How will employment law be affected in the wake of Brexit?

In the wake of the UK’s decision to leave the EU, SMEs across the country are facing uncertainty across several areas of the day-to-day running of their businesses – for example, how will employment law be affected?

Multinational law firm Gowling WLG’s employment partner Martin Chitty claims that in the very short term, there will be no change at all, as “we have not left, there is no brave new world. But one is or may be on its way.”

Chitty says there are three areas to consider:

  • Rights with no EU element, such as unfair dismissal, discrimination on pay, sex, race, marriage, ethnicity and nationality. Nothing will happen in these areas
  • Rights which are EU-based and enacted in the UK, which are unlikely to be repealed, although they may be watered down
  • Rights that are EU-based which are on the endangered list despite being enshrined in UK law.

“The issue here is going to be about the reforming zeal and position of the post-Brexit government,” says Chitty. “How far would they go, and how fast?”

Some examples of laws we could see changes to:

Most of the Working Time Regulations – the EU obligation on holiday pay is exceeded by what we have done so that is unlikely to be repealed. What may well go is holiday pay at above basic rate; mandatory rest periods; cap on working week; paid waiting/on call.

Agency Workers – the Regulations require equality of treatment after 12 weeks. This law is very vulnerable indeed.

State-funded underpin on insolvency – when a business goes bust, staff get minimum cover for eight weeks salary and various accrued rights. It could all go because it is very expensive to fund.

Unlimited compensation for all forms of discrimination – might we go back to capped claims?

TUPE – TUPE moves any employees and any liabilities associated with them from the old employer to the new employer in the event of a business takeover. If not repealed entirely, then it is open to change.