Brexit – what’s the impact on those of you who are employing people to work in your businesses?
We’ve been keeping a close eye on what’s being reported about the potential impact to employers if we were to vote Brexit on 23 June.
Firstly, it seems fair to say that no one can say for sure what impact it will have in many areas.
Secondly, it isn’t going to happen overnight as the withdrawal process apparently takes two years or more; this means it will be some time before any changes could be implemented and there is the as yet unanswered question as to what we’d be required to do during the exit transition process if the EU make any rulings that would usually impact English law.
Thirdly, there are a number of different options or models of our relationship with the EU that might be the result of a leave vote – it isn’t necessarily just a clear cut in or out choice it would seem. The CIPD’s advice to employers on Brexit states “there are simply too many uncertainties that will not be clear until after the result of the referendum, and potentially some time after then”. (Rachel Suff, Public Policy Advisor, CIPD)
So how do we make an informed choice come 23 June?
Whilst it seems employment law experts are not predicting any radical shake ups, at least not in the near future, here are some areas where experts are indicating it seems possible there may at some point be changes if we exit:
1. Freedom of movement – rights to live and work in the UK may change meaning an increased need for visas & work permits such as we currently still require for non EU citizens
2. Employee protection legislation – we often hear the refrain “the law is on the side of the employee” and some of what is referred to in this context is legislation or regulations that result from EU Directives or rulings – it is possible that a British Government unregulated by EU control may choose to revise or repeal some of these regulations or laws – this includes Working Time Regulations, TUPE rules around harmonisation of T&Cs, Agency Worker Regulations and recent rulings on overtime and commission being included in holiday pay.
3. Trade Union Activity – it has been suggested by some legal experts that this is an area the Government might be most keen to clamp down in given the opportunity.
4. Discrimination Claim Payments Caps – similarly employment law experts are suggesting this might be something the Government would implement if given free rein to make changes – currently discrimination cases have no limit on the awards that can be made.
Employers shouldn’t expect a radical shake up in many areas of employment law however, where we in fact created the legislation ourselves without EU direction (our primary law rather than EU derived or secondary law), and where often we are already more generous than many of our European neighbours.
Furthermore it may be complex to disentangle the current state of law that has come to exist when there may have been EU involvement initially but we subsequently have interpreted that into our own legislation, and then further defined or reinforced it through UK case law.
Many employers will not be aware of how the legislation we adhere to has come about and there may be a tendency to “blame” the EU for regulations we don’t like that in fact were derived in the UK. For example it is an EU Working Time Directive that led to all workers being entitled to 20 days holiday per year, but it was the UK that extended this to the current 28 days (including Bank Holidays) statutory entitlement.
In addition, in considering where changes might be made, the Government will obviously consider the potential backlash from employees who have enjoyed these rights so far. What will it do to morale and employee motivation to take away rights they have come to expect? What impact will that have on voter decisions come the next general election? No clear answers here in the employment arena we’re afraid but maybe a reasonably confident message that for quite some time to come it is probably going to be pretty much “business as usual”.
If you wish to read the CIPD viewpoint in full it is found here. http://www.cipd.co.uk/hr-resources/voice/04/real-impact-eu-uk-employment.aspx?utm_medium=email&utm_source=cipd&utm_campaign=cipdupdate&utm_term=552811&utm_content=270416-5725-9747–20160511144545-the+likely+impact+of+a+%E2%80%98leave%E2%80%99+vote+on+employment+law