972 (although EU law has had some impact on the introduction of the right to bring claims for work of equal value, following infarction proceedings against the UK by the European Commission).

So those who are hoping for a 'brave new world' of further de-regulation following Brexit, it is of course possible that this will happen as a result of the political choices made by Government but don't expect much to change.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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