HR, Employment Law and Brexit Speculations

04 Jul

It will no doubt be sometime before dust from the Referendum and its resulting ‘out’ vote settles.

One might argue that despite the months of campaigning, the implications for ‘out’ were not really understood by UK citizens. Many may also be unaware that the Referendum decision is not necessarily final, Government does have the power to override the People’s decision and stay, but with the applecart already upset it would take a strong Prime Minister to back track.

However, you voted, we are where we are now, so let’s think about some of the implications. At this time, we need to reassure our workforces that no matter bumpy the road ahead, knee jerk reactions will not be needed. Decisions need to be made from a perspective of being well informed, taking employee voice into consideration.

Employer Challenges

The biggest immediate challenge is likely to be reassure staff that any significant changes in employment rights and rights to work in the UK are highly unlikely to happen in the short-to medium-term (CIPD 2016). Ongoing communication and dialogue about any potential changes that become apparent during the Brexit negotiations is key. Major changes attack people’s sense of security, causing increased stress, anxiety and fear. Involving staff in meaningful consultations about planned changes should help to keep an orderly and fear free environment. This is essential to maintain high levels of productivity.

The task for HR and senior managers is to keep themselves abreast of how their organisation may be impacted. Equipped with the right information and guidance, they will be able to respond appropriately and alleviate employee’s concerns.

Employment Law

A significant body of UK employment law derives from the EU, and over the decades this has increased the protection enjoyed by the UK workers. In theory, the ‘out’ vote allows Government to amend employment law (with Parliamentary approval). However, the reality is that the legal framework under which EU-derived employment law is transposed into UK law is complex and will not be straightforward to dismantle even if there is the political will to do so. Commenters believe it will take up to a decade to untangle.

There will be legal and practical challenges associated with any attempt to unravel EU derived requirements from non-EU derived requirements, especially where case law has drawn on domestic courts’ interpretation of EU Directives and on ECJ rulings. The future of EU derived employment law will also depend on the political and economic relationship that the UK negotiates with the EU. Trade agreements such as the European Free Trade Area (EFTA) or joining the European Economic Area (EEA) could require the UK to still accept the majority of EU regulations (CIPD 2016).


Polling suggests that UK citizen’s discontent with the scale of migration to the UK was the biggest factor in Britons opting to vote out. While it is still too early to tell what new policies will look like the ‘out’ campaign pledged that the new immigration system would end the automatic right of all EU citizens to come to live and work in the UK. Following negotiations over the nature of the future relationship between the UK and the EU, it is highly probable that employers will in the future no longer benefit from free movement of labour within the EEA. It is also possible that EU citizens that enter the UK between now and the formal separation will not have a permanent right to live and work in the UK.

What we may see over the coming years is a points-based system. By entry to the UK will be granted following an application and scoring method. An option for Government is to extend the current system so that entry to work for non-EEA nationals is limited to people identified to be of value to the UK economy, such as skilled workers in "shortage occupations" or wealthy entrepreneurs and investors. Points are awarded on the basis of age, earnings, work experience and qualifications.

It appears there is no significant threat to the rights of EEA workers already in the UK to live and work here so existing EU workers can be reassured that they don’t face any risk to their job security. It seems likely that there will be some sort of worker registration scheme introduced in the future for EEA nationals already residing in the UK, to protect their right to continue to live and work in the UK. However, it is uncertain whether people from the EEA who enter the UK between now and the UK’s formal separation from the EU will have a permanent right to live and work in the UK.

The UK Government is likely to tread cautiously as any move against another country’s citizens would need to be carefully thought through and managed to avoid tit-for-tat measures, for example against British citizens enjoying retirement in Spain.

What we know for sure, is that it is too early to know; we can only observe, listen and speculate. 

Article adapted from CIPD 2016 factsheet ‘What HR needs to know if the UK votes to leave the EU CIPD June 16’