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Brexit and employment law – what is expected?

Brexit and employment law what is expected

23 December 2016

Architect employers and their staff have been regarding Brexit with some trepidation, but with different concerns. Many employers, and naturally any EU staff they employ, want to know what will be the effect on immigration and employment rights, while salaried staff members are more likely to be concerned that a bonfire of employment protection law could be in the offing.

Rachel Lewis, a specialist in employment law and partner at independent law firm Farrer & Co, says the immediate outlook is that things are likely to remain pretty much as they are, at least until the UK actually exits the EU, most likely in the spring/summer of 2019.

And thereafter there is likely to be little immediate impact on employment rights, as the government is expected to transpose existing EU law into UK law upon Brexit to prevent legal vacuums being created.

Thereafter, much will be dictated by the political landscape at the time. It may be that there will be a gradual reshaping of employment rights, although Rachel suggests that early action is likely to be limited to elements that have been particularly unpopular in the UK, or which seem to represent easy wins for the government at the time.

Possible candidates include aspects of the working time regulations (eg in relation to holiday pay calculations and working hours), and a return to more reliance on businesses’ own flexible working arrangements. It may well also be that without the protection of European law, uncapped damages for discrimination claims also become a thing of the past, which could bring down employers’ bills. The regulations in relation to agency workers may well also be ripe for amendment or even repeal, as could aspects of the transfer of undertakings regulations, particularly as they relate to harmonisation of terms.

But Rachel cautions that it is all crystal ball gazing at the moment, as no one can be sure how the Brexit and post-Brexit situation will evolve.

Rachel Lewis navigating Brexit implications at Guerrilla Tactics CPD Day 2016

Immigration is another obvious area of uncertainty. Will workers from the EU be put on the same footing as non-EU workers? What happens to those who are already working in the UK? It is hard to know quite what will happen here, not least since trade deals with Europe may well have as a requirement the continued free movement of EU workers.

EU staff members who have lived in the UK for less than five years might want to consider applying for an EU registration card, which would serve to demonstrate the date they are recognised as having been in the UK. While such a card doesn’t confer any additional rights or benefits, it is possible that post-April 2019, if there is a new visa regime in place for EU nationals, those who have an EU card or certificate may (and it is only that) be exempt from needing to apply.

Those EU workers who have been in the UK for five years or more will be able to apply for permanent resident status, and after six years will be able to apply for British citizenship – though this is a more protracted process.

Legally, how is the process likely to unfold?

UK primary legislation will continue to stand after Brexit. EU derived rights set out in secondary legislation implemented under the European Communities Act 1972 would fall away – but are likely to be preserved, in the first instance, by the Great Repeal Bill (Act). This will repeal the European Communities Act, but preserve the regulations made under it. That leaves the government able over time to amend the European rights transposed into UK law as at the date we leave the EU. Current indications are that amending employment legislation is unlikely to be at the top of the government’s list of things to change when Brexit happens.

What about European case law? Where changes will start to be felt is in the area of judicial interpretation. At the moment, UK courts are bound by judgments stemming from the European Court and have to interpret UK cases in line with those judgments. Post-Brexit it is hard to see how the UK would continue to be bound by these ECJ judgements, unless they themselves have been transposed into UK law,’ Rachel offers.

There are also important areas in UK employment rights that have not been driven by the EU, she points out. UK paternity provisions, for instance, already go beyond EU requirements. Unfair dismissal law is not underpinned by Europe, and discrimination law, while heavily influenced by European judgments and directives, is of itself part of UK primary legislation, via the Equality Act.

As the situation evolves, the general direction of travel is likely to be towards greater flexibility that for the architectural profession would most likely find expression in a practice’s own employment guidance and good practice policies, with some firms choosing to be more generous and attractive to potential employees than others.

Small practices inevitably have greater difficulty financing some employment rights, particularly maternity rights for the smallest of practices.

One of the opportunities that could arise from Brexit could be the introduction of some exemptions in UK legislation in favour of small businesses, in recognition of the heavier burden that employee benefits can place on them. Any such moves are likely to find widespread support among the small business community, but once again this remains crystal ball gazing for the time being, Rachel cautions.

With thanks to Rachel Lewis, partner at Farrer & Co, who gave a presentation ‘Brexit, You and Your Employees: What you need to know about the impact of Brexit on your practice’ on CPD day at the RIBA Guerrilla Tactics event on 9 November 2016.

Text by Neal Morris, © RIBA

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