Brexit – what are the employment implications for businesses?

employment implications brexit

As we approach 29 March there are changing levels of uncertainty around what might happen when the UK leaves the European Union, it is a good time to consider what options your business might have to take ahead of a possible Brexit.

The current position is that at 11pm on 29 March 2019 the United Kingdom will leave the E.U. This is known as the “withdrawal date”. A European court has ruled that the UK can decide to halt the process and stay in the EU at any time up to the deadline. Alternatively the process can be extended if all 28 EU members agree. However, daily news reports suggest that this is a potentially moveable goalpost, although there seems to be no agreement between the 28 EU members regarding extending the process. As such, the position is that the UK will leave the EU at the end of next month, whether there is a deal in place or not.

The transition period is the time after 29 March 2019 until the 31 December 2020 (or possibly later), and this exists to get everything in place and allow businesses and others to prepare for the moment when the new post-Brexit rules between the UK and the EU begin. It also allows more time for the details of the new relationship to be fully hammered out. Free movement will continue during the transition period. This transition period is currently only due to happen if the UK and the EU agree a Brexit deal. The current deal on the table was rejected by Parliament and as such the Prime Minister is in the process of seeing if the deal can be renegotiated. If there is no-deal, then the UK would sever all ties with the EU with immediate effect, with no transition period and no guarantees on citizens’ rights of residence.

As the position currently stands, if the UK leaves on the basis of the withdrawal agreement that is in place, then there would be no immediate impact in terms of legislation. Much of EU employment law has been brought into effect via UK legislation which will remain in place after Brexit, unless this is amended. A number of employment rights such as unfair dismissal and the minimum wage do not come from Europe and therefore would remain in place. The UK has come to expect a certain level of workplace protection and as such it is unlikely that any drastic changes to primary legislation would be made.

One change that will impact the tribunals and as a result, employers indirectly is the fact that UK courts and tribunals would no longer be obliged to follow decisions from the Court of Justice of the European Union (CJEU).

So what does all this mean for your business? In all likelihood you will have started preparing for Brexit, perhaps more than the Government has! What the impact of Brexit will be will depend on the nature of your organisation and how it operates: do you use a number of contractors that will be affected post-Brexit in terms of supplies and will this have an impact on service delivery? If so, it might be that you need to consider how you are going to continue to offer these services and if there are any ways in which internal changes can help minimise the potential disruption. Similarly, if there is no way of being able to handle a change to service provision, will this have an impact on your staff levels? If so, it may be that you have to consider redundancies or options short of redundancy such as reducing hours of work, recruitment freezes etc.

Finally, if you have employees who are EU nationals then you will want to have a plan for ensuring these employees can continue to work, or what your business will have to do if they choose not to remain in the UK. Any EU citizen already living and working in the UK will be able to carry on working and living in the UK after Brexit. The current plan is that even after Brexit, people from the EU will be able to move to work in the UK during a “transition” phase of about two years. What exactly happens after the transition period has yet to be decided, but the proposal is for a work permit system along the lines of that that exists for non-EU nationals.

There are still many questions to be asked and answered, but hopefully we will get these before the end of March and have a clearer picture of what a post-Brexit UK will be. If you have any questions or require specific advice in relation to Brexit then please contact a member of our Employment team.

employment implications brexit

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