Brexit, what it might mean for business

 I am often asked what Brexit will look like for Businesses and their employees. Whilst the government remains reluctant to set out its plans it is difficult to say  with any certainty what will happen. A large part of the employment laws come from the EU and these could be repealed in part or whole. I think that this is unlikely to happen as we are looking to remain a significant partner with the EU and so they are likely to stipulate that we maintain and even taken on new employment laws that emanate from the EU.
There are various reasons for this:
  • Some EU employment laws merely subsumed protections that were already provided by UK law. For example, UK equal pay, race and disability discrimination laws preceded EU anti-discrimination obligations. Similarly, there was a UK right of return from maternity leave before EU maternity leave rights were implemented. It is not likely that the government would want to row back on these protections.
  • Even if there was not a pre-existing UK right, would the government repeal such employment protection? Much employment law, such as family leave, discrimination rights and even the right to paid holiday is regarded by both employers and employees as a good thing. Indeed, UK family leave rights go further than the EU requires.
  • An even more compelling reason for the UK to continue to observe EU law is the need to stay in a relationship with the EU. The price of a trade agreement with the EU is likely to be adherence to a certain amount of EU employment and social protection.
Removing or amending EU laws is a long process and will take us past the 2 year exit period once we sign Article 50.  The government could  gradually repeal EU-derived employment laws, or, as is perhaps more likely, modify them to make them more palatable to UK businesses.


Discrimination law

. It is difficult to imagine many employers arguing that they should be free to discriminate on any of the protected grounds. So any change to the existing regime governing direct discrimination, indirect discrimination and harassment also seems unlikely. Some commentators have suggested that, free from EU constraints, a cap could be imposed on discrimination compensation similar to that for unfair dismissal. Another possibility is that the government could change the law to allow positive discrimination in favour of under-represented groups in a way that is not currently permissible under EU law.

Parental leave and pay

UK maternity leave and pay and are more generous than EU rights in some respects. The  right to shared parental leave and the right to request flexible working are purely UK law. Accordingly, although some critics consider these rights to be a burden on business, there seems little political appetite for their repeal or even for watering them down.


These can cause businesses a lot of problems but the principle that employees in a transferred business or undertaking should transfer with it is also often useful for businesses and is incorporated and priced into many commercial outsourcing agreements. It seems more likely that, following Brexit, the government would make small changes to make it more business friendly. For example, it might choose to make it easier to harmonize terms following a TUPE transfer. This would be a step I would favour.

Holidays and working time

The right to statutory paid holiday is now well established and it would be deeply unpopular with workers and trade unions if it was removed. This right is also now broadly accepted by most employers. For these reasons, a wholesale repeal of the Working Time Regulationsis unlikely. However, there are aspects of the right to paid holiday and other rights under the WTR that the government may want to amend for example the right to keep accruing holiday while on sick leave and  that holiday pay should be based on all aspects of remuneration, not just basic pay. Following Brexit, the government may want to retain a right to paid holiday based on basic pay and with limited rights to accrue and carry it over into new holiday years. The UK may also wish to remove the cap on maximum weekly working hours under the WTR. It is less clear whether there is a demand to limit the rights to other rest breaks or the protections for night workers contained in the WTR.

Agency workers

The most obvious candidate for complete revocation is the Agency Workers Regulations 2010  which are complex, unpopular with businesses and have not yet become embedded in a way that might make them politically difficult to remove.

Data Protection

It seems unlikely that the UK would repeal or significantly modify the Data Protection laws as they stand. If UK businesses want to operate in the EU  they will have to transfer personal data between the UK and EU member states and there will need to be adequate protections equivalent to the current ones.  If the UK does decide to abide by the EU regime, it will have to update the DPA 1998 to take account of the new General Data Protection Regulation, which is due to be implemented in 2018.


Freedom of movement

This is the hot topic.
There are currently large numbers of UK nationals living and working in other EU countries and many nationals of other EU member states living and working in the UK. Following Brexit, these individuals would no longer have the automatic right to do this.
It would not seem to be in anyone’s interests ) to require them to return to their country of origin. It therefore seems likely that the UK government would agree an amnesty, whereby existing EU migrants could stay (at least for a reasonable period) in return for permission for UK citizens abroad to remain where they are. In the medium term, these individuals could be given sufficient time to obtain citizenship of the country in which they are residing and to return home if they fail to do so. The UK could introduce an immigration system similar to the current system for non-EU citizens, whereby skilled workers and students can gain permission to stay for a limited period. This would presumably help to reduce immigration to the UK from its current historically high levels . However UK businesses may have issues if they are banned from recruiting labour they are used to accessing from the EU. One of the key questions is whether the UK will be able to negotiate a trade agreement with the EU without agreeing to the free movement of persons, as this is regarded as fundamental by EU states such as France and Germany.


Transitioning from the EU

The government would not want employers to have to deal with an avalanche of legal changes and so is likely  to take a piecemeal approach, keeping the majority of EU employment law but with minor modifications.
The domestic issues that might make some changes more politically difficult to effect than others have been considered above, but there are also other political realities at play. The UK is likely to want an ongoing trade relationship with the EU, which is its biggest export market. The price of a free trade agreement with the EU may well be acceptance of EU social and employment regulation. This is the case, for example, for the non-EU members of the European Economic Area (EEA), such as Norway. Such states are obliged to accept most of EU employment law without being part of the EU decision-making process.
Ultimately, it seems unlikely that UK employment law will be transformed in significant ways, particularly in the short term.

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