Brexit - How will it impact employment laws?

Britain’s vote to leave the EU has left both HR professionals and job-seekers alike wondering what the future may hold for employment law in the UK. Once the government invokes Article 50 of the Lisbon Treaty, they will have two years to go through the lengthy and complex process of negotiating the terms of their exit from the bloc. Because employment law in the UK is closely intertwined with the EU employment legislation, strategising a path in which to either maintain or change UK employment laws as they currently stand, will not only take time but careful consideration. We examine the specific legal concerns associated with employment, and speculate how a shift in these laws could change the face of national labour legislation.


“British employers will need to be aware of how leaving the EU will affect immigration,” writes Jane Crosby, specialist in commercial litigation and employment law. There are approximately over 2 million EU migrants working across the UK, but should the government negotiate to restrict free movement of labour, there may be some additional legislative red tape for employers to consider when hiring an EU employee. “Experts are somewhat split on what the move will mean for EU workers in the UK, with many believing those who are already in the UK will be given leave to stay without question, and others suggesting that EU migrants will thereafter have to satisfy similar immigration credentials as non-EU residents do at present,” Jane writes.

Discrimination compensation - in accordance with the European Quality Assurance

Contrary to popular belief, many of the labour flexibility and anti discrimination laws the British workforce enjoys today, were in reality introduced and implemented by the British government. The Equality Employment Act 2010 is an Act of Parliament, although it has the same goals as the four major EU Equal Treatment Directives. However, there has been a point of contention in the legislation enforced by the European Communities Act, and that is the level of financial compensation an employee can claim if unfairly dismissed or discriminated against by an employer. “Although the government could repeal the European Quality Assurance after exiting the EU, it would be a controversial move. It is difficult to imagine many employers arguing that they should be free to discriminate, and any change to the existing regime of direct discrimination, indirect discrimination and harassment seems unlikely,” writes James Davies, Head of Employment at Lewis Silkin. However, there are aspects of the Equality Act that have already been changed in favour of businesses. ‘It must be remembered that recent changes to the unfair dismissal qualification period (from 1 year to 2 years)  and the introduction of fees for employment tribunal applications emanated from the UK, not Brussels,’ writes Rachel Suff, Public Policy Adviser at the CIPD. For this reason, experts speculate that parliament may introduce additional revisions to the Act in favour of businesses. “What may change is the rate of compensation that people can receive in discrimination claims against employers, which could face a limit under UK law,” Jane writes.

Working Time Directive

The Working Time Directive was derived from EU employment legislation, and before it was implemented into UK employment law, British workers were not entitled to paid annual leave. “The Directive ensured that all workers should be entitled to at least 20 days’ paid annual holiday, but the UK Government increased this entitlement to 28 days, including bank holidays. This is a perfect example of how the UK Government has chosen to ‘gold-plate’ some aspects of EU law, providing more generous provision for UK workers,” Rachel writes. Another element to look out for is how the EU has made it illegal for employers to demand that employees work over an average of 48 hours per week. Although John Major secured an opt-out for the UK from this directive in 1992, the Labour Government opted in 6 years later. Working class voters who backed Brexit are unlikely to want to see this protection disappear, despite the cost to employers, which is said to be above £4 billion a year.

Temporary Agency Workers Directive

This law ensures that temporary workers who have been sourced through an agency receive the same pay and overall conditions of fulltime employees for doing the same work and hours. “The most likely contender for complete revocation is the Agency Workers Regulations 2010. These are unwieldy, unpopular with business and not noticeably popular with workers either,” James writes.

Transfer of undertaking

“This piece of legislation protects employees’ rights connected to their contracts of employment when there has been a transfer of undertakings or a service provision change,” writes Jane. Davies writes that although TUPE can attract a bad press, the principle that employees should transfer when a business changes hands or is contracted out is often useful for business and is incorporated and priced into many commercial outsourcing agreements. “For this reason, although there may be some businesses that would like to get rid of TUPE, it seems more likely that the government would make some small changes to make it more business friendly, such as permitting the harmonisation of terms following a TUPE transfer,” reads a statement from his article in the Lewis Silkin journal.


The reality is that it is impossible to determine with 100 percent certainty what the future of UK employment laws will look like until the government officially declares Britain’s exit from the UK. Jane concludes, “In general there may not be radical changes for businesses in the short term but they will need to keep updated to ensure they comply with the ever changing landscape.”


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