Brexit Reality - What will the leave decision mean for employers?

Published: 27th June 2016

Overseas workers

The biggest impact is likely to be the employment of workers from outside the UK.  Many organisations, including our National Health Service, depend on “immigrants” to provide adequate staffing.  Additional regulations may well make it more difficult to employ overseas workers and being outside the EU will make the UK less attractive for many.  While any new rules will take time to implement, we may see individuals deciding to leave the UK, so businesses should start to look at their workforce and to make contingency plans. 

Working Time

The Working Time Directive is a key piece of legislation emanating from the EU.  This governs daily working time, breaks and holidays.  The UK already has an opt-out from the 48 hour working week and choose to set the statutory holiday allowances at 28 days, above the minimum 20 days required by the EU.  We are therefore unlikely to see any significant changes here, although there will be less impact from European Court rulings such as the recent decision requiring overtime to be included in the calculation of holiday pay.

National Minimum Wage and Pensions Auto-enrolment

The introduction of the National Living Wage and Pensions Auto-enrolment are two key issues that have increased costs for employers.  However, both minimum wage and pensions legislation were introduced by the UK government without the involvement of the EU.  It is unlikely, therefore, that we will see a reduction in wage costs as a result of Brexit.

Agency Worker Regulations

The UK was required to implement these regulations under the EU Temporary Agency Workers Directive.  They have proved unpopular with employers and have resulted in many organisations restricting the use of agency workers to a maximum of 12 weeks.   This is unlikely to be beneficial for employers or workers and may be a prime target for abolition.

Consultation of Employees

The requirement to consult with employees in general, as well as in specific situations such as redundancy and TUPE, are rooted in EU law.  While the requirement is unlikely to go away, there could be changes to make the process less onerous for employers.

Maternity, Paternity and Parental Leave

While the EU provides a framework for family policies, the UK has built on these to meet the requirements of our own labour market.  For example, the recent introduction of Shared Parental Leave was purely a UK initiative.  We are therefore unlikely to see any rolling back of these regulations.

Health and Safety

The UK has always led the way in Health and Safety, resulting in a significant decrease in workplace injuries and fatalities.  So despite the cries of “Health and safety gone mad” and the perception of EU interference, it is unlikely that the UK would want to reduce their commitment in this area.  Our position is echoed by IOSH, who’s head of policy and public affairs Richard Jones, has said: “Post-Brexit, the UK now has less influence over EU law. Now we’re exiting, it’s vital the UK continues to apply our successful risk-based health and safety system, which includes laws from EU directives, because it’s been found to be fit for purpose by several independent reviews and is respected and imitated across the world.”

 

These are uncertain times and no-one fully knows the impact of our departure from the EU.  The UK government has many more pressing challenges to address in the short time, so employment legislation is likely to be a long way down the list of priorities.  At the very minimum, we will bound by EU legislation for the 2 year negotiation period which gives employers a good opportunity to weigh up their own position.