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UK Employment rights in a no-deal Brexit

17 September 2019

What might a ‘no-deal’ Brexit mean for UK employment rights? What could employers do now to prepare? And what might the future hold in a no-deal scenario?

With the news about the effective suspension of UK parliament, no clear sight of a UK-EU Brexit deal, and the emergence of a cross-party movement to try to avoid a no-deal Brexit it is hard to say what will happen next in the UK. However, Prime Minister Boris Johnson remains clear that he would be prepared to leave the EU without a deal if necessary and the current legislation still commits us to leaving the EU at 11pm on 31 October, deal or no deal. It seems a good time for a recap on the potential employment law implications of a no-deal Brexit and an update on the latest immigration position.

What could employers do now to prepare for a no-deal scenario?

Support for EEA/Swiss citizens and their family members: Employers should continue to remind relevant employees to make their applications under the EU Settlement Scheme.  The deadline for applications in a no-deal scenario will be 31 December 2020.  EEA/Swiss citizens and their family members who’ve lived in the UK for five years or more at the date of application can apply for ‘settled status’. Those who have not been living in the UK for five years will be granted ‘pre-settled status’ until they have reached the five-year threshold (when they will be granted settled status). Irish citizens are not required to apply under the scheme due to the common travel area arrangements, however may do so if they wish. The non-EEA/Swiss family members of Irish citizens should consider applying under the Scheme as its provisions are much less onerous and significantly less expensive than applying under domestic immigration laws.

Bring forward start dates where possible: Given the uncertainty over the post-Brexit immigration position (see below) employers should try to manage their recruitment pipeline where possible to ensure that proposed new employees  who are non-Irish EEA/Swiss citizens enter the UK before 31 October 2019.

Support for British citizens: The European Commission has asked all member states to provide residence permits to British citizens living in their countries at the date Brexit occurs, but long-term arrangements will vary from country to country. The Commission has published a summary of the position in each country. In many cases, arrangements have not yet been finalised or may be subject to change, so developments will need to be monitored.

European Works Councils: Be sure to have pre-designated your new representative agent if your EWC is currently located in the UK. If your EWC is (or will become) located in another EU country, you will need to decide what to do about your existing UK representatives after Brexit (see here for the EU Commission’s latest position). If you are currently negotiating an EWC agreement, or if you have a EWC operating under the default ‘subsidiary’ requirements, consider relocating your arrangements now if you’ve not already done so.

Data Protection: If a no-deal Brexit approaches, you may need to take steps to protect data flows from the UK to the EU.

Impact on business: There is a reminder in our previous article here about the legal requirements if you are considering restructuring or relocation after Brexit. The key points are, firstly, that you may need to consult on the business case for closure before any decision to close a business is taken. And, secondly, employees should be offered the opportunity to move with the business if it is relocating. 

Following a no-deal Brexit – what would it mean?

Employment law: In the event of a no-deal Brexit, the European Union (Withdrawal) Act 2018 (the “Withdrawal Act”), will convert all EU employment law as it stands before Brexit into UK law. The Employment Rights (Amendment) (EU Exit) Regulations 2019 will make some small technical changes and introduce new provisions intended to preserve UK-located EWCs but employment law will otherwise remain the same.

Business travel to the EEA and Switzerland: The rules for British citizens travelling to Ireland will not change and they will be allowed to undertake any activity without restriction. After Brexit, British citizens travelling to the other EEA countries or Switzerland will be exempt from visa requirements for up to 90 days in a 180 day period. This is for visits only, including for attending business meetings. However, British citizens will be unable to undertake paid work, so you’ll need to understand the scope of the proposed activities on each trip and obtain any required work permissions if these go beyond the activities allowed for visitors. It will also be important to calculate the time spent in the Schengen area on a rolling basis to ensure the 90-day maximum stay is not exceeded. British citizens will also need to have a passport which is valid for at least six months from the time they enter the EU. Note that some British passports are issued for more than 10 years in total but only the first 10 years of validity can be counted towards this six-month requirement. The government has produced a calculator that people can use to check if they have enough time left on their passport to cover a visit.

Business travel to the UK: Irish nationals will continue to be able to undertake business travel to the UK without restriction indefinitely due to the common travel area arrangements. Other EEA/Swiss citizens will also be able to undertake business travel to the UK without restriction in the same way as they do now until 31 December 2020. From 1 January 2021 they would need to meet the requirements for non-visa national visitors under the post-Brexit immigration system. 

What would the no-deal future look like?

