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What the ‘leave’ vote means for employment law

Updated: Jun 14, 2022

On 23 June the UK voted in the EU Referendum to leave the European Union. While it’s not clear yet how, when or what amendments will be made to workplace law, it is possible to predict those areas that are the most likely to change.

Withdrawal process The process for leaving will be triggered by a ‘withdrawal notice’ (Article 50). The UK has a maximum of two years in which to negotiate the terms of its withdrawal, which then has to be ratified by the UK Parliament.

The UK’s exit does not mean that all EU-derived law will disappear overnight. Which laws are then altered will depend on those withdrawal terms, and the political will of the government in power, but most would need to be individually repealed or reformed. The following areas could see change:

Immigration: free movement Following the vote, the EU said the UK must continue to allow the free movement of EU workers if it wanted to trade with member states after its withdrawal. UK politicians have suggested that a points-based system could be used to govern EU migrants coming to the UK in the future.

The government has recently stated that it expects the legal status of EU nationals here, and UK nationals in member states, to be “properly protected” as a result of negotiations to leave the EU and that until the UK’s exit, there will be no change to the existing operation of the EU’s free movement rules.

These rules do not require EU nationals to register for any documentation, and the statement confirms that EU nationals automatically have permanent residence rights after five years in the UK, and have the option of applying for British citizenship after six years here.

Holidays/working time: opt-outs The UK’s statutory paid holidays (5.6 weeks) go beyond the EU minimum (20 days) and are unlikely to be repealed, but the government may wish to amend the rules on calculating holiday pay and on opting out of the 48-week.

Equality: compensation cap We may see a cap put on discrimination compensation but many equality laws (for example, those on sex, race and disability, and on equal pay) predate the UK joining the EU and are unlikely to be repealed.

Atypical workers: employment rights Protection for agency, part-time, and fixed-term workers derives from the EU, and the UK may wish to trim back the existing rules.

Transfer of Undertakings (Tupe) The UK’s transfer regulations exceed the requirements of the EU directive by including ‘service provision changes’. The block on harmonising terms and conditions following a Tupe transfer (which originates in EU case law) may come under scrutiny.

Data protection: new rules The EU General Data Protection Regulations 2016 have to be implemented in the UK by May 2018. Even if withdrawal is complete by that time, the UK will still need to comply with cross-border data protection laws if it wishes to keep its EU trading partners.

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