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What Brexit could mean for UK businesses and their employees

It is impossible to predict exactly how a vote to leave the EU would impact the UK employment landscape

The fast-approaching EU referendum date has stirred much debate and discussion leaving UK industries keen to find out what a vote to leave could mean for them.

It’s rare that any new legislation affects both employers and employees in equal measure and, inevitably, a vote to leave would call into question many employment regulations which originated from the EU and have become workplace norms. These regulations have directed the employment landscape, and employers and employees alike have voiced concerns over what position they could be left in should the UK no longer be bound by EU regulations.

While the stay campaign continues to maintain a slight lead in recent polls, UK businesses cannot ignore the very real possibility of an EU exit.

It is impossible to predict exactly how a vote to leave the EU would impact the UK employment landscape, but what we do know is that the UK would follow one of two very distinct routes:

  1. Repeal all current EU laws and regulations and introduce entirely new structures.
  2. Keep the current EU laws and regulations in place and gradually repeal those which are less favourable.

Should the UK vote to leave the EU, it would have the freedom to impose any changes to employment law that it chooses. For staunch supporters of the leave campaign repealing all current EU laws and legislation holds a certain appeal, however commentators have suggested that the second option is most probable.

Regardless of which approach the UK takes, employers must consider how a vote to leave could affect the following areas:

 Working Time Regulations

The Working Time Regulations (1998) brought the European working time directive into UK law. This has long been a point of contention with many politicians campaigning for the UK to opt out. At present the working time directive influences UK weekly working hours, rest periods, paid annual leave and extra protection for night workers. It is difficult to say how each of these points would be affected in the event of a vote to leave however considering the UK’s history with these regulations, it is more than likely that they would be repealed and restructured beyond current recognition.

Agency Worker’s Rights (AWR)

Alongside Working Time Regulations, the almost universally unpopular AWR is expected to be high on the list of legislation to be amended should the UK vote to leave the EU. AWR was introduced to comply with the EU’s agency workers’ directive, providing temporary workers with the same basic rights as those on permanent contracts. It has been heavily criticised and it’s expected that it could be completely repealed.

Right to Work

Right to work checks are an important part of any employment process. Currently EU citizens have the same employment rights in the UK as UK nationals, – they are free to enter the country and find work –  whereas a non-EU citizen requires a work permit or visa in order to work in the UK.

Understandably this is an area of concern for EU nationals should the UK vote to leave the EU, with many questioning their future eligibility to work, or continue working, here in the UK. If the UK chooses to leave the EU but stay part of the European Economic Area (EEA), it is likely that EU nationals would retain their right to work in the UK. The UK would have the freedom to implement whatever it chooses, and could restrict the right to work in the UK for EU nationals.

On the other hand, a vote to leave the EU also calls into question the position of UK nationals living and working in Europe. A vote to leave would mean that the EU could also decide the terms on which it would allow British nationals to work in the EU. It is likely that the UK would adopt a similar approach to Switzerland and negotiate separate trade agreements allowing both UK and EU nationals to work flexibly.

Transfer of Undertakings (TUPE)

The service provision change element of TUPE is very much a British idea and regulations are not required by European law. The UK has gone further with TUPE since it was introduced and a vote to leave is unlikely to bring any changes.


Many UK regulations regarding discrimination derive from the EU. Should the UK vote to leave it is unlikely that there would be a major overhaul of any discrimination laws. If there were, the government could face serious backlash and uproar from across many businesses. Not only that, but there would also be wider social implications to consider if these laws were to be repealed.  When it comes to issues such as the gender pay gap, it is impossible to know how they would be shaped should the UK leave the EU, however they would probably remain as they are for the foreseeable future.

Unfair Dismissal and Tribunals

If the UK does vote to leave the EU, legislation relating to unfair dismissals and tribunals would almost certainly remain the same. Much of it did not originate from the EU, for example the fees system which was introduced to stop spurious claims.

Data Protection Act

While most Acts of Parliament are of British origin, the Data Protection Act came about from an EU law. This is another unknown area, and it is difficult to predict exactly how the Data Protection Act would be affected following a vote to leave. However, echoing the UK government’s approach to discrimination laws, it is unlikely that the Data Protection Act would be repealed as it would cause public outrage.

National Minimum Wage

The national minimum wage would not be affected. Similar systems across Europe are significantly lower than the UK national minimum wage and, as the current government recently introduced the National Living Wage, it is unlikely that this policy would change.

Should the UK vote to leave the EU, actually leaving would not be a quick process. Any transition would take considerable time to implement with a number of negotiations required to take place. Although a vote to leave would undeniably alter some aspects of the UK employment landscape, it is unlikely that we’d see any immediate change to UK businesses– and, at this point, it is impossible to say exactly how things might differ. However, we can safely assume that the UK government would not introduce any radical changes to current employment law, as the repercussions could result in legal and commercial chaos for UK businesses.

As we approach the referendum and the possibility the UK could vote to leave the EU becomes increasingly real, it is important that businesses are prepared for any changes that might come their way. If the UK did choose to repeal laws which originated from EU regulations, businesses must get up to speed quickly in order to comply c with any new legislation.

By Enrique Garcia of ELAS

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