The Employment Law Blog

Brexit: The legal implications

There is no doubt Britain’s forthcoming exit from the EU will have a profound and lasting impact. Current political discussions are focusing on the difference between a soft and hard Brexit. A soft Brexit would involve Britain continuing as a member of the single market and allowing the free movement of goods and workers whilst a hard Brexit would end our involvement in both.

Other impacts have been less frequently discussed, but could be of significant importance for the future of Britain. One such area is the law and how this may change as a result of leaving the EU.

Currently, our government is required to implement all EU directives and the courts must comply with decisions made by the European Court of Justice (ECJ). Most likely to be affected are the laws relating to agriculture, intellectual property and the environment, all of which will no doubt be the subject of fierce negotiation during the next two years. Other areas which may have more of an impact for business owners and employees will be changes to the law on trade and employment.

Brexit: WorkersWorkers’ rights

Many employment rights, such as equality laws and rules relating to working time, are derived from EU directives.

Brexit will mean there is no requirement for us to follow the ECJ’s current, future or past decisions. It is even possible some matters could return to the courts and result in a completely different outcome. For example, the recent and infamous British Gas Trading Ltd v Lock case determined in certain situations employers should include commission in the calculation of holiday pay, but it could have ended very differently if UK courts were not required to interpret the law in line with previous decision of the ECJ.

Theresa May has indicated she will guarantee existing workers’ rights and enshrine current ECJ case law into UK legislation but critics of a hard Brexit point out this is only the position of the current Prime Minister. Indeed, the employment law landscape could alter radically once we leave the EU, depending on the political bias of future governments.

Many rules implemented by the EU enjoy broad public support, such as those preventing unlawful discrimination, but some were met with resistance when they were first introduced. Bodies lobbying on behalf of business would no doubt like to see the Agency Worker Regulations, 48-hour working week and TUPE legislation repealed or amended.

The government is unlikely to set out its position in relation to these more controversial employment laws until Brexit negotiations have concluded, but change is possible in these areas.

Brexit: TradeCommercial, consumer and contract law

Our membership of the EU has seen the existing British laws of commerce and contract expanded upon. There are however, some additional obligations imposed on us by membership of the EU, such as the right to cancel distance and doorstop transactions.

A soft Brexit is likely to mean we need to continue with many of the laws that govern the provision of goods and services, to ensure we can trade on an equal basis with other EU members. A hard Brexit, on the other hand, would give the government much greater scope to change how goods and services are provided.

Brexit of any kind will impact on how contractual disputes between British and EU companies are resolved. The terms of the contract between the parties is the starting point when determining which country’s courts can resolve a dispute but if a contract states the courts of EU member states will hear any claim for breach of the contract, then the UK courts may have no jurisdiction unless the contract is amended.

This may have unexpected effects on the contract, depending on the laws of the country that does have legal authority. It would be prudent therefore, for businesses to review their terms and conditions if trade with the EU is to continue following Brexit.

The future

It is difficult to predict what the future holds for the law in Britain following Brexit and it seems as uncertain now as it did when we voted to leave the EU.

The government has sought to reassure businesses and individuals that they do not intend to change much, but there is no doubt a hard Brexit provides an opportunity to make radical modifications.

It is unlikely that there will be significant legal change before the Brexit process is completed and even then, changes are likely to be a gradual, rather than a wholesale shift.

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