Employees in the UK benefit from employment rights from two sources. Domestic law which is UK based law in the form of Acts of Parliament and case law, the second source of law is EU law. Under the terms of the European Communities Act 1972, EU law has supremacy over domestic law, effectively meaning that domestic law should not conflict with EU law.
A number of employment rights are derived from the EU. Discrimination, pregnancy, maternity and parental leave, part time and fixed term workers, agency workers, employees insolvency rights and the rights of employees on a transfer of business are all rights which are derived from EU law. These largely make up the majority of employee rights. A vote in favour of Brexit, which will see the UK leave the EU, will have an impact on employment law in the UK. However, it is unlikely that a vote in favour of Brexit would have an immediate, adverse impact.
Some rights are independent and are unlikely to be affected by Brexit. The best example of this is the Equality Act 2010. While the Equality Act does mirror some EU Equal Treatment Directives, it is a free standing Act of the UK Parliament. On the other hand the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE Regulations) is partially free standing and partially not. The TUPE Regulations are the UK Government’s implementation of an EU Directive. However, the 2006 TUPE Regulations do not simply mirror the EU Directive and does go further than the Directive by supplementing service provision changes.
Some employment rights are purely domestic law. Employees who have two years or more service have the right not to be unfairly dismissed. The recent right to shared parental leave allows parents flexibility in how they share the care of their child in the child’s first year of life. Both of these rights are unlikely to be affected by the outcome of Brexit.
If, following a yes vote for Brexit, we are no longer part of the EU and the Government removes the European Communities Act, it would remove the framework which binds EU law and domestic law and any regulations passed under it would fall away. Areas of law where we may see change are working time, the TUPE Regulations 2006 and annual leave. The Working Time Directive places a restriction of a maximum 48 hour working week, with the ability to ask employees to opt out of the requirement. The Working Time Directive also gives employees the right to paid holidays and paid rest breaks. Given that the Working Time Directive is purely EU law, there could be a chance that the Working Time Directive would be scrapped completely. Under the TUPE Regulations 2006 protects employees whose employment transfers from one business to another. If the UK was to leave the EU it is likely that the Government would seek to make it easier to harmonise terms and conditions following a transfer.
In terms of annual leave, employees in the UK currently benefit from more leave days than EU entitlement allows. However, in recent times there has been much case law from the European Court of Justice of the European Union which has caused confusion in respect of holiday pay. Recent case law relates to holiday pay which accrues when an employee is on long term sick leave and how holiday pay should be calculated with reference to aspects such as commission, irregular hours and over time. Holiday pay is a perfect example of an area that could be completely reformed by the UK Government if we were no longer part of the EU.
Any changes to be made to employment legislation depends largely on whether the next Government would want to implement any changes. Much of the employment rights which are derived from the EU has been in force for some time. For example the Equality Act 2010 embodies previous UK legislation, such as the Sex Discrimination Act and the Equal Pay Act which goes back to the 1970s. As such, the current legislation reflects long held and accepted areas of good practice. While the Employment Tribunal does deal with discrimination claims, many employers are conscious of the fact that the legislation does exist and don’t subject their staff to discrimination.
It is difficult to see that the Government would seek to remove legislation, and therefore remove employee rights, which would seem like a drastic measure. If changes are to be made it is more likely to be a gradual process, rather than a dramatic removal of legislation.
EU citizens currently have the right to freedom of movement which allows them the right to work in any EU Country. If the UK was to leave the EU then this right falls away. Those coming to work in the UK from outside the EU are subject to complex Visa restrictions. It may be the case that such a strict Visa regime would apply to EU nationals. For EU Nationals already living and working in the UK, transitional arrangements may form part of negotiations with the EU both in respect of EU citizens currently living and working in the UK and UK citizens working in other EU Counties.
While the impact of a vote in favour of Brexit on employment rights is currently unclear, it does seem that a vote to leave would, in the long term, result at least in transitional changes which will not happen over night.
Author: Priya Cunningham at Thompsons Solicitors (see website).