What Does the EU Referendum Result Mean for Employers?

Significant and wide-ranging change is the likely long term outcome of last week’s vote to leave the European Union – but the consensus view is that, in the short term, it is ‘business as usual.’

It may be several months before clarity emerges about how the relationship between the EU and the UK will continue and how that will affect the legal framework surrounding employment issues.

The UK has been a member of the EU for over 40 years, and during this time, domestic and EU laws have become intertwined. Many laws which came into being as purely domestic rights are now interpreted in line with EU legislative principles. Meanwhile, certain employment rights, such as the right to join a trade union, are protected by this country’s status as a signatory to the European Convention on Human Rights, rather than by its membership of the EU. Such rights are unaffected by the referendum decision.

Transfer of Undertaking (Protection of Employment) Regulations, also known as TUPE, dismissals, the ability to harmonise terms and conditions after a transfer, a potential cap on discrimination awards, and calculation of holiday pay have already been cited as prime candidates for reform.

Uncertainty before the referendum had already affected the jobs market

A survey ahead of the referendum by recruitment company Reed suggested that more than half (55%) of employers thought a Brexit would put jobs at risk, and the Recruitment and Employment Confederation’s (REC) Report on Jobs indicated a growth in temporary contracts compared to permanent hires.

The decision to leave the EU means many employers with EU workers, or those who have offices in EU countries, potentially face the introduction of costly new policies, as well as major changes to the way the UK reacts to European court decisions in employment cases.

The Leave vote will also likely affect hiring intentions over the coming months as employers take a “wait and see” approach on what future migration policies might look like.

An Institute of Directors (IoD) survey of 1,000 of its members suggests that a quarter of employers plan to freeze recruitment. The results of its poll suggest that almost a third would keep hiring at the same pace, with 5% planning to cut jobs. Almost two-thirds said the vote was negative for their business.

“Many of our members are feeling anxious . . . A majority of business leaders think the vote for Brexit is bad for them, and as a result plans for investment and hiring are being put on hold or scaled back,” said Simon Walker, director-general of the IoD.

Women may suffer without EU employment protections

It has been suggested that last week’s vote to leave the EU will see women bearing a disproportionate share of the burden of change as their rights and protections hinge on a UK which is being cut loose from a progressive legislative culture.

Writing in the Daily Telegraph, Caroline Criado-Perez outlined the many steps toward gender justice the EU has fomented in the UK over the last four decades. In matters of employment rights, sexual harassment, and equal pay, the EU has repeatedly prodded the UK to do better by its women: once the UK is no longer subject to the broader protections the EU requires, women may see a clawback on issues integral to their prosperity and fair treatment, she suggests.

Employment

Our experienced employment lawyers provide advice on the employment aspects of all major business decisions. Find out how we can protect your business and your reputation as a fair employer by calling us on 01895 207892. Alternatively email your details to employment@ibblaw.co.uk.