Brexit Week, day two: the fallout, the future

All this week, we are exploring the Brexit impact on housing. Today we turn to employment law.

Lee Rogers, associate in the employment, pensions and immigration team at Weightmans LLP looks at the critical issues that must be addressed:

The social housing sector has been the beneficiary of significant European funding in recent years and is understandably nervous about Brexit. Fears abound regarding cuts in funding and reduced access to lending if the UK economy dips.

Employment laws affecting the social housing sector also face uncertainty. A significant proportion of UK employment law derives from the EU, including discrimination rights, collective consultation obligations, TUPE, family leave, working time regulations and duties to agency workers. In theory the UK government could repeal all this on leaving the EU.

However, whatever trading relationship is created between the UK and the EU post-Brexit will include some level of compliance by the UK with EU labour laws. There will be an element of ‘horse trading’ between the UK government and the EU regarding those EU-derived employment laws which the government wishes to repeal or modify.

Potentially up for revocation are the complex and unpopular Agency Workers Regulations 2010, which afford workers the same basic working and employment conditions as directly hired employees after 12 weeks. Repeal might give social housing employers greater flexibility to hire and deploy temporary workers more freely.

However, the social housing sector traditionally draws from a broad recruitment pool including large numbers of EU nationals. If movement within the EU becomes more difficult employers might conceivably face recruitment shortages or difficulty in covering specialist work (such as construction or property maintenance). The administrative burden involved in employing an EU national may also increase as visas or sponsorship agreements may be needed (depending on the agreements reached between the UK and other EU countries).

Any changes to TUPE would heavily impact the social housing sector where services are outsourced and contracts won and lost regularly. The rules on transfers of undertakings were introduced to comply with European requirements and are sometimes criticised. However it seems settled that the core principle of protecting employees, by transferring them alongside a transfer of work, is worth keeping.

Indeed, the government recently consulted on extensive change to TUPE and shelved plans for reform after a negative response from the business community. TUPE promotes dialogue between employers and preserves jobs. Therefore, while the government may choose to ‘tweak’ TUPE post-Brexit to make it more user friendly, the rules are most likely here to stay.

In reality, EU law will probably continue to exercise influence on other UK employment rights, even after Brexit. Some EU employment laws merely subsumed protections that were already provided by existing UK law. For example, UK equal pay, race and disability discrimination laws preceded EU anti-discrimination obligations.

Even in the absence of any pre-existing right in UK law, much EU-derived employment law, such as family leave, discrimination rights and the right to paid holiday are woven into the fabric of UK working life. In fact, UK family leave rights go further than the EU requires. The new right to shared parental leave and the extended right to request flexible working are purely domestic in origin. It would be politically difficult to remove or reduce these protections.

While the post-Brexit employment law landscape is uncertain, widespread immediate change is unlikely. In these uncertain times, it is unlikely that the government will want employers to have to deal with an avalanche of legal changes and will prefer gradual, step-by step reform.

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