Brexit…hunkering down for the long haul…what we know so far

In 12 April 2016, in our article “The Great Brexit Debate: Protection for Workers” we shared our views on the potential impact of Britain’s exit from the European Union. Following the referendum, we have a clear mandate for exit. However, there is much doubt about what the future may look like for the UK and our relationship with Europe. It is likely that there will now be a prolonged transition period with the next government needing time to plan, prepare and negotiate the UK’s future.
Some key thoughts meanwhile:

  • The UK has a body of homegrown legislation protecting UK employment law rights. The fundamental right to claim unfair dismissal will not be affected by the withdrawal from Europe. The UK also had discrimination laws in place before its ascension to the EU.
  • EU aims and legislation are so established in our views of UK good employment practice that they are likely to remain fundamentally the same for now. Moving to a US-style system where employees receive lower overall protection is possible, but unlikely in the short term, given the broader cultural change needed to accept the US norms.
  • Trade and investment are good for employment growth and stability. The government will want to keep a level playing field with the UK’s European counterparts to ensure that vital relationships are maintained at this crucial time. One key area where it will want to display its good practice is in data protection. Realistically a single market deal may also mean the UK continuing to be subject to key EU legislation.
  • Subject to the above, eventually EU rights, or improvements of those rights, may reduce or end. We would not be surprised to see any reviews follow a similar format to the 2014 review of gold-plating of TUPE. Many will recall that in that case the government’s grand proposals were ultimately reduced to a few smaller, less significant changes. If the UK is not required to keep EU legislation in these areas as part of a broader deal, the government may review and make changes to the current position in a number of areas, such as: 1) harmonisation of terms following a TUPE transfer; 2) limits on bankers’ bonuses; 3) working time controls; 4) collective redundancy consultation; 5) agency workers’ rights; and 6) the absence of a cap on discrimination awards.
  • If the UK is not subject to the jurisdiction of the European Court of Justice, we may see our case law develop in a slightly different direction. This may mean a gradual parting of ways.

Imposing limits in the free movement of labour could make the UK a much less attractive destination for international businesses and skilled and educated migrants.
On balance, it is most likely that a future government will want to preserve the status quo at least in the short term. It is likely to look for opportunities for more fundamental and valuable changes as the dust settles.

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Michelle Lamb

About Michelle Lamb

Michelle is a senior associate in the Employment team. She advises public and private employers on all aspects of contentious and non-contentious employment law, but specializes in TUPE, change programs, employment aspects of corporate transactions and discrimination complaints. Michelle regularly procures advice from other jurisdictions to support Dentons' multinational client base.

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