New immigration requirements: The Home Office has confirmed that freedom of movement would continue from the date of a no-deal Brexit until 31 December 2020, with EEA/Swiss citizens being able to voluntarily apply for European Temporary Leave to Remain (Euro TLR) during this period. Euro TLR would be valid for 36 months from the date of grant. The advantage of holding Euro TLR is that time spent with this type of leave would count towards the qualifying period for settlement under an eligible post-Brexit immigration category. The post-Brexit immigration system is due to be implemented from 1 January 2021. The current government has indicated an intention to depart from the proposals originally put forward for the new system in the immigration white paper, for example by incorporating some new  Australian-style points based categories. The Migration Advisory Committee is currently calling for evidence on what salary thresholds should be put in place for skilled workers under the post-Brexit immigration system.

Employment caselaw: Under the Withdrawal Act, pre-Brexit decisions of the European Court of Justice will remain binding on most UK tribunals and courts, but need not be followed by the Supreme Court. New ECJ decisions will not be binding on any court or tribunal, although could be taken into account if relevant. On the whole, however, UK courts are likely to continue to respect most ECJ rulings, as long as UK and EU legislation remain the same.

No New Directives: The UK would not be required to adopt the Transparent and Predictable Working Conditions Directive, the Work Life Balance Directive, the Whistleblower Directive or any future EU directives. The UK, however, has already committed to implementing some aspects of the Transparent and Predictable Working Conditions Directive, is one of the few EU countries to already have whistleblower protection and already provides some of the rights established under the new Work Life Balance Directive. So, whilst differences in employment law could open up relatively soon, they will be quite small.

Longer-term changes to employment law: Bigger gaps will open up if the UK government takes the opportunity to dismantle EU-derived employment laws after Brexit. Theresa May was always emphatic that her government would look to enhance workers’ rights after Brexit, not reduce them. However, future prime ministers may take a different stance.

Boris Johnson is reported to be keen to renounce the Working Time Directive. He gave evidence to a select committee that it had proved too expensive to implement in the UK. If Boris Johnson remains Prime Minister then we can reasonably expect the scrapping of EU rules on working time limits and record keeping requirements. Indeed, it would be more surprising, given the strength of his previous statements, if he made no changes whatsoever to EU-derived working time laws. However, rights to paid holiday are unlikely to be scrapped altogether.

In the longer term, if a Conservative government remains in power, we might also expect to see collective redundancy consultation being abolished or made less onerous and the restrictions on changing terms after a TUPE transfer being lifted (although we are unlikely to scrap TUPE). Previous governments have explored whether discrimination awards could be capped (for example at one or two years’ pay) but this was problematic under EU law. Capping discrimination awards is unlikely in the short term, not least because of the #metoo movement, but it could come back on the table at a later date.

In its final days of government, Theresa May’s administration published a flurry of proposals and ideas for reforming employment law. These included proposals to regulate Non-Disclosure Agreements (NDAs) and to extend redundancy protection to maternity returners, along with a series of consultations about other potential reforms ranging from a shake-up of parental leave entitlements to new rights to request workplace adjustments. Some of the proposals have been a long time in the making and seem likely to proceed under any stable administration. However, it remains to be seen whether our current and any future government will take forward all of the ideas currently open for consultation.

Ultimately, the UK faces the same challenges as any other modern economy: how to regulate the increasing volume of platform and contingent working and respond to the impact of demographic and technological change on the workplace. The UK’s withdrawal from the EU will mean that the UK will need to find its own regulatory solutions to these challenges.

Discrimination rights: Finally, remember that UK law prohibits workplace discrimination on grounds of nationality and national origin. In the (hopefully unlikely) event of any EU citizen experiencing abuse or harassment in your workplace, you would need to be ready to respond under your anti-harassment policies. You may want to check that they already cover nationality as well as race.

Interestingly, UK equality legislation goes further than EU minimum requirements in explicitly preventing nationality discrimination in the workplace. This is one of a number of instances where UK law actually provides more rights than the EU minimum, and illustrates that, although the UK may dismantle some EU-derived employment rights following a no-deal Brexit, there are still likely to be areas of employment law where the UK goes further than the EU.

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BREXIT

The UK left the EU at 11pm (UK time) on 31 January 2020. The EU Parliament officially approved the terms of the revised deal negotiated by the Johnson Government, and the UK Parliament has finally passed the legislation needed to implement it in the UK. This provides more certainty for UK businesses, although trade talks will now need to decide the shape of the ongoing future relationship between the UK and the EU.

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