EU Directives are the basis for a number of UK employment laws, covering issues such as working time, holiday entitlement, health and safety, discrimination, business transfers (TUPE), collective redundancies and Works Councils.

Current EU employment laws are likely to be respected for at least a short period after Brexit.

But it is possible that there will be economic pressure after Brexit to make the UK marketplace more competitive and as attractive as possible for overseas investors.

Part of such a process would be to consider diluting workers’ rights and protections, to create a more flexible and agile workforce.

The general view is that TUPE will be the most vulnerable piece of EU-based legislation, as it is regarded by many UK stakeholders as being uncompetitive and inflexible.

Many companies are now considering how to manage exit provisions in services contracts and other procurement arrangements in the event that TUPE is repealed before current or new arrangements come to an end.

New Directives after Brexit

After Brexit, EU Directives will no longer automatically apply in the UK, but the UK may choose to respect at least the principles of future labour law Directives - or indeed may have to do so under the terms of Brexit, as a price for retaining access to the single market, subject to the UK’s final negotiated arrangement with the EU.

European Pillar of Social Rights

Other than in the specific areas governed by EU legislation, labour law already differs significantly across the EU member states in terms of the protections available to employees and other workers.

If the UK does not take part in any future EU harmonisation process, the gap between UK labour law and that of the European countries will widen.

This could create opportunities for the UK marketplace in terms of attracting investment from the USA and other countries which struggle to understand what they regard as overprotective EU labour laws.           

Recommended Actions

  • Identify UK nationals working in other EU or EFTA countries, and nationals from those countries working in the UK, to help plan for possible mobility restrictions and labour shortages post-Brexit;
  • Review all current and proposed cross-border secondment arrangements in case they need to be terminated early;
  • Anticipate the need for possible redundancies arising out of changing market conditions and/or mobility restrictions;
  • Consider duties to inform and consult Works Councils or other representative groups in relation to any Brexit impacts;
  • Consider the impact of likely labour law changes in the UK on business planning decisions, in terms of future development and expansion plans and new investment opportunities;
  • Review TUPE provisions in current outsourcing arrangements and services agreements and consider how to protect your company’s interests if TUPE is repealed before the outsourcing arrangements or agreements come to an end.
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