Side view of corridor and docks.

Referendum – what's in it for EU?

23 July 2015

The referendum question is quite simple – "should the UK remain a member of the EU"?

Straightforward enough. But the implications of a "no" vote are much less clear cut.  And, if your company plans to take any kind of public stance about our membership of the EU, there's plenty to keep an in-house lawyer on their toes over the coming months.

So, suddenly, being an administrative lawyer and having a firm grip on law-making procedure as well as legislation could be incredibly valuable for you and your business – time to dig out those old law books and refresh your memory!

Contrary to what many might have you believe, a vote against remaining in the EU in the referendum does not automatically give the UK a one-way ticket out of Brussels. If you look at the way the legislation has been framed, there is no commitment to exit in the event of a "no" vote and it's highly unlikely that Cameron or his successor would push for that in any event.  There's a commitment to listen, yes. And to change. But that's almost as far as it goes.  After all, British Bill of Rights apart, how many of the many EU-initiated laws that we now have would actually be worth going through the pain of change to alter (and to what) in any event?  The concern seems to be mostly about "not more" rather than "let's have different or less".

As it stands, Cameron seems to be playing a canny hand in his dealings on the continent, touring member states, giving other leaders the excuse to surface issues they have with the EU, and negotiating behind the scenes to work out what can be improved without the need for full-scale treaty change – as the current Greek Eurozone negotiations have illustrated, it is hard enough to get the 19 Eurozone members to agree, let alone the full 28 of the European Union as would be required for treaty change.  Meanwhile, back in the UK, it is unlikely that any major EU-related matters would be subject to English Votes for English Laws and so Cameron's minor majority would be hard pushed to get anything through that did not secure the Scottish vote.

So, with what is more likely to be a series of small directional shifts, it's important for in-house lawyers to stay abreast of developments with an eye on what those changes are likely to mean for business.  It's probable there will be greater focus on the free movement of people, so it's as well to be aware of what that could mean for your employment strategy over the next couple of years, particularly if your business recruits heavily from other EU member states.

It is also likely that the limited ability to impact on intra-EU migrants is going to continue to result in "knee jerk" constraints on people from elsewhere.  This is increasingly biting at specialist and at senior employee level for companies that conduct recruitment activity internationally and may also affect the international mobility of your staff and of those key suppliers upon whom you may depend – would a restriction on free movement have knock-on cost implications in terms of who you outsource some of your operations to, as a company I know found recently when its IT supplier struggled to get one of its specialists over from India to do contracted work?  Perhaps this is worth considering while you review how your company will deal with s54 of the Modern Slavery Act's supply chain transparency obligations.

Equally, there could very well be changes to welfare legislation, which will need to be reflected in your employment contracts, your HR systems and your budgeting.  And, although it is not an EU-related matter, it may also be worth keeping an eye on what is proposed in relation to small company employee apprenticeships and related large employer levies.

But, more than that, if your company wants to get vocal and use this opportunity to lobby for change in the UK's relationship with Europe, then it's as well to get wise now to what that might mean for you as you and your company can get into trouble for spending as little as £10k - which is the level at which a whole set of rules kick in.  And if you get them wrong, both the company and your nominated representative officer (yes, that's more than likely going to be the most senior in-house lawyer – you?) are in danger of committing offences such as failing to register with the Electoral Commission, failure to record, failure to report etc.  So, if you plan to take a position on Europe, do it carefully, methodically, and in a well-structured way.

So, even as the likelihood of exiting the EU is, arguably, fading, not least as the economy improves, there is still plenty in the treaty change pot that will require you, as in-house lawyer, to be looking ahead and preparing your board for what those changes might mean for your business.