In the period leading up to the UK Government’s negotiations with Brussels last year, there was much speculation that one of the priorities in the UK’s bargaining agenda would be an opt-out from some EU employment law (for example, in relation to the Working Time Directive). However, this theme slipped off the negotiating table during 2015.
The CIPD will only ever take a position on any election or referendum if there is strong evidence that a particular outcome would clearly and directly affect our purpose of championing better work and working lives. In the current in/out debate there are simply too many uncertainties that will not be clear until after the result of the referendum, and potentially sometime after then. We can, however, talk about how the world of work might be affected, and one of the issues of most relevance to HR and people development professionals that could be affected by a ‘leave’ vote is employment law.
EU-derived employment regulation
A significant body of employment law in the UK derives from the EU, and over the past decades this has affected workers’ rights across the economy. For individual rights the main areas include working time and annual holidays, rights for women [e.g. equal pay], family friendly policies [e.g. pregnant workers, parental leave etc.], anti-discrimination legislation [e.g. equal treatment] and atypical workers [e.g. agency workers]. For collective rights, the main legislative areas relate to collective redundancies and TUPE, European Works Councils, and information and consultation.
Typically, European law is initiated in Brussels through directives and, once agreed, transposed into national legislation across all of the member states. EU-derived law has been incorporated into UK law using a range of legal approaches including secondary legislation under the European Communities Act 1972 (eg TUPE) as well as through acts of Parliament (for example, the Equality Act).
What would happen if there was a ‘leave’ vote?
A vote to leave the EU could, in theory, allow the review or repeal of legislation that came out of EU directives, although this would depend on the terms of any future relationship between the EU and the UK. There may well be practical difficulties associated with any attempt to disentangle EU-derived law, especially where case law has drawn on domestic courts’ interpretation of EU Directives and on ECJ rulings. There could also be questions about the desirability of such an exercise in areas where EU-derived legislation is regarded as beneficial.
An article on the CIPD’s HR-inform site by Anthony Fincham (partner and head of employment at CMS Cameron McKenna LLP) says that the UK ‘would be sailing into unchartered waters if it were to leave the European Union, including in the area of employment law’. The author points to the ‘whole swathe of national employment legislation that incorporate EU rights and principles that will remain unaffected by Brexit unless, and until, these laws are repealed.’ He makes the point that a UK Government would be unlikely to remove protections in the workplace against discrimination, or scrap the principle of equal pay, as its own legislation pre-dates the UK joining the EU.
Analysis by legal experts Lewis Silkin concludes that very little would change: EU-derived law is so embedded in UK law that it would be very complex to unpick, and would typically require new legislation. To some extent, what happens to UK employment law ‘will depend upon how the Government tries to extricate itself from the EU’, says the article: European law has been incorporated into UK law in a number of ways including secondary legislation, which are regulations introduced under powers granted by the European Communities Act 1972 (the statute enacted to incorporate EU law). Other UK implementing legislation, such as the Equality Act is primary legislation, so an act of Parliament itself. ‘If the Government simply repealed the European Communities Act, those regulations passed under it like TUPE would probably fall away’ says Lewis Silkin, while freestanding acts of Parliament, such as the Equality Act, would remain in force. ‘A more realistic approach following an exit from the EU would be to maintain the status quo and start addressing particular laws individually over time; this could be by repealing them or merely tinkering’ say the authors.
There is also the important question of case law, and what would happen to precedents already set by the Court of Justice of the European Union (CJEU) and European Court of Justice (ECJ). In the view of Lewis Silkin:
‘On leaving the EU, the ECJ would no longer have jurisdiction and its future decisions would not be binding on UK courts. It seems likely, however, that if we retain any laws originating from the EU (which is probable) our courts would still take account of future ECJ judgments as persuasive, albeit not binding, when ruling on those laws. In that case, the ECJ would continue to exert an appreciable influence.’
Another perspective to bear in mind regarding the effect of a ‘leave’ vote leave on UK employment law relates to the negotiation of any future trading agreement with the EU. For example, countries such as Switzerland and Norway, which are not part of the EU, have trade agreements with the EU which involve adherence to substantial amounts of EU-derived employment law.
Rachel Suff is a Public Policy Adviser (Employment Relations) at CIPD
The IPA published a report examining how the EU has influenced rights at work in the UK. You can download the report on our website – www.ipa-involve.com