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By Euan Smith, Associate

Background

While it only seems like the other week that we were deciding whether Scotland should remain in the UK, on 23 June, we will be deciding whether the UK should remain in the EU.  
 
Earlier this year David Cameron argued he had achieved success in agreeing a deal for the UK’s position within the EU to be adjusted in certain respects.  Broadly speaking, the areas forming the subject of the deal were; economic governance, competitiveness, immigration and sovereignty. 
However, this hasn’t stopped many pro exit campaigners (including those in his own party) backing the Brexit cause. As many will know, a large proportion of current UK employment law comes from the EU including; discrimination rights, collective consultation obligations, Transfer of Undertakings regulation, family leave, Working Time Regulations and duties to agency workers.  In theory, if there was a vote to leave, the UK Government could repeal all of the relevant legislation in these areas.  Although this scenario is unlikely the current Government has sought to deregulate in a number of areas and many see changes in employment legislation as inevitable following any Brexit.  
 
The Trades Union Congress (TUC) has been so concerned about this prospect that it has commissioned a Barrister (Michael Ford - QC) to draft a legal opinion on the potential employment law consequences.  The opinion is 66 pages long and notes, within its summary, that “all the social rights in employment currently required by EU law would be potentially vulnerable”.  Whilst this does not necessarily mean that change will take place in all these areas, the following gives an idea of where such “vulnerability” might lie.
 

Discrimination Law

 
The Equality Act 2010, which implements the UK law on discrimination, is primary legislation which means it would remain in force even if the European Communities Act 1972 was repealed.  However, that does not mean that the Equality Act could not otherwise be repealed by government although such a radical step is unlikely.  What has been suggested is that, without EU constraints, a cap might be imposed on discrimination compensation similar to that for unfair dismissal.  Others have suggested that the government could change the law to allow positive discrimination, in favour of under-represented groups, in a way that is currently not allowed under EU law albeit.  However, the prospect of any UK Government adopting such radical policies would seem unlikely.
 

Holidays and Working Time

 
The right to statutory paid holiday is now well established and it would no doubt be deeply unpopular with workers and trade unions if it was removed.  However, the government may wish to address certain aspects of the right to paid holiday and other rights flowing from the Working Time Directive.  In particular, decisions surrounding accruing holidays while on sick leave and holiday pay being based on all aspects of remuneration (not just basic pay) have proved unpopular with businesses.  A government free from EU constraints may well wish to focus on such issues and thereby elicit increased business support.  David Cameron has previously indicated reform of the Working Time Directive was a pressing objective meaning a leave vote could also result in changes, for example, to the limit on maximum working hours.
 
Agency Workers
 
It also seems generally accepted that the most obvious candidate for complete revocation could be the Agency Workers Regulations 2010.  The rights of such staff to; collective facilities, amenities and information on vacancies has not been welcomed with open arms by many business focussed interest groups.  The additional rights (after 12 weeks) to the same basic working and employment conditions, as those employed directly, has proved even more unpopular with many businesses complaining of additional costs and reduced flexibility.  Whilst there is no doubt that agency workers, and those businesses involved in placing them, do perform a vital role these increased rights would no doubt be under threat.
 

Freedom of Movement

 
The issue of Freedom of Movement and the implication for the control of immigration is a fundamental question for many supporters of Brexit.  There are, of course, many nationals of other EU member states living and working in the UK.  If the UK were to leave the EU, these individuals would no longer have the automatic right to do so.  Brexit campaigners do seem to place less emphasis on the large numbers of UK nationals living and working in other EU countries.  Some have suggested that the Government would negotiate an amnesty whereby EU migrants could stay in the UK, at least for a reasonable period, in return for UK citizens being able to remain where they are.  The UK might then introduce an immigration system for ‘new’ EU migrants, similar to that which operates for non-EU citizens.  While this would no doubt reduce immigration it would not necessarily prove popular with businesses and many public sector employers, many of whom rely heavily on freedom of movement to have a full and appropriately skilled workforce.  It has also been pointed out that, if the UK is to achieve a suitable trade agreement with the EU (upon any exit), it might be compelled to accept freedom of movement as part of that deal.  
 

Summary

 
Whilst the degree of deregulation taking place, under the current government (and the previous coalition government), is perhaps open to debate we have certainly seen significant changes in employment law over recent years. Foremost amongst these has been the increase in the qualifying period for unfair dismissal claims and the introduction of Employment Tribunal fees.  These changes could certainly be said to favour business and it would seem realistic to expect further modifications in a similar direction, if the UK is no longer bound by EU law.  Any change is, however, likely to be a slow process and 2 years’ notice is required for member states wishing to leave the EU.  There is also no guarantee the current Government, apparently significantly riven by internal dispute over EU membership, will be elected for a further term.  It is also clear that, whatever changes any government might wish to make, they will have to take account of practical realities such as the constraints of newly negotiated trade deals and any pressure exerted by various external interest groups.  That said, we are perhaps now seeing greater clarity as regards plans (for example) for any trade deal as the true implications of a Brexit become more apparent.  Given that the momentous vote is now some 8 weeks away this is not before time.

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