Over six months has now passed since the UK took the decision to leave the European Union (EU) so now is a good time to take stock of the impact this will have, or has had, in employment law and what the practical implications may be for human resources professionals. Much of UK employment law derives from, or is influenced by, EU law, and so the potential impact of Brexit on UK employment is significant. It is important to remember that despite the referendum the UK remains a Member State of the EU and is bound by EU law until such time as the UK leaves the EU.
The European Communities Act was passed in 1972 giving EU law supremacy over UK national law. As time has progressed, EU and UK law have become more and more intertwined and it will be difficult to separate them, although not impossible.
Each EU member state has a say in the legislative process and can, and have successfully blocked EU legislation. The EU hands down Directives and Regulations. Member states are given deadlines for implementation. While Regulations have direct effect automatically as law in each member state, Directives have indirect effect which require member states to pass legislation to give effect to the provisions of the directive.
With the Supreme Court's decision as to how Article 50 should be triggered by the government awaited, exactly when the UK leaves the EU is another one of the unknowns flowing from the referendum result. The UK Government says that it intends to trigger Article 50 in March 2017. So how will Brexit affect employment law? Many aspects of our law are based on or heavily influenced by EU law: principles of equal treatment and non-discrimination; agency workers' rights; TUPE and collective redundancy processes; and working time rules including those about holiday pay and rest breaks to name a few.
In October, the Prime Minister, Theresa May said that existing employment rights will continue to be guaranteed in law as long as she is Prime Minister. Moreover, any Government attempt to erode employee rights is likely to gain little public support. It would be reasonable to infer from this then that we will see little impact of Brexit on employment law in the meantime. That is however until one considers one of the fundamental principles of our relationship with the EU – the free movement of EU workers between the UK and EU member states.
Immigration was a key issue during the referendum debate and it seems unlikely that any agreement with the EU post Brexit would see UK immigration arrangements with the EU continue in their current form. Indeed, on 15th December 2016, 'Brexit Secretary' David Davis said that UK immigration controls will not be up for debate in EU 'divorce talks' and that one of the key outcomes of Brexit should be to give Parliament back control of Britain's borders. This comes at the same time as repeated insistence from EU leaders that the UK cannot remain in the single market without adherence to the free movement of workers rules. How this is resolved, with the UK's apparent desire to remain in a favourable trading environment while having control of its own immigration remains to be seen.
The Office of Budget Responsibility (OBR) has estimated that net migration will be 80,000 a year lower as a result of our decision to leave the EU. Many of those who voted 'leave' in June may consider this to be a good thing, but how will this affect the many businesses and organisations which rely on EU migration? We still do not know whether EU nationals currently working in the UK will be able to remain and work in the UK after we leave the EU.
The key theme flowing from all of this is uncertainty for business (and spare a thought for the EU migrant workers whose livelihoods may well be directly impacted).
Businesses should therefore assess the potential impact changes to the immigration rules would have on their workforce:
- Do they employ staff who rely on the UK's membership of the EU to work in the UK?
- Review the terms on which they engage labour from EU countries.
- Do they employ UK citizens working on projects overseas?
- Review staffing arrangements and see where/which members of the workforce may be affected by changes in the immigration rules. Think about the practical steps that can be taken to help inform and support affected staff as the position becomes clearer; consider whether staff may be eligible to apply for residency now or in the near future.
- Will there be a potentially adverse effect on work resourcing? Plan now how that may be managed.
So while basic areas of employment law such as unfair dismissal, family friendly rights, national minimum wage and working time arrangements are unlikely to change post-Brexit, negotiations in terms of the free movement of workers principle will almost certainly see a change in how UK employers are able to employ workers from other European member states; and how UK nationals may work in the EU.
If we have learned anything from 2016, it should be to expect the unexpected. Keep an eye out for further updates.
The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.