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Brexit Stage Left: Employment Law Impact

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Brexit Stage Left: Employment Law Impact

The European Union’s willingness to protect individual rights has been the driving force for much of the UK’s employment law. A vote to leave the European Union on June 23rd doesn’t open the door to immediate wholesale change, but it gives the UK Government power to work independently of the EU; allowing previously imposed EU regulations and directives to be repealed in the future. Many EU rights and principles are already incorporated into national law reducing the likelihood of them being tampered with; it would be unthinkable for any Government to remove protections against discrimination in the workplace or the principles surrounding equal pay.

With the Government’s desired outcome to remain as part of the EU, there hasn’t been much talk about what will be, and needs to be, changed. Should we vote to leave, the repercussions will be dependent on the new relationship struck between the EU and the UK. Models that continue to work well for Norway, Sweden and Turkey.

What Could Happen If We Brexited?

First and foremost, nothing would happen over night. Upon serving notice that a member state wishes to leave the EU a period of negotiation is entered; this is where the terms of the withdrawal are ironed out and is usually a 2 year period, but may be even longer or indeed shorter.

Whatever happens, in order for the UK to retain some formal trade relationship with the EU the Government will have to adopt certain directives and regulations. Norway, who is not a member of the EU, only the European Economic Area (EEA), is constrained by the majority of EU employment law due to stipulations in their trade agreements. Having been a member state of the EU since 1973, many of the EU requirements have become embedded in the fabric of UK employment law. Movement to change many of the existing levels of protection would come as a shock to employers, equally, changes to core areas that are currently protected may be viewed as tantamount to political suicide.

Whilst European laws that have been embedded via an Act of Parliament, like the Equality Act 2010, would remain enforceable, regulations introduced under ministerial power, such as the working time directive, would be susceptible under the breakdown of the treaty.

However, extensive changes to these would create huge uncertainty and so it is likely that changes of this nature, if there are to be any, will be deferred and made incrementally.

Some of the key areas that might be affected under Brexit are: TUPE regulations, compensation pay outs in discrimination cases, capital requirement directives (the cap on bankers bonus’) and potentially the most susceptible: the agency workers directive, conferring agency workers near equal rights to those of permanent employees.


Planning For a Brexit

UK employment law is unlikely suffer drastic change in the immediate to short term, based on the accepted standards that have been devolved from Europe into the practice of UK employers.

The core pillars upon which employment laws are built will more than likely remain unaffected, unless the move is to extend their reach; these principles are seeded well into our culture and backed by strong social policy. The same is true for many employee-friendly laws, which confer a level of protection on individuals that would be tough to change.

Depending on the structure of the agreement reached between the UK and the EU, it is likely that the Court of Justice of the European Union (CJEU) will lose its mandate to adjudicate on some issues. Although, under a model like that of Norway, the ECJ would still have jurisdiction over employment law.

Even if terms were agreed for a full withdrawal of the UK from the EU it is likely that many CJEU rulings would, in time, be incorporated into UK case law. UK employment tribunals would not initially be able to depart from CJEU rulings, due to a lack of alternative precedent from which to take decisions. It is also likely the more prestigious UK courts will seek to draw influence from CJEU rulings, meaning many core principles forged by the CJEU will in time be entrenched in UK law. This may change over time, but will likely form a vessel for gradual tinkering rather than immediate overhaul.

To Brexit, or not to Brett

With the closeness of the relationship established between the EU and the UK over the last 40 years, departure from the EU on June 23rd is unlikely to bring any radical changes to employment law. The process of EU untangling will be long and costly, so mitigating any risks associated with the outcome will be difficult and hard to foresee with much depending on the new relationship that is to be forged.


Whilst the Brexit outcome is uncertain, its never too soon to start planning for the future of your business. Unlike a traditional law firm, we don't charge by the hour and we won't charge for each phone call or email. Instead, all of our fees are fixed and agreed with you upfront. Why not contact us today to book your free consultation to discuss your legal requirements in further detail, we’ll be delighted to talk to you!


The contents of this article are intended solely for information purposes only and should not be construed as legal advice or financial advice or opinion in any specific facts or circumstances.

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