Brexit: EU social policy and the UK employment model

• Date: 01 November 2018
• Published date: 01 November 2018
• DOI: http://doi.org/10.1111/irj.12235
• Author: Jimmy Donaghey,Paul Teague

Brexit: EU social policy and the UK

employment model

Paul Teague and Jimmy Donaghey

ABSTRACT

Big claims that are often unsubstantiated are made about the likely impact of Brexit

on the UK labour market. This article seeks to go beyond the rhetoric and present a

careful assessment of the employment relations consequences of Brexit for the UK. It

addresses four key questions in particular: will Brexit end UK engagement in the

EU’s free movement of labour regime and if so, what will be the labour market con-

sequences for the UK?; to what extent will Brexit weaken employment rights in the

UK?; what impact will Brexit have on the behaviour of trade unions and on the func-

tioning of collective bargaining in the UK?; and finally, what will be the effect of

Brexit on the interactions between London and Brussels on wider employment policy

questions. The article argues that Brexit poses acute policy dilemmas for the UK

Government that are likely to generate considerable political and economic uncer-

tainty. The fallout from this uncertainty is hard to predict in advance. It could either

open the door to a Corbyn-led Labour Government or alternatively to an even more

thorough-going deregulation of the UK labour market.

1 INTRODUCTION

In June 2016, the UK voted by a small majority to leave the European Union (EU).

So-called ‘Brexiteers’rejoiced, proclaiming that UK citizens had won back control of

their country. In contrast, ‘Remainers’portrayed the vote as calamitous, arguing that

it represented a momentous act of national self-harm. Whether the UK is on the edge

of the abyss or nirvana has framed nearly all assessments about the consequences of

Brexit, not least discussions about the implications for workers’rights and wider

employment relations issues. A prominent and sustained argument made by leading

Brexit supporters, before and after the referendum, is that leaving the EU will bring

to an end the unwanted intrusion of Brussels into how the UK labour market is

regulated. On this account, EU membership has resulted in too much labour market

regulation, leading to a loss of economic competitiveness for UK businesses. Most

Remain supporters put forward a very different case, arguing that EU social policy

has led to the strengthening of workers’rights in areas such as equality, and health

and safety and that employment protection will be diminished even further as a result

of Brexit.

A feature of these sharply contrasting accounts of the employment relations conse-

quences of Brexit is that very often they are articulated in a superficial manner. Strong

claims are set out in the absence of any supporting in-depth assessments, although it

❒Paul Teague, Queen’s University Belfast and Jimmy Donaghey, Warwick University, Coventry.

Correspondence to: Professor Paul Teague, Queen’sU niversityB elfast, Belfast, UK;e mail:p.teague@qub.ac.uk

Industrial Relations Journal 49:5-6, 512–533

ISSN 0019-8692

© 2018 Brian Towers (BRITOW) and John Wiley & Sons Ltd

has to be said that Brexiteers are guiltier of this shortcoming. As a result, an impor-

tant need exists for assessments to go beyond the rhetoric and present more careful

accounts of what Brexit means for a series of interconnected issues related to the or-

ganisation of the UK labour market. The purpose of this article is to provide such an

account by examining the challenges Brexit poses for those features of the UK labour

market that have been affected by EU social policy. At the outset, it is worth stating

that European integration involves both market-making and institution-building pro-

cesses. Thus, the article focuses on the extent to which the market and institutional

pressures released by Brexit will challenge the British employment model.

In particular, we focus on whether Brexit will lead to the end of the free movement

of labour and if so, what will be the labour market consequences for the UK?; to what

extent will Brexit weaken employment rights in the UK?; what impact will Brexit

have on the behaviour of trade unions and collective bargaining in the UK?; and fi-

nally, what will be the effect of Brexit on the interactions between London and Brus-

sels on wider employment policy questions. The article argues that the most

immediate effect of Brexit is market-related as it endangers one of the main engines

of the UK employment model during the past decade or more—the free movement

of labour. Cutting off UK business from a huge supply of cheap labour from other

EU member states is likely to have a profound effect on the UK employment system.

Adjusting to such a situation not only poses acute policy dilemmas for the UK

Government but it also has the potential to create considerable political and eco-

nomic uncertainty. The fallout from this uncertainty is hard to predict in advance.

It could open the door to a Corbyn-led Labour Government or to an even more

thorough-going deregulation of the UK labour market or even conceivably to some

haphazard muddling-through option.

2 BREXIT, THE FREE MOVEMENT OF LABOUR AND UK’S LIBERAL

EMPLOYMENT MODEL

Free movement of labour, an integral feature of the European internal market, pro-

vided UK businesses access to a large untapped pool of workers, both low and high

skilled. Up until the early 2000s, free movement of workers remained a promise inside

the EU: only meagre numbers of people moved across member states to work. From

2004, however, this situation radically changed. The decisive factor precipitating this

change was the accession of what was known at the time as the A8 countries—east

European countries—to the EU (Donaghey and Teague, 2006). Figure 1 shows that

until eastern enlargement in 2004, only paltry numbers of citizens from other EU

member states moved to the UK. Then, the picture changed completely, with a huge

increase occurring in the numbers of EU citizens, consisting mostly of people from

east European member states, living and working in the UK. Since the Referendum,

the UK has become a colder place for migrants from east European member states.

During July 2017–July 2018, for the first time, migrants from the A8 countries left

the UK at a faster rate than they were arriving—45,000 east European migrants ar-

rived and 47,000 left. Thus, the Referendum result has had a chilling effect on the free

movement of labour from the rest of the EU to the UK. At the same time, during

2017–18, the UK continued to experience net migration—270,000 more people ar-

rived in the UK than leaving it, which suggests that EU migrants are being replaced

by non-EU migrants. Thus, the Referendum has not dented the UK economy’s

reliance on migrant labour.

513Brexit and the UK employment model

© 2018 Brian Towers (BRITOW) and John Wiley & Sons Ltd