The aim of this regular newsletter is to inform our readers of interesting developments in labour and employment law around Europe. This month, one topic dominates—the possible withdrawal of the United Kingdom from the European Union.

It will be many months (probably even several years) before we know the final shape of the political settlement the UK reaches with the EU. The UK's possible exit raises many questions, and at the moment it is impossible to give precise answers. Here are a few Q&A that will give you a flavour of the issues.

Q:     If the UK leaves the EU but negotiates a deal allowing it access to the single market, will it still be able to write its own employment laws?

A:      Unlikely—Norway's membership in the European Economic Area (a looser arrangement than membership in the EU) provides it with single-market access. One condition of EEA membership is that Norway has to implement many EU laws, including many of the directives on employment-law matters.

Q:     If the UK exits the EU without negotiating a single-market deal, do all EU-based employment laws simply cease to apply?

A:      No. Nearly all EU employment laws have been adopted by EU-wide directive. Directives require national legislation in order to be implemented and the resulting UK statutes and regulations would survive any exit, unless and until amended or repealed. The UK has a large body of employment law that Parliament approved under both statute and statutory instrument. These will still be in place after any exit and would need to be specifically repealed or amended.

Q:     So which employment laws are vulnerable to repeal and reform, assuming the UK does exit the EU?

A:      The precise shape of the UK's future employment laws will be substantially determined by politics. If, at the time of any exit, the government is a Labour Party-led administration, it is highly unlikely that there will be any significant watering down of employment laws. If the governing party at the time is the Conservative Party, there is likely to be some change, but it is unlikely to be a bonfire of employment laws. There are a couple of notable reasons for this.

First, many key statutory employment rights pre-dated UK membership in the EU. Examples include unfair dismissal rights, sex and race discrimination and equal pay. The UK also adopted disability discrimination laws years before there was an EU directive on that issue. Leaving the EU would not establish any rationale for abandoning such laws.

Second, the UK has gold-plated many laws that have come out of the EU. Examples include maternity and parental rights; Transfer of Undertakings laws, or TUPE; and minimum periods of annual holiday. So it is highly unlikely that these laws would be subject to significant change.

Other laws are more obvious candidates for review after exit. These include the following: 

  • Agency Worker Regulations, which are not popular and are seen as very bureaucratic.
  • Specifically European-flavoured laws, e.g., the European Works Council and Posted Workers Directives, which would have little relevance if the UK was outside the EU.
  • European Court of Justice case law concerning accrual of holiday while employees are sick, as well as the calculation of holiday pay on the basis of average rather than base pay.
  • Some consultation obligations, e.g., collective consultation where 20 or more people are made redundant, which have always sat slightly uncomfortably with UK businesses.

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.