Business Law & Compliance

Four EU business laws that have a dubious future after Brexit

6 min read

27 June 2016

Former editor

With the British public picking Brexit and an end to its ties with the European Union, Real Business looks at four key laws which govern UK companies – analysing what the future of each could be.

Image: Shutterstock

One of the biggest arguments for leaving the European Union, alongside issues such as immigration and economic growth, was regulations imposed by Brussels on Britain. As part of the single market and open borders policy, centralised powers set up laws aimed at unifying how companies did business and treated staff.

Below, we’ve looked at four in particular and suggested what might happen in the future for entrepreneurs and business leaders throughout the UK.

Working Time Directive

Created in 1993, and then updated in 2000 and 2003, the Working Time Directive essentially created a blueprint for companies to follow when it comes to employing staff members. Alongside stipulating a minimum number of holiday days, rest breaks and hours a week, it was tasked with making sure people in the European Union were not over-worked.

Predictions in the run up to the 23 June referendum suggested that working time rules may be one of the first things to change in an independent United Kingdom. Arguments have been put forward that hours spent travelling to work and on call should count towards hours worked.

There is also the issue of how Britain’s own flexible working legislation could be worked into a general set of working laws.

European law that has been brought into UK law by secondary legislation by ministers under the European Communities Act (ECA) 1972, including that of the Working Time Directive, could fall away once the ECA framework was removed.

Working Time Directive: What are the new legal developments?

Temporary Agency Workers Directive

Agreed in 2008, the Temporary Agency Workers Directive is an EU law guaranteeing those working through employment agencies equal pay and conditions to those hired full time to do the same work. Slightly ironically, it is a law which more often than not protects migrant workers rights.

Looking forward, business groups (which are largely opposed to the law) would likely win out over a collection of workers which are not backed up by a trade union. The government has already been successful in watering down this law.

The Leave Campaign published details of plans for Britain after Brexit, featuring a suggested amendment for the European Communities Act 1972, which led to the the Agency Workers Directive, but not an immediate repeal.

All you need to know about Agency Workers Regulations

VAT MOSS

A much newer piece of legislation, VAT MOSS essentially means that any digital products sold in the EU are chargeable in the place of purchase – as opposed to the place of supply. The idea is that big online retailers such as Amazon will not be able to divert sales through countries in possession of a low VAT number.

However, as with many pan-European policies, an unexpected pinch has been felt by small businesses selling digital products overseas. Whereas before it was a simple process of declaring VAT, business owners of the small variety now have to work out where each customer is based.

VAT MOSS has attracted a fair amount of criticism for attempting to solve a problem many didn’t see existed. No news has yet surfaced regarding its future, but it has the potential to be one scrapped.

A look at the context of new EU VAT MOSS laws

General Data Protection Regulation

This one is even newer, and is yet to come into force yet. Its a concerted effort to mandate all businesses receive consent from people before data is used for marketing purposes. In an era when consumers are asked to surrender more and more data, and business strategy is increasingly directed by these insights, the EU wanted to make sure people received adequate protections.

Interestingly enough, the Information Commissioner’s Office, a non-departmental public body which reports directly to parliament and deals with the Data Protection Act 1998 and Freedom of Information Act 2000, amongst others, has come out and said that while the new EU protection laws would not apply to the UK if it leaves, UK protection standards would have to be “equivalent” to the EU’s General Data Protection Regulation if Britain wanted to trade with the single market.

Because of this, we can expect to see a new act drawn up, or a revision to an existing piece of legislation, so that UK businesses don’t encounter problems on the continent.

EU’s General Data Protection Regulation to shake up customer service

Conclusion

Much of the change that might happen is based on how closely tied the United Kingdom wants to remain with the EU. For example, Britain could remain part of the European Economic Area, and thus it would have to comply with the majority of EU employment laws. Similarly on the data front, for companies to do trade simply and effectively on the continent, the government would probably need to create a similar law of sorts.

Still don’t feel you have enough of an understanding of the Brexit ramifications? Have a look at our handy 500-word summary of the short and long-term business implications.