Brexit impact on UK legislation and the HR function

The referendum on the UK membership of the European Union is just around the corner. With it comes the possibility of a future where Britain gets to change and revisit some of the employment legislation currently decided upon by the EU. While it is hard to predict which laws the Government would include in such a review, there are a few obvious candidates that have been a thorn in the flesh of British businesses for a while now.The Government, in the event of a Brexit vote, may try to repeal certain aspects of EU law. Likely targets are Working Time Regulations (WTR), Agency Workers Regulations and CRD IV (which relates to bankers’ bonuses). However, a wholesale abolition of EU-based workplace law is very unlikely.

Working Time Regulations

Businesses affected by working time regulations often feel the EU Working Time Regulations (WTR) undermine labour flexibility and increase costs of hiring staff. The WTR governs areas such as employee working hours and holiday rest breaks.

In the event of a Brexit, these will come under greater scrutiny. While the UK Government is unlikely to seek to remove the legal right to paid holidays, in the event of a Brexit vote, other aspects of the WTR could be amended to reduce the administrative burden on employers, particularly in relation to breaks, rest periods and record-keeping.

The Government might, for example, scrap the 48-hour average weekly working time limit. In the past, successive governments have fought hard against this restriction, along with requirements to record hours to show that this maximum is not exceeded over a 17-week period. Attempts to reduce this obligation would be popular among many businesses.

In a post-Brexit world, the UK would equally have more freedom to decide how statutory holiday pay should be calculated. New rules could specifically exclude fluctuating payments such as commission or overtime.

Agency Workers Regulations

Agency Workers Regulations (AWR), as UK law, are also seen by many employers as a problem. The Government could remove the requirement for agency workers to be paid the same rate for a job as permanent staff after 12 weeks.

Also provisions requiring employers to notify employee representatives of information they have about agency workers could change. Repealing the Agency Workers Regulations (AWR) would reduce business costs and record-keeping requirements and could be seen as a quick win by the Government following a Brexit vote.

Overall, the most likely legal changes post a Brexit vote would probably come from Working Time Regulations and the Agency Workers Directive. More modest changes are likely to come for union power and TUPE, bonus payments legislation and data protection laws. Discrimination laws and family friendly working legislation seem far less likely to be affected.

What does it mean for HR?

A vote for Brexit would give the UK power to repeal or reshape employment legislation that many businesses dislike. However, a wholesale abolition of EU-based workplace law is unlikely for a combination of political and legal reasons. Yet, potentially fundamental changes to UK legislation may lie ahead and HR professionals need to start preparing for every eventuality ahead of the vote.

It’s important for HR to think about which laws currently affect their operating environment – and then consider the likelihood that these laws would be impacted by a Brexit. Only if HR professionals do their homework now can they help navigate businesses through a stormy, post-Brexit sea and add real strategic value to the business.