June 16, 2016

Employment Law & Brexit- What would it mean?

This post was written by: Ilinca Mardarescu

Of course it’s extremely difficult for anyone to speculate on the consequences of Brexit, seeing as it is a unique position we find ourselves in, and there are much more qualified and appropriate people who can do this better than I.  However, speculate we must if we are to make an informed decision on 23rd June 2016.

Those advocating a Brexit would argue that employment law amongst most others is heavily influenced by the EU.  And this is of course correct. They would cite that EU laws are intrusive and the “red tape” that businesses have to deal with stifle enterprise. But I am not convinced this is so.  If we did leave the EU, would the government really repeal all the employment protections that we are now accustomed to?

If the Brexit campaign win on 23rd June there will be a period of two years (minimum) in which we will prepare for the exit – it will not be an automatic closing of our doors. This period will inevitably be a somewhat unstable time for the country going through a period of great change. The government will not want to do anything to “rock the boat”.  Creating stability will be their main concern.

Furthermore, although numerous laws are indeed based on the EU directives, each country then implements domestic legislation which gives effect to the EU directives.  And in many cases, the UK government have chosen to not only implement the EU directives but to extend them.  For instance, the EU has stipulated that employees should be allowed a minimum of 20 days annual leave per year – but the UK government have extended this to 28 days in the UK. Similarly, with maternity leave or the right to request flexible working, the UK exceeds the minimum requirements set down by the EU.

It is also unlikely any of the discrimination legislation would be repealed. Firstly because the majority of people would now agree that doing so would be taking a real step backwards, but also relevant is the fact that the UK implemented various discrimination laws well before the EU ever did.

How about the family friendly employment laws we enjoy in the UK? The recent shared parental leave and pay legislation is purely a UK one – nothing to do with the EU. And as detailed above, we have gone so far as to extend the legislation in some areas more than in the EU.  It is highly unlikely anything substantial will change in this arena either then.

There will of course be some amendments.  It is anticipated that one of those that will be the first to fall by the wayside is the CRD IV which limits bankers variable pay (bonuses) throughout Europe. Our government may well decide that the one thing our economy will need is to be able to stay as competitive as possible. It is also likely that the agency workers regulations (which a stipulates that any agency workers who have been in the same position for 12 weeks or more should be treated equally to the equivalent full time employees) will be scrapped. Some of the record keeping requirements in the Working Time Directive are likely to be scrapped as would the need to follow the recent decisions regarding holiday pay being able to be carried over when an employee is off on long-term sick or including commission calculations into holiday pay for employee who work in sale-based roles.

The above would hardly be ground-breaking amendments in the grand scheme of things, but will matter a great deal to many individuals.  However, the biggest impact will ultimately be the question of immigration, or free movement of workers.  If, as many commentators believe, we adopt a Norway-style model, it is unlikely we will in fact be able to restrict this free movement of workers.

Whatever the decision, the employment landscape will certainly shift. But whether it is by as much as people believe it will…we will have to wait and see.

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