How will Brexit impact Employment Law?
Few areas of law are as politically volatile as employment law.
A key concern for UK employers is the likelihood of increased skill shortages. This is especially true in industries such as hospitality, agriculture, food manufacturing, and construction, which have relied on the talents of European Economic Area (EEA) nationals.
Confusion is also abundant regarding the status of EU-derived employment laws and how they will change after the UK leaves the European Union.
As EU and UK laws diverge, the British government will adapt employment laws to suit the UK market, so being alive to regulatory changes is crucial.
If you are concerned about how Brexit will affect Employment Law, read on for our Frequently Asked Questions or contact us for a free 15-minute legal consultation with one of our lawyers.
Brexit FAQs | Employment Law
What impact will Brexit have on employment law?
A significant amount of UK employment law derives from EU law. However, the likelihood for any immediate and significant impact of Brexit on employment law is low.
EU law is written in Directives or Regulations.
- Regulations are directly applicable in EU countries and do not need to be written specifically into each country’s individual laws, as well as UK law, for consistency.
- Directives have already been written into each EU country’s national rules, including the UK.
This, however, does not mean that employment law between the EU and the UK will remain the same forever. There are many employment matters which derive from EU law, including holiday pay calculations, the rights of agency workers and the cap on discrimination compensation claims. The UK may make changes to these areas of law in the future, and it is possible that we see a divergence between UK and EU law over time.
This, of course, will depend on whether there is a Deal reached between the UK and the EU. A term of the Deal may be to ensure that employment law remains consistent between the two.
Other employment rights actually derive directly from the UK, and so will be unaffected by Brexit. This includes unfair dismissal and the minimum wage. There are also employment matters where the UK exceeds the EU minimum, such as maternity leave and annual leave requirements. And so these are other areas where change is unlikely.
How will Brexit affect employees from EU countries?
The UK Government has proposed an EU settlement scheme for EU citizens working in the UK. You may wish to provide your employees with information on the scheme.
For EU citizens currently living in the UK, they can apply for themselves and their family members to stay in the UK after Brexit.
The key elements of the settlement scheme are:
- The individual and their family must have been living in the UK by 31 December 2020
- Individuals who have lived in the UK for a continuous period of more than 5 years are eligible for ‘Settled Status’. This means that they can apply to settle permanently in the UK
- For individuals who have lived in the UK for less than 5 years, they are eligible for ‘pre-settled status’. This means that they can apply to stay in the UK for 5 years, and will then be eligible to apply for settled status
The settlement scheme has been open for individuals to apply since 30 March 2019.
Be aware that, following Brexit, recruiting EU citizens who do not already live in the UK is likely to be difficult. There are expected to be strict rules for immigration, particularly concerning skills and salary.
How will Brexit affect the self-employed?
There are potentially pros and cons for the self-employed following Brexit.
In terms of the positives, particularly for independent professional contractors, firms are likely to require more temporary resource (in the short term, at least) to deal with the changes arising from Brexit.
However, there are also likely to be difficulties for the self-employed. Freelancers and sole traders are expected to have more difficulty taking out loans, especially mortgages, because there may be reduced access to finance.
There may also be fewer opportunities for the self-employed to trade outside the UK, particularly with access to the single market potentially reduced in the event of a no-deal Brexit. If there is no or limited access to the single market following Brexit, there will be additional charges and obstacles for the self-employed (as with all businesses) when attempting to trade with the EU.
What are the legal obligations of employers in regards to their staff?
As an employer, your priority should be to ensure that your employees that are EU, EEA and Swiss nationals have been provided with all of the relevant information, including key deadlines on the EU settlement scheme (they need to apply by 30 June 2021, or 31 December 2020 in the event of a ‘no deal’ with the UK and the EU).
It would be advisable to issue a statement setting out the information relating to the EU settlement scheme and offering to help with any queries they have.
Employers should also consider having a long-term plan for how they plan to recruit EU, EEA or Swiss employees after Brexit.
It is possible that certain workers will face discrimination or bullying as a result of Brexit. Employers are advised to remind all employees of their policies on discrimination and harassment, and state that any behaviour of this kind will not be tolerated.
Who needs to apply for "Settled Status"?
All EU/EEA citizens, excluding Irish citizens, or Swiss citizens living in the UK by 30 June 2021 (or 31 December 2020 if the UK leaves the EU without a deal) need to apply for either ‘pre-settled’ or ‘settled’ status. Individuals who have lived in the UK for less than 5 years must apply for pre-settled status first and then, when they have lived in the UK for 5 years, can and should apply for settled status.
If you are not an EU, EEA or Swiss citizen, but your family member is, you must also apply for the EU settlement scheme.
You must apply even if
- You are a family member of an EU, EEA or Swiss citizen who does not need to apply (even if they are from Ireland)
- You are an EU, EEA or Swiss citizen with a British citizen family member
- You have a UK ‘permanent residence document’
- You were born in the UK but are not a British citizen
How can EU staff apply for “Settled Status” and how long does the process take?
EU citizens living in the UK can apply now via the UK Government website.
It is currently expected that applications will take 5-9 days to process where no additional information is needed from the application (although this could be longer).
The process can take longer if more information is required if a paper application is submitted rather than online, or of the applicant has a criminal record.
Where can employees find further information about visas and immigration?
Employees should consult the UK Government website for information on staying in the UK following Brexit.
Following Brexit taking effect, if the UK chooses to repeal TUPE, how will this impact upon outsourcing business models?
It is important to note that a full repeal of TUPE is unlikely. The UK Government and the business community in the UK appear to fully support the principles of TUPE. It is much more likely that there will be gradual changes to TUPE.
However, if TUPE is repealed, there could be a significant impact on employment costs in outsourcing contracts. If TUPE is not effective, this means that staff will remain with the outsourced service provider following the end of a service contract. The service provider will then be left with employee liabilities, including having to make those members of staff redundant from the service provider.
It is advisable for businesses involved in such arrangements to reach an agreement with service providers as to how staff will be dealt with in those circumstances if TUPE is repealed. Businesses may wish to update the drafting in their current contracts to consider the possibility of a repeal of TUPE.
What should employers do if they see racism or harassment linked to Brexit in the workplace?
It is possible that employees become victims of harassment or racism as a result of Brexit. It is advisable for all employers to issue a statement reminding employees of their harassment and bullying policy, and stating that they have a zero-tolerance policy to all potential discrimination.
If you see or are advised of racism or harassment linked to Brexit, this should be dealt with in accordance with your harassment and bullying policy in the same way as any other discrimination.
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