4th August 2016
Honouring their manifesto commitment, the Conservative party called a referendum on the UK’s membership of the European Union and after 40 years the British public voted to leave the EU. David Cameron confirmed that he would step down and following a swift end to the leadership campaign, Theresa May took over as Prime Minister and began appointing a new cabinet. But apart from political change and reorganisation, what impact is Brexit likely to have on UK employment law?
As a result of Brexit, the UK will have the opportunity to amend or repeal EU based legislation. However, widespread repeal is unlikely, since much of the employment legislation derived from EU law is popular with both employers and employees.
Similarly, newly appointed Secretary of State for Exiting the EU David Davis has given a strong indication that existing employment law is unlikely to undergo radical change. Whilst he has suggested that certain aspects of EU regulation affected Britain’s ability to compete on a global scale, he clarified that he was not referring specifically to employment regulation. He went on to comment: “All the empirical studies show that it is not employment regulation that stultifies economic growth, but all the other market-related regulations, many of them wholly unnecessary. Britain has a relatively flexible workforce, and so long as the employment law environment stays reasonably stable it should not be a problem for business.”
Nonetheless, whilst there is unlikely to be a wide scale change to existing employment law in light of the Brexit, the effect on EU workers remains considerably less certain. The current system for non-EU based immigration requires employers wishing to employ non-EU nationals to become sponsorship licence holders. An employer is thereby able to sponsor a worker to carry out certain skilled roles which are paid a minimum salary level. However, industries which rely most heavily on EU workers, such as agriculture and food, often offer less skilled or seasonal positions. As a result, current EU workers may struggle to secure sponsorship for these kinds of positions under the existing sponsorship system.
Both EU workers and their employers are therefore likely to be feeling uncertain and there may not be any clear policy on the status of EU workers until Article 50 is invoked. This seems unlikely until the details of various trade deals have been negotiated.
Nonetheless, if you employ a large number of workers from the EU it would be sensible to start considering the impact of any changes as soon as soon as possible. We would advise carrying out an audit on your existing employees to establish how many are likely to be affected, and to consider the possibility of sponsorship applications in respect of these employees.
We will continue to keep you updated of any changes made or suggested in the wake of the Brexit.