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How will the decision to leave the European Union (EU) impact employment?

Published 04 July 2016

It remains unclear quite what the future holds for Britain and its employment practices after the vote to leave the European Union (1). Concerned business leaders have appealed for calm and more clarity about the process (2).

Taking the UK out of the EU is expected to take about two years after Article 50 is invoked, which is expected to follow a period of informal discussions (3). What is uncertain, and therefore cause for considerable concern, for both employers and employees is what will change? It is likely there will be an impact on a number of current laws, a few examples include:

Immigration

One of the big issues - and probably the most divisive - throughout referendum campaigning was immigration. The law surrounding unrestricted movement of EU nationals could change, and therefore restrict the candidate pool for employers (4).

Equality Rights

The laws protecting UK employees from discrimination were established before a requirement to adhere to EU law. Currently compensation awards for discrimination are uncapped, but a cap could be put in place in cases where there are successful claims for sex, race or disability discrimination. This was prevented by our membership of the EU and once the UK withdraws this is a matter which may be reviewed (5).

Holidays

The way holiday pay is calculated could also come under review, and whether it should include payment for overtime and commission is a matter likely to be considered. The maximum average working week of 48 hours and the rules on opting out may also come under scrutiny (6).

Data Protection

The UK’s current data protection law and practices take account of the EU General Data Protection Regulations. This is likely to be a troublesome issue as all member states – including the UK – must change their laws by May 2018 to comply with the regulation (7), but if Britain leaves prior to the deadline it will not have to make the changes.

This could impact on trade with member states who may have legitimate concerns in relation to protection of their data.

What is certain, is that there are uncertain times ahead for employers, who will need to plan carefully for the future and what may well be the significant changes ahead (8).

References:

  1. Brexit Bedlam: U.K. Ponders Uncertain Future After Historic “Leave” Vote [Internet]. [cited 2016 Jul 4]. Available from: http://www.huffingtonpost.com/entry/uk-ponders-uncertain-future-after-historic-leave-vote_us_5770338ce4b0dbb1bbbae9f9
  2. Business leaders lash out at government’s lack of Brexit plans | City A.M. [Internet]. [cited 2016 Jul 4]. Available from: http://www.cityam.com/244389/business-leaders-voice-concerns-over-governments-post
  3. Parker G. Brexit: How long would Britain take to leave? Financial Times [Internet]. 2016 Jun 7 [cited 2016 Jul 4]; Available from: http://www.ft.com/cms/s/2/b296fa42-2bd4-11e6-bf8d-26294ad519fc.html#axzz4DRDsOqCK
  4. EU referendum: What will happen to UK immigration if there’s Brexit? | UK Politics | News | The Independent [Internet]. [cited 2016 Jul 4]. Available from: http://www.independent.co.uk/news/uk/politics/brexit-eu-referendum-uk-immigration-statistics-freedom-of-movement-a7044041.html
  5. Brexit – employment law and HR implications [Internet]. [cited 2016 Jul 4]. Available from: http://united-kingdom.taylorwessing.com/download/article-brexit-employment-law.html
  6. Millions of UK workers could lose holiday pay if Britain leaves EU, unions warn | UK Politics | News | The Independent [Internet]. [cited 2016 Jul 4]. Available from: http://www.independent.co.uk/news/uk/politics/eu-referendum-millions-of-uk-workers-could-lose-holiday-pay-if-britain-leaves-eu-unions-warn-a6980541.html
  7. Reform of EU data protection rules - European Commission [Internet]. [cited 2016 Jul 4]. Available from: http://ec.europa.eu/justice/data-protection/reform/index_en.htm
  8. Osborne Clarke – an International Legal Practice: Data protection and privacy: legal implications of Brexit for your business [Internet]. [cited 2016 Jul 4]. Available from: http://www.osborneclarke.com/connected-insights/blog/data-protection-and-privacy-legal-implications-brexit-your-business/

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