Brexit – how will it affect employment law?

The big day of Brexit referendum is tomorrow 23rd June 2016. One of the popular arguments for voting to leave the EU has been excessive bureaucracy and regulation imposed on the UK by the common market. What is unclear is how things would change, should a Brexit take place. This uncertainty affects the HR field as well as other walks of life and business. There have been several high profile employment tribunal cases in recent years that have escalated to the European Court of Justice (ECJ). Will those court rulings on holiday pay, overtime etc. simply be overturned with a return to status quo before them?

2-year notice period after Brexit vote

The simple answer is ‘no’. Employment lawyers from Allen & Overy explain the immediate effects of a ‘leave’ vote in an article in PersonnelToday: “After the UK has given its formal notice [to leave the EU], there will be a negotiation process for up to two years to agree its exit terms and future relationship with the EU. The UK will leave the EU at the two-year point but could do so sooner (if an earlier deal is reached) or later (if negotiations are extended).” During the negotiation period, nothing will change in terms of regulations.

Norwegian model or ‘Going it alone’

Once the terms of the break have been agreed, the deal brokered with the EU or with individual countries specifically will define what regulations remain in place. If UK wanted to join the European Economic Area (EEA) in a similar fashion to Norway, it will most likely have to abide by most of EU employment laws. Alternatively, but unlikely, UK might decide to make a complete break from the EEA – but probably not for the purpose of changing current employment laws.

European law now part of UK case law

ECJ court rulings have become so embedded in UK case law that retracting those rulings would be complex. The rulings are therefore likely to remain influential in future case law unless new rulings are made in the UK high courts that depart from existing case law.

Employees’ rights embedded in contracts

Most employment contracts incorporate current employment law and changing the contractual terms would be time consuming and require employee consent. Changing the contractual terms could also open up a risk of employment tribunal claims.

Data Protection Act is changing in 2018 – regardless of Brexit

In terms of upcoming legislation changes dictated by the EU, the Data Protection Act will soon be updated. Should UK choose to leave the EU, these changes will still be implemented during the 2 year notice period before the break is final. The law experts expect that these changes will remain in place even after a Brexit to ensure continued business relations between UK and EU countries. “As a matter of policy, the UK is also likely to impose equivalent data protection standards in order to be regarded by the European Commission as an “adequate jurisdiction” for data transfers to and from the EU.”

So the UK public may vote ‘leave’ but we are nonetheless unlikely to see the back of EU regulation.