Legal update 04 August 2016

Brexit special: in the wake of last month’s referendum, which concluded with the UK voting to leave the EU, specialist transport law firm Backhouse Jones outlines the impact

The UK’s vote to leave the European Union gives the prime minister a mandate to serve ‘notice to leave’. With David Cameron’s resignation, it will be left to the next prime minister to invoke Article 50, which triggers the two-year exit period and associated negotiations. So it will be at least 2018 before anything changes substantially.

While leaving the EU does involve setting aside all EU regulations, many have already been incorporated into UK law, or were derived from regulatory structures that predate the UK’s membership. Such legislation will not automatically be set aside once the exit period is concluded. Moreover, negotiations may involve the UK agreeing to continue some EU transport and employment legislation that would otherwise be lost. The following is a reasonable assessment of what Brexit will look like.

Operator licensing

The Goods Vehicles (Licensing of Operators) Act 1995 and the Public Passenger Vehicles Act 1981 are UK legislation that will not be lost on Brexit. So, aside from potential changes to financial standing and repute, the legislation will remain unchanged in the mid term. However, the UK is unlikely to see the scope of goods vehicle licensing excluded to sub 3500kg vehicles as mooted by the EU.

Driver CPC

These regulations are unlikely to change. Although created by the EU, the UK is a signatory of AETR (European Agreement Concerning the Work of Crews of Vehicles Engaged in International Road Transport), which includes driver CPC obligations. Remaining a signatory of AETR is expected to be a condition of ongoing trade with the EU.

Tachographs and drivers’ hours

These are governed by EU Regulations 561/2006 and 651/2014 so could no longer apply on leaving the EU. However, as with Driver CPC, AETR incorporates these rules so they are likely to continue to apply. Additionally, the Transport Act 1968 incorporates these rules into requirements currently enforced in the UK.

Cabotage and PSV EU operations

The right to cabotage using goods and passenger vehicles will be removed unless negotiations with the EU preserve them. Operators carrying out journeys across the EU are advised to engage in dialogue, perhaps through trade associations, to ensure that the government is aware of the issues.

Driver licensing

This is harmonised within the EU and is unlikely to change in the mid term.


While it is difficult to forecast the outcome of UK-EU negotiations, it is probable that EU migrants already here will be able to stay. It is also possible the UK will maintain free movement of labour in return for access to the EU single market. However, an alternative is an Australian-style points system. If so, the transport industry may need to negotiate requirements. Equally, however, given the possible devaluation of the pound and potential cuts to benefits, migrant workers may choose to leave. Given the industry’s heavy reliance on immigrants for its workforce – including but not only for professional drivers – this could worsen the skills crisis.

Currency and costs

Expect volatility in value of the pound, particularly during the two-year negotiations, which may significantly impact operator costs. Oil, for example, is traded in dollars, so a weak pound will force fuel price rises.

Transfer of undertakings

It is very unlikely that TUPE – Transfer of undertakings (Protection of Employment) – laws will be repealed. However, there may be a push from businesses to persuade the government to enact changes that make it is easier to harmonise employees’ terms and conditions post transfer to new company ownership. Similarly, businesses may want to reduce the burden of current information and consultation procedures.


Holiday pay is contentious. Many employers are unhappy with the right of employees to accrue holiday while on sick leave. Recent European court decisions have also dictated UK working time laws concerning the inclusion of commission and non-guaranteed overtime in the calculation holiday pay. Brexit might allow the government to consider changes towards more business-friendly regulations.

Discrimination law

There is an appetite to limit the compensation employees may be awarded if successful in a discrimination claim. At present, compensation is unlimited. Other changes in discrimination law are very unlikely. Discrimination and harassment are not behaviours any likely UK government would look to encourage. Current rights are likely to be protected.


While UK employment law is almost certainly not going to change significantly in the wake of the vote to leave the EU, the UK political landscape may well change. There is little information available at present that allows us to see too farther into the future.

Backhouse Jones

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