The Europe Debate – Brexit and the impact on domestic employment law

On behalf of Attwaters Jameson Hill posted on Sunday, January 8th, 2017

You cannot open a newspaper, turn on the TV or radio without hearing or seeing a discussion about the referendum on 23rd June to decide whether the UK leaves or stays in the EU. One of the key questions if we were to leave is the impact that this would have on domestic employment law. We derive a great deal of our employment legislation from Europe and therefore is pitched for reform should we vote for an exit.

You cannot open a newspaper, turn on the TV or radio without hearing or seeing a discussion about the referendum on 23rd June to decide whether the UK leaves or stays in the EU. One of the key questions if we were to leave is the impact that this would have on domestic employment law. We derive a great deal of our employment legislation from Europe and therefore is pitched for reform should we vote for an exit.

One piece of legislation that may be impacted in particular is TUPE, the Transfer of Undertakings (Protection of Employment) Regulations 2006 – the UK’s implementation of the Acquired Rights Directive. TUPE is a statutory provision that acts as to protect employment rights when there has been a transfer of an undertaking (sale/purchase of a business’s assets) or a service provision change (insourcing/outsourcing).

The restrictive nature of TUPE and the formalities it imposes in terms of the automatic transfer principle of employees and the obligation to inform and consult can often be off putting to overseas business as they are unaccustomed to such a rigid framework.

In the event of a ‘Brexit’ it is thought, in the employment law community that TUPE will be ripe for reform and potential relaxation. It is wholly unlikely that TUPE would be repealed in its entirety given its place in the statute books for more than 30 years. The mostly likely change is to the obligation to inform and consult reducing the burden to collectively consult or restricting the imposition to larger businesses.

This seems to be the most likely approach in a post-Brexit environment, seeking to balance the needs of businesses with a well-established regime of employee protection.

A further issue that might affect the application of TUPE is the approach that employment tribunals and courts would take when interpreting and applying TUPE, whether or not the Regulations themselves remain unchanged.

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