Nobody knows for sure what the full implications of Britain’s decision to leave the EU will be. However, for you as an employer, it’s likely that not much will change.
Why won’t much change?
Although there was a lot of talk about the red tape and regulations that emanated from Brussels, the reality is that most of these new laws simply reflect accepted standards of employment. In other words, the British Government would probably have introduced those laws anyway.
For example, the following rights were all brought in (or at least updated) because of European laws :
- The right to paid holiday
- Protection for pregnant woment
- Other anti-discrimination rights, such as the right not to be treated less favourably because of a disability, racial background or gender
For a more comprehensive list of the rights brought in by the EU, flick through the slides below.
Realistically, it’s unlikely that any government will abolish those rights (and most employers wouldn’t expect them to anyway).
In some areas of employment law, the UK government has given employees more rights than European legislation requires. For example:
- European law only provides employees with 4 weeks’ paid holiday per year – UK law gives 5.6 weeks.
- European law doesn’t require member states to have a law protecting employees from unfair dismissal – UK law does.
So, we mustn’t blame the EU for all the red tape (also known as employment rights). The CBI has commented that businesses recognise the value of a framework of basic rights for employees because such regulations help the UK’s labour market function effectively.
So, will anything change for employers?
I would expect there to be some slight changes to the following areas of employment law.
Calculation of Holiday Pay
The correct way to calculate holiday pay is in a bit of a mess at the moment, due to a mixture of decisions from various courts (including European courts). Even now, certain decisions are being appealed.
The European Court of Justice has said that employers must include the following when calculating holiday pay:
- Commission earned in the 12 weeks leading up to the start of the holiday period
- Overtime during that period.
This has led to some employees deliberately taking holiday immediately after the period when the receive most commission and work the most overtime.
It is likely that the law will change so that employees only receive basic salary for holiday periods.
The rights of migrant workers
Leaving the EU will mean that overseas nationals no longer have the automatic right to work in Britain. However, it’s unlikely that any British government would want to send such a large section of the workforce back to their home country.
They will probably be given the right to remain, at least in the short to medium term. After that, any immigration controls would probably allow overseas workers to work in the UK where there are shortages or where they have the right skills.
What should you do?
Don’t do anything yet.
Remember, it’s likely to be another two years before Britain formally leaves the EU. Nothing has changed yet.
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