A few weeks have now passed since the UK dramatically voted to leave the European Union. As the dust begins to settle, employers across the UK will inevitably turn their focus to how the UK’s departure from the EU will affect their workforce as well as the wider implications it will have for their business.
The first and perhaps most important point to note is that the UK’s departure from the EU will by no means happen overnight and there will be no immediate impact on UK employment law. The reality of the situation is that the UK has yet to even trigger the formal process of leaving the EU by notifying the European Council under Article 50 of the Lisbon Treaty. Whilst a number of European leaders have called for the UK to leave sooner rather than later, the Treaty doesn’t specify when the UK is required to invoke Article 50 and the consensus amongst MP’s seems to be that the UK should only start the ball rolling once its desired exit strategy is clear.
Even once notice has been served, the UK will be required to negotiate with the remaining EU Member States in order to agree the arrangements for its withdrawal and the terms of its future relationship with the EU. The negotiation process will of course be highly complex and is likely to take some time. The Lisbon Treaty specifies that negotiations may take up to 2 years. However, the 2 year period may be extended with the unanimous consent of all Member States concerned.
Amidst the panic surrounding the EU Referendum, it’s easy to forget that the outcome does not in itself provide any information in respect of how the UK will exit the EU and on what terms. There has been much discussion about the terms of the UK’s exit deal. However, it is ultimately unclear.
Despite speculation about a second referendum and Members of Parliament being able to block any attempt to invoke Article 50, it seems (at least for the moment) that the UK will eventually leave the EU. Areas of particular concern for organisations from an employment perspective are likely to be the impact that the UK’s departure will have on existing employment laws and the impact on the free movement of people.
A number of fundamental employment rights in the UK are derived from the EU including The Equality Act which provides protection against discrimination, The Working Time Regulations 1998 which give workers a right to paid holiday, specified breaks and rest periods and various parental leave rights. The UK’s departure from the EU will put these rights at risk. However, it seems unlikely that they will disappear completely given that they have now become integral to the UK employment sector. Any changes that are made to this area will again not happen overnight. Unravelling the UK from its EU commitments will be an incredibly complex and inevitably lengthy process.
The outcome of the EU Referendum is undeniably momentous and will have wide reaching implications for organisations across the UK for many years to come. However, for the moment the legal positon remains much the same. Given the uncertainty about how the UK will leave the EU and on what terms it is difficult for organisations to take any substantive steps in response to the Referendum outcome. What employers can focus on however is reassuring their workforce at a time of uncertainty and positioning themselves to respond to the UK’s exit from the EU once the terms of the exit become clear.