Brexit - what will the impact be on employment law?

By KMC Human Resources

12 Jul 2016

The dust has yet to settle on the historic decision of the UK to leave the EU following the June 23 referendum.

In what has been a fortnight of political turmoil and debate reaching every corner of the UK, it seems that there are perhaps more unanswered questions now than ever before.

Whilst the focus has been largely on the political fallout following ‘Brexit’, and the effect the ‘leave’ vote has had on the wider economy, it is important to look at the impact the decision will have on business in the short to medium term.

One area that potentially stands to be affected most is employment law. Much of the legislation that has come into force in the UK over recent times has been derived from the EU.

For example, the calculation of holiday pay to include overtime and bonus pay, moves towards family friendly working policies, tighter TUPE regulations and widespread anti-discrimination rules have all been borne from EU directives and decisions made in the European Court of Justice.

For the time being, the advice is not to panic. Any existing EU-driven employment law policies will remain as they are until the eventual point that the UK leaves the European Union.

What happens after the point of exit is where things will get interesting. Much of EU legislation is now enshrined in UK law and whilst in theory the government could dismantle employment law as it stands, enforcing its own set of rules and regulations under which employers and employees will be governed, the question is whether this will happen; even with the strongest political will.

It is perhaps more likely that the status quo will be maintained for several years to come. Many EU-derived employment laws have been seen to provide positive change, such as the Working Time Directive, which has brought about better working conditions and a number of fundamental rights for those employed in the UK.

One of the big question marks remains around how EU migrants will be treated in the eyes of the law and whether the future will see EU citizens requiring a visa or permit to work in Britain.

This of course relies on many wider issues, predominantly the free movement of people into the UK – the debate on which is likely to rage on for many months to come.

So what about EU citizens who already live and work in the UK? The CIPD says ‘There is no significant threat to the rights of EEA workers already in the UK to live and work here so you should reassure your existing EU workers that they don’t face any risk to their job security.

It seems likely that there will be some sort of worker registration scheme introduced in the future for EEA nationals that are already in the UK to protect their right to continue to live and work in the UK.’ The message for employers is to sit tight for the time being, whilst keeping an eye on any developments as they occur. KMC HR will provide updates on future decisions, keeping you informed as to how any changes will affect you and your business.

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