June.24.2016
Firstly as we have all heard repeatedly today, nothing is going to change immediately and that is the same for employment law. It will be years before any changes are made and for the time being, everything remains the same and critically, no one has to leave.
Much of our employment law is just that – employment law driven solely by the UK. We then have laws that have been enacted into UK law as a result of European directives – so those laws are the ones that may, at some point in the future, be targeted. Our guess at Orrick is that changes where they happen will be focused on consultation rights, holiday pay and working time. Worker involvement has never had the same traction in the UK that it has with our European counterparts and the UK has always viewed employee consultation with a degree of skepticism. For this reason, we think it may eventually be a focus for change.
The Transfer Regulations (TUPE) which work to automatically transfer all employees on the sale of business will remain for now. It is a UK law from a European directive so it may eventually be changed or watered down. The consultation rights may be targeted and possibly the restriction on the right to change terms and conditions of employment on a transfer. But when we implemented TUPE 2006, we went further with the protections than were required by the directive, so the indications are that we would not remove it altogether. Notably, although the previous government suggested removing this ‘gold plating’, when it came to their review, their changes were minimal and they left the ‘gold plating’ in place.
This has already been watered down by the current government who have reduced collective consultation from 90 days to 45 days for redundancies of more than 100 employees. The commentators are suggesting that we may remove the requirement to collectively consult on redundancies of 20 or more and just keep it for redundancies of 100+. The collective consultation requirements are generally unpopular and this fits within our suspicion that worker engagement will be a target for change.
The uncertainty that has been created by the overtime and commission cases in relation to holiday pay is something that will be addressed eventually and it seems likely that holiday pay will be stripped back to basic pay only. There is a certain clarity to this that will be appealing to many. In addition the accrual of holiday whilst on sick leave is likely to be removed.
No one will have to leave for now. All indications are that European residents in the UK will have to register their residency once we formally leave the EU and then the anticipated plan is to implement an Australian style points based system but little is known about how that will work in practice.
At the moment we have only draft Regulations in this area which are due to be finalised and come into effect by October this year, just as Mr Cameron departs office. Our best guess at this point is that Cameron will push ahead with these Regulations in the hope that he can adjust his legacy to a Prime Minister who did great things for gender equality rather than, as one columnist commented today, the man who left us in ‘a toxic swamp of post-colonial nostalgia, xenophobia and general disaffection’.