Substantial changes in employment law are not likely in the short-term, writes Kerry Norval
Now our initial personal reactions to Friday’s historical ‘Leave’ vote have subsided slightly, our thoughts turn to the future and the impact on our lives going forward. It is no surprise that one of the main concerns of business is gauging exactly what effect a withdrawal from the EU will mean – particularly in the field of immigration and employment.
A lot of what we currently understand UK employment law to be has been shaped by Europe: discrimination legislation, family rights, limits on working time, collective consultation obligations in redundancy.
In light of Friday’s result, some of these rights will simply fall away without further measures being taken, and the government is technically free to repeal the rest. If this happened, the world of work as we know it would be unrecognisable.
Some proposed legislation will no longer apply to the UK unless a similar law is introduced by the UK government, such as in relation to the recent EU Trade Secrets Directive. However, there are a number of reasons why extensive repeal of existing laws is unlikely to happen in practice.
From an immigration perspective, we might expect to see an influx of workers from other EU countries prior to our exit; with increased red tape after that if a visa system is implemented. However, much will depend upon the model ultimately agreed and the extent to which free movement of workers is used as a bargaining chip in trade negotiations. The results of these discussions could curtail the government’s ability to depart from the status quo.
Similarly, the changes we can expect in employment law may be less than expected for a number of reasons.
From an ideological point of view, many of the EU employment laws are entrenched within our society. Some started out as existing UK rights and others have been adopted and enhanced through UK legislation. Any political appetite to overhaul these rights dramatically is probably unlikely, irrespective of which party is in power or who is the next prime minister.
From an economic point of view, it is clear that the UK will need to retain a relationship with the EU, given that Europe is its biggest export market. Even countries such as Norway and Switzerland – who are currently non-EU members – have been required to accept most of EU law as the price they pay for free trade.
Lastly, from a practical point of view, any changes that do take place cannot be made overnight, as the UK is required to give two years’ notice before it may leave.
Given the destabilising effect which an overhaul would bring, any changes that are made are more likely to be done in a relatively modest and piecemeal fashion. The changes the government are likely to consider include making it easier to harmonise terms following a business sale; imposing a cap on compensation in discrimination claims and changing the accrual of annual leave and calculation of holiday pay.
It will also be interesting to see what impact the withdrawal from the EU will have on UK case law. Arguably the UK courts’ obligation to interpret UK legislation in a manner consistent with European decisions – when the two are clearly not aligned – has caused the most upheaval to employment law. The ‘Woolworths’ decision regarding redundancy consultation; the ‘Lock’ decision on calculating holiday pay; and the interplay between sickness absence and holiday entitlement are all cases in point.
It is difficult to gauge the exact implications that EU withdrawal will have on businesses. There is no comparable situation from which to draw.
However, businesses can take some comfort in the knowledge that the landscape of employment law is unlikely to change vastly, at least not in the short term.
• Kerry Norval is a senior solicitor at Burness Paull