What impact will Brexit have on employment law?

There will be no immediate changes to UK employment law as a result of the outcome of the referendum on the UK's membership of the EU. The UK has a period of up to two years within which to negotiate the terms of its withdrawal. This began with the triggering of art.50 of the Treaty on European Union on 29 March 2017. It is possible for the two-year period to be extended only with the unanimous agreement of the other EU member states.

Although much UK employment law is derived from EU law, the UK's withdrawal from the EU is unlikely in itself to have an immediate impact on employment law. The Government intends to use the European Union (Withdrawal) Bill (known as the Repeal Bill) to repeal the European Communities Act 1972 and convert existing EU law into domestic law. Most EU Directives are already implemented in the UK by regulations or Acts of Parliament; for example, the EU equality Directives are implemented by the Equality Act 2010. It will be for Parliament to decide whether to retain, amend or repeal domestic legislation.

Commentators have identified the harmonisation of contracts after a TUPE transfer; the calculation of holiday pay; agency workers' rights; and the introduction of a cap on compensation in discrimination claims as examples of areas, currently governed by EU law, where changes could be made in the future by a Government looking to roll back employment regulation.

It is possible that the UK will be required to continue to implement elements of EU legislation as a condition of a negotiated trade deal between the UK and EU.

Many areas of domestic law that are derived from EU law have been heavily influenced by decisions of the European Court of Justice (ECJ), for example working time, TUPE and discrimination law. Under the European Union (Withdrawal) Bill, UK courts will not be bound by decisions of the ECJ made on or after the exit date. However, ECJ decisions made before that date will continue to bind UK courts in the interpretation of relevant laws and will have the same precedent status as decisions of the Supreme Court.