What would a “Brexit” mean for UK Employment law?

On 23 June 2016 a referendum will be held to decide whether the UK should remain in the European Union. If the nation votes to leave, the implications will be significant. One area which is likely to see changes is employment law.

A number of fundamental employment rights in the UK are derived from the EU meaning that a “Brexit” has the potential to make significant changes in this area.

Discrimination

The Equality Act 2010 affords employees protection from discrimination. While this is a piece of primary legislation the Government could still choose to repeal it if the UK exits the EU. While a complete repeal of the Equality Act is unlikely, a number of key changes have been suggested, including adding a cap on compensation awarded in discrimination claims.

Working Time Regulations

The Working Time Regulations 1998 give workers a right to paid holiday, specified breaks and rest periods. In the same way as the Equality Act, a complete repeal of the law in this area is unlikely. However, the Government may decide to make changes to those areas regarded as controversial such as possibly removing the right for employees to accrue annual leave during sickness absence and the 48 hour maximum working week (for which the UK has negotiated an opt-out in any event).

Data Protection

The Data Protection Act 1998 governs the processing of personal data and key changes in this area are unlikely. Retaining this Act or an equivalent act in the event of a “Brexit” will be crucial for the UK if it wishes to maintain a trade agreement with the EU. In particular the UK will need to be able to continue to demonstrate compliance when transferring personal data between the UK and other EU member states. It will also need to show compliance with the EU draft General Data Protection Regulation which is expected to receive formal approval later this year.

Free Movement of Workers

One of the key areas of concern for employers and employees alike is how an exit will impact on the free movement of workers throughout the EU. In the event of a “Brexit”, UK nationals living and working in other EU countries and EU nationals living and working in the UK would effectively lose their automatic right to free movement. In practice, it is highly unlikely that workers would be asked to return to their home country immediately. It has been suggested that in the short term the British government may agree an amnesty with the EU member states. In the medium to long term, the free movement of workers is likely to play a big factor in the UK negotiating a trade agreement with the EU.

The UK is required to give two years’ notice of an intention to leave the EU so any changes to employment law arising as a result of an exit will take some time to impact.

Even if the UK does vote to leave the EU, the changes to employment law are unlikely to be significant, at least in the short term. A number of employment rights derived from the EU have now become fundamental UK rights. Any attempts to repeal fundamental rights such as parental leave and paid holiday are likely to be regarded as highly controversial.

Perhaps most importantly, the EU remains the UK’s biggest export market and will undoubtedly want to retain an ongoing trade relationship with the EU. This is likely to restrict any significant changes that the UK might have in mind.