While the dust settles on the referendum result, it is worth considering changes that the UK might make to its employment law framework if it is no longer bound by European directives and regulations after Brexit.
Working Time Regulations
The UK’s law on holiday pay, breaks from work and the maximum working week arise from the European Working Time Directive. UK workers are unlikely to lose their right to 5.6 weeks’ paid holiday each year. However, recent cases arising from European law have seen the amount of holiday pay employers have to pay increase to include commission and overtime, for instance. A government unbound by European Court of Justice decisions might legislate that only basic pay needs to be paid when a worker takes leave.
The right to accrue entitlement to annual leave when a worker is on long-term sick might be removed or limited to reduce the burden on employers and possibly lead to fewer dismissals by removing the cost implications of keeping a sick employee ‘on the books’.
The limit of a 48-hour maximum working week might also be removed and the rights to breaks and time off work could be given more flexibility.
Collective redundancy consultation
The obligation to consult where 20 or more employees are dismissed for reason of redundancy may well be removed. These rights, unpopular with employers, have already been the subject of consultation, a reduction in obligations in recent years and also the subject of much litigation (the Woolworths case, for instance). A change to a requirement to consult being triggered only where 100 or more employees are to be dismissed for reason of redundancy is also possible.
Employee rights under TUPE (Transfer of Undertakings Protection of Employment) Regulations 2006 are unlikely to be abolished as they have become entrenched in UK employment rights and arguably can assist where services transfer. However, there could be legislation to make it easier to harmonise terms and conditions after the transfer, which a European decision currently prohibits. There may also be a softening of the penalties for employers who fail to inform and consult fully about changes (currently up to 13 weeks’ pay for each affected employee).
At least some of the UK’s discrimination law arose from domestic legislation, rather than being imposed by European directives (equal pay and disability discrimination for instance). It is unlikely that a post-Brexit government would look to remove the right not to be discriminated against for the existing protected characteristics (age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, and sexual orientation).
However, there is currently no limit to the amount of compensation that can be awarded in discrimination cases, arising from a European directive that requires member states to provide “real and effective compensation or reparation […] for the loss and damage sustained […] as a result of discrimination”. This could be subject to a statutory cap, as unfair dismissal compensation is.
The reality is that we do not know how the referendum decision will affect the UK and employment legislation in particular. However, as and when (or should it be if?) we leave Europe, it would seem likely that some diminution of workers’ rights would follow, affording employers increased flexibility to manage their workforce.