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Legal fallout from in or out referendum

08/02/2013

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Prime minister David Cameron has promised to renegotiate the terms of the UK’s EU membership if the Conservatives win the next general election.

First appeared in People Management, 7 February 2013

A vote to withdraw from the EU could have a significant impact on established UK employment rights

Prime minister David Cameron has promised to renegotiate the terms of the UK’s EU membership if the Conservatives win the next general election. He has said he will offer the British public an ‘in or out’ referendum, by the end of 2017 at the latest, to decide whether to stay in the EU on the renegotiated terms or withdraw completely.

The true purpose behind the referendum pledge may be to placate Cameron’s backbench MPs and obtain electoral gains from UKIP. Regardless of the politics, any renegotiation of terms, or the UK’s leaving the EU altogether, would have huge implications for UK employment law, employees and employers.

Which laws would be affected?

Since coming into power the Coalition has been undertaking a programme of employment law reform which it considers will boost the economy, so it’s likely one area of EU reform that would be high on the Conservative Government’s agenda would be "social affairs", which includes employment legislation. Many Conservative members of the Government see EU-derived employment rights as ‘red tape’ preventing businesses from operating efficiently and flexibly. Cameron has not indicated which powers he would wish to claw back but trade unions suspect he will seek to weaken employee rights.

The UK’s employment laws derived from or heavily influenced by EU legislation include:

  • anti discrimination laws protecting people from discrimination on the grounds of race, age, sex, disability and so on
  • rights for agency workers and part time workers
  • pregnancy and maternity rights
  • working time regulations, giving a maximum average 48 hour week and entitlement to minimum rest breaks
  • the right to a minimum entitlement of paid annual leave
  • equal pay
  • collective redundancy and Tupe laws.

Any of these employment rights could be vulnerable to repeal.

What might change?

A number of Conservative MPs have already suggested employment laws dealing with issues such as working time and maternity rights should be a priority for the renegotiation agenda. Cameron himself has indicated his desire to opt out of the working time directive. We could, therefore, see the maximum 48 hour week abolished, a reduction in statutory holiday rights, a watering down of maternity rights and/or a repeal of the Tupe and collective redundancy legislation. If we opt out of the EU equal pay legislation, many women would be affected. However, it is difficult to see how, politically, the Government could ever repeal or significantly water down our current anti-discrimination laws.

These changes could only be achieved if the UK were successful in renegotiating the terms of its membership by opting out of the EU social policy. This is a very big "if". It is unlikely other EU member states will allow the UK to compete unfairly by “cherry picking” only those policies or laws that suit its own economic purpose. So, the chances of a substantive renegotiation of terms are slim, either as a member within the EU or by way of bilateral agreements on exit.

Cameron’s statement, about the UK’s departure being a “one way ticket, not a return” may be true of membership, but access to EU markets, even as a non-member, would still require a host of separate agreements which are likely to be tied to observance of EU employment laws. And the first obstacle that Cameron has to overcome to make any impact on our employment laws is to win the 2015 general election with an overall majority.

Olivia Baxendale, Associate in Fieldfisher's Employment & Pensions group

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