Martin Hamilton from Capsticks reviews what we know – and what we don’t know – about the likely effects of Brexit on employment law.
The UK’s decision last month to leave the European Union has caused huge uncertainty across the country for business, the economy and public services such as the NHS. At the time of writing, the only certainty seems to be that the future is uncertain, as we await the start of negotiations over our exit from the EU and the terms of our future relationship with our European neighbours.
The position in relation to employment law and the field of human resources is similarly uncertain. Whilst there will not be any immediate impact on employment law, given the lengthy exit process, in the long term the future is unclear.
Much employment law in the UK, such as the right not to be unfairly dismissed and whistleblowing protection, does not derive from EU law and will not therefore be affected by our exit from the EU. In addition, many principles from EU law are incorporated into UK law by Acts of Parliament – the Equality Act enshrines EU anti-discrimination principles into UK law, for example. Even after a so-called Brexit, such Acts of Parliament would have to repealed individually, a process which would take some considerable time, even if there were any appetite to do so from whoever is in power.
Also unclear is the future of rights that are derived from secondary legislation, such as those under TUPE, the Working Time Regulations or the Agency Workers Regulations. Such rights are incorporated into UK law under the European Communities Act 1972 – if this Act were repealed, would all the legislation made under it automatically fall away?
Much will of course depend on the nature of the exit arrangements that we negotiate with the EU. If we establish an EEA type arrangement, such as the EU currently has with Norway, then the UK would remain bound by European employment laws, as we are now. However, it is also possible that we will end up with a WTO arrangement, in which we are free to determine our own domestic employment legislation, or a bespoke arrangement, the terms of which are currently anybody’s guess.
Much will also depend on the make up of any future government. The current Conservative government, and its predecessor coalition, has shown a clear willingness to abolish red tape and lessen the burden on businesses, and this approach is likely to be maintained particularly if, as seems likely, the exit from the EU triggers economic decline and difficult trading conditions.
Whatever the political and constitutional fall out of Brexit, a wholesale overhaul of employment law is unlikely. No future government is likely to seek to repeal discrimination law in its entirety, although it is possible that certain changes will be made in due course – a removal of uncapped compensation, for example. Similarly, whilst the protections currently offered by the Working Time Regulations are unlikely to be abandoned, the unpopular 48-hour limit on the working week could be under threat, and it is highly likely that the UK government would move to ensure that holiday pay is limited to basic salary only – a position which has been much litigated in the UK tribunals following recent rulings in the European court.
TUPE is another area that is likely to see some changes, making it easier to harmonise terms and conditions following a business transfer, for example.
Another big uncertainty is the future immigration status of EU workers, both those who are currently living and working in the UK and those who may wish to take up work in the UK in the future. The NHS is, of course, particularly dependent on its overseas workforce, with approximately 130,000 EU health workers, including 10% of doctors and 5% of nurses, according to the NHS Confederation. Whilst it is likely that any deal negotiated between the UK and the EU will require the principle of freedom of movement to be retained – early indications suggest that the UK will not be permitted to retain access to the single market if it does not do so – this is an issue which will be of great concern to many employers across the healthcare sector and their staff.
Whilst little is likely to change in the next couple of years as the EU exit process runs its course, employers are wise to keep an eye on events and ensure that they are prepared for any changes that might ensue.
In light of the reported increase in race hate crimes since the announcement of the referendum result, employers would be well advised to take steps now to review their bullying, harassment and equality and diversity policies to ensure they are robust, and make sure that employees are aware that bullying/abuse on the grounds of race or nationality will be dealt with as a disciplinary offence.
Employers should also take steps to communicate with and reassure their EU employees that they are valuable members of staff. In support of this, NHS Employers has launched a campaign on social media with the hashtag #LoveOurEUStaff, designed to send a positive message to show appreciation for EU staff in the NHS.
Whilst EU staff will need to take their own immigration advice, employers may wish to consider encouraging those who have or are approaching five years in the country to apply for indefinite leave to remain in the UK. Dedicated HR support to advise employees who are concerned about their position is also advisable.
Martin Hamilton, Head of Employment, Capsticks