Posted on by Matthew Kingham - Selima Designer

Brexit; should I stay or should I go?

Since Prime Minister David Cameron announced that there should be an EU referendum odds of the UK saying ‘Adios’ to being part of the European Union have risen, but what does this mean for employment law?

Of course one of the main advantages of staying in the EU would be that we would maintain being part of a single economic market preventing disruption to a trade flow which the British Economy arguably depends on.  As statistics show that in 2014 over half of the UK’s trade was with Europe. New negotiations would have to be made with not only the EU itself but non EU countries such as the US, China and India.

From a regulatory perspective many of the UK’s current laws are derived from EU legislations. Leaving the EU could therefore precipitate workplace change that may result in the introduction of completely new employment laws and regulations.

It would then rely on organisations such as Trade Unions and opposition parties to oppose any new proposals that are likely to inflict existing employment rights.

Conservative MP’s have already implied that employment laws such as maternity rights and working time are to be top of the renegotiations. Although it is unlikely that these changes would have an immediate effect on HR they would certainly be substantial contributors to a huge shift in HR world.

For Britain to prosper more outside the EU than it did as a member, some of the following four conditions have to be met.

The UK immigration crisis is one of the key factors contributing to the vote out of the EU. Therefore UK border control will need to be a top priority if it so happens we leave. However enforcing border control to such an extent will mean that immigration policies can no longer discriminate in favour of EU residents. Which can be a concerning thought for HR professionals as the withdrawal could have a huge impact on the availability of employees that come from outside of the UK.

Of course where there is a will there is a way, if the UK did opt to leave they could still join the EEA (European economic area). This would guarantee access to a single market meaning employees maintain free movement. However it is likely that no alternative arrangements would be made and EU nationals would be subject to immigration laws.

Given the significant uncertainty when it comes to HR contingency planning raised by the EU Brexit, Selima have put together some quick questions and answers focusing specifically on your industry.

When is the referendum taking place?

A referendum on whether the UK should remain in the European Union will be held on 23 June 2016.

What employment law changes should be expect from the renegotiation?

No specific employment law proposals formed part of this agreement. However, some of the changes, such as restrictions on EU migrant in-work benefits, may have an indirect effect on employers.

How long would the UK’s exit take place after a majority vote to leave in the referendum?

Two years is the likely minimum period before the UK would actually leave the EU and the complex issues involved suggest that a longer period may be necessary. Exit would occur at the earliest on signing the withdrawal agreement or two years after notice is given.

What type of relationship might the UK have with the EU if it left?

The bottom line is that it is completely unpredictable. There has been no comparable precedent to provide guidance, so it is likely that a bespoke arrangement would be negotiated to accommodate the UK continuing a relationship with the EU upon leaving.

How would a vote to leave change UK employment law?

A vote to leave the EU would be unlikely to precipitate immediate and major employment law policy change in the UK and many EU laws would be retained. This is because a withdrawal would be a lengthy process and considering the amount of laws under the employment sector.

The government may be required to retain EU employment law as part of any new deal. Alternatively the UK may come under retaliatory EU trade pressure to maintain employment rights if we were seen to be unfairly undercutting them for a competitive advantage;

Some UK employment law exceeds minimum EU requirements (for example, family leave rights). Employment rights stemming from British, not EU, action are unlikely to change just because of a Brexit.

How would the free movement of people change if the UK left the EU?

In theory, if the UK were to leave the EU then citizens of other European states would no longer be entitled to an automatic right to travel to and work in the UK and the same applies for UK citizens when wanting to work in Europe. Realistically it would mean that negotiations for a new relationship with the EU, following a vote to leave, would form some sort of free movement of people in return for the UK enjoying free movement of goods.
Whatever the result, it is vital to remember that the EU countries would, in the absence of an agreement to allow free movement, be free to impose their own restrictions on UK citizens.

Would EU nationals already working in the UK have to return home following a Brexit?

Some EU nationals may have acquired rights to stay under UK legislation so it would seem likely that EU nationals already working in the UK would be permitted to stay in return for similar arrangements for UK citizens working in other EU countries.

So despite the difficulty of foreshadowing the impact of a Brexit there are certainly more than one reoccurring themes. However, a vote to leave would possibly last years, definitely not being something that happened overnight. During that negotiation, the more the UK pushed for continuing access to the EU’s Single Market, the more the EU would require, in return, for the UK to abide by EU regulation, the free movement of people and so on. So it becomes more of a agreement rather than a complete exit altogether.

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