Brexit Update: UK Employment Law Implications

Overview


The United Kingdom will continue to be an EU Member State until procedures are completed for exiting the European Union. Until a withdrawal agreement is reached, EU laws and treaties will still apply, including the right for EU nationals to work in the United Kingdom. This means that all current EU-derived employment laws should remain in place for at least two years.

In Depth


What laws will change now?

None.

The United Kingdom will continue to be an EU Member State until procedures are completed for exiting the European Union. This is likely to be a long process that will only begin when the United Kingdom gives notice to the European Union of its intention to leave. There is currently a huge question mark over when notice might be given.

The notice will trigger a two year deadline for the United Kingdom and the European Union to negotiate a withdrawal agreement, although the deadline can be extended with the unanimous consent of the remaining EU Member States.

During the negotiation period, EU laws and treaties will still apply to the United Kingdom, including the right for EU nationals to work in the United Kingdom. This means that all current EU-derived employment laws should remain in place for at least two years

What Might Change in The Future Once The Withdrawal Agreement Has Been Reached?

The final withdrawal agreement will clarify which EU laws and regulations will no longer apply to the United Kingdom, and which will continue to apply.

Those employment laws that take the form of primary legislation in the United Kingdom –anything that’s included in an act of parliament, e.g., the Employment Rights Act 1996 and the Equality Act 2010 – will continue in force regardless.

UK secondary legislation – anything that’s enshrined in a regulation, e.g., the Transfer of Undertakings (Protection of Employment) (TUPE) Regulations 2006 and the Working Time Regulations 1998 – may continue to automatically apply if the United Kingdom remains a member of the single market. If the United Kingdom leaves the single market, however, those Regulations will fall away unless the UK Government decides to reaffirm them.

In theory, if the United Kingdom leaves the single market, the UK Government could tear up existing employment laws, but that’s unlikely for a host of social reasons and political and commercial considerations; future trade agreements with the European Union would almost certainly require continued compliance with key EU labour laws.

Conceivably, tweaks might be made to UK employment laws to make the country more attractive to outside investment and to address some of the less popular EU-derived developments such as the continued accrual of holiday entitlement during long-term sick leave, the expansion of sums to be included in holiday pay, the difficulty of harmonising terms and conditions of employment following a TUPE transfer and the agency workers regulations, but it is likely, overall, that the impact on key employment laws will be minimal.

What do I Need to Be Thinking About Now?

Recruitment, Promotion and Access to Career Development Opportunities

Job adverts should still make positions open to all those who have the right to work in the United Kingdom now, even though they may end up losing that right.

It may feel as though it’s pragmatic to prefer UK candidates, especially for roles in which long term stability is required, but a recruitment or promotion decision to give priority to a UK national over a better qualified EU national might well result in a strong challenge on the grounds of race discrimination.

Conversely, some EU nationals might be considering leaving the United Kingdom, given that their right to remain long-term is in doubt. Key employees should be identified and thought given to whether retention arrangements should be put in place.

Reductions in Force and Internal Restructuring

Headcount reductions, occurring either as business-as-usual, or because of concern over the impact of Brexit, should be carefully managed to ensure that EU nationals are not unfairly selected for redundancy.

It may be wise, during the next two years, to introduce more robust systems to carefully consider and record the rationale for business decisions and selections.

Collegiality

There is anecdotal evidence that racial tensions have heightened in the aftermath of the referendum. Employers should perhaps keep a close eye on attitudes and behaviours between staff members.

This might be a good time to refresh workplace harassment and bullying training, and any incidents should be addressed robustly.

Uncertainty

For many organisations operating in the United Kingdom, an immediate concern is likely to be addressing the negative impact on staff morale caused by the wide-ranging uncertainty Brexit has created. An effective internal communications strategy will be required to address this.

HOW WE CAN HELP

McDermott’s Brexit Group draws from experience across our legal disciplines and offices throughout Europe, the United States and Asia. We will continually provide updates on Brexit, answer questions, or advise on how best to prepare for the effects of Brexit going forward at our Brexit Resources Page.

ACCESS BREXIT RESOURCES

Visit our Brexit Resources for ongoing legal updates and news.

QUESTIONS & GUIDANCE

If you have questions or would like additional information, please reach out to our: BrexitTaskForce@mwe.com.