Brexit update – what this means for employment?


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The uncertainty surrounding Brexit continues, with the focus temporarily shifting to a General Election in December.  The EU has granted the UK an extension until 31 January 2020, but what does this mean?  Will the UK be leaving with a deal, crashing out of the EU on 31 January, getting a further extension to continue negotiations, or calling the whole thing off?

As we know from the past three years, the future is hard to predict.  It's helpful, however, to look at the potential ramifications of the UK leaving the EU, even if we don't yet know the details of any final deal, or whether, indeed, there will be one!

As things stand, we believe the status quo will be preserved for employment law in the immediate aftermath of Brexit so there will be no instant change.

No overnight changes to employment law

The European Union (Withdrawal) Act 2018 repeals the European Communities Act 1972 and makes a range of legislative provisions in connection with the UK's withdrawal from the EU.  It provides the legislative basis for a "hard Brexit" and states that, while not being "bound", courts and tribunals may "have regard to" anything done on or after exit day by the European Court of Justice (the ECJ) (and the EU itself) "so far as is relevant to any matter before the court or tribunal".  The Act largely maintains continuity of employment legislation so current employment rights will remain on "day one" after Brexit, and, in the event of a "no deal" scenario, will guarantee the vast majority of EU-derived employment legislation at the point of exit.

The government has previously committed to ensuring that the protections covered in the Equality Act 2006, the Equality Act 2010, and equivalent legislation in Northern Ireland will continue to be available the day after EU exit, as the day before.  In other words, all the protections in the Equality Act 2010 against discrimination, harassment and victimisation for those with "protected characteristics" will continue to be available in full.

The Department for Exiting the European Union has published a technical note, 'Workplace rights if there's no Brexit deal' (23 August 2018, updated 8 August 2019).  This states that, "In most cases there will be no changes to workplace rights if there's a no-deal Brexit", although there will be implications in relation to European Works Councils (EWCs) and the insolvency of some employers.

So, while there are no proposals for any overnight changes, there's definitely potential for sweeping changes in the future, depending on the UK's future relationship with the EU.  Even if the UK leaves the EU on 31 January, this does not remove the need for a future trade deal, and if such a deal is negotiated it is likely to include some requirements to comply with certain EU regulations (for example GDPR and working time).

Meanwhile there is speculation that post-Brexit the government might take the opportunity to amend some areas of employment law to reduce regulatory burden on companies.  This could include amending the Agency Workers Regulations 2010; introducing a cap on compensation for discrimination similar to that for unfair dismissal; amending TUPE to make it more business friendly; addressing the issue of whether employees accrue holiday while off sick, and removing the cap on maximum weekly working hours.

In the event of a no deal Brexit the UK will lose the right to refer legal issues to the ECJ.  We do not yet know if future ECJ decisions will still be persuasive in UK courts, and it's likely that we will see a divergence between UK and EU jurisprudence.

What about data protection?

The GDPR will still apply, but the UK will become a third country to the EU.  Part of the purpose of implementing the GDPR in the UK pre-Brexit was to ensure that the UK would be able to get the relevant declaration of compatibility.  Unfortunately we are unlikely to have this by 31 January 2020.

What happens if data is processed in the UK for EU data subjects?  It may well be that this will require review.  The issues for the UK will be the same as for employers currently sharing data with other third parties outside the EU, for example the United States and the Middle East.

Data shared between the UK and the EU may also require review.  EU countries may be reluctant to share data with the UK without extra checks before the UK has received its declaration of compatibility with the GDPR.

Issues with immigration

There will be no change to the way in which EU citizens (including EEA and Swiss nationals) prove their right to work until 1 January 2021 (when there will be a new immigration system in place).  EU citizens will be able to prove their right to work as they do now.  If they have been granted status under the EU Settlement Scheme then employers can use the Home Office online service to carry out their checks (immigration status is recorded electronically under the Settlement Scheme).

If we leave the EU on 31 January, then EU citizens resident in the UK before that date will have to apply for immigration status under the EU Settlement Scheme by 31 December 2020.  If EU citizens arrive in the UK after 31 January 2019 they will be able to work for 3 months, or less, at a time without needing to apply for status.  If they want to work longer than 3 months they will need to apply for European temporary leave to remain (Euro TLR) which will last 36 months from the date leave is granted.

Applications for Euro TLR will be simple and free and will be made after arrival to the UK.  There is no need for EU citizens travelling to the UK after Brexit to make any special arrangements in advance.

Under current plans, as long as individuals have 5 years' continuous residence in the UK they will be able to obtain settled status (otherwise known as indefinite leave to remain) if they apply by 31 December 2020 (we do not know if this date will be subject to change).  We have heard anecdotal evidence of people encountering problems applying for settled status despite having proof of residence.  It may be useful for employers to consider offering their EU employees guidance and support to achieve their immigration status.

EU citizens, and their family, who have resided in the UK for a period of less than five years but would otherwise be eligible for settled status under the EU Settlement Scheme, can apply for pre-settled status, allowing them to complete the five-year continuous residence period and become eligible for settled status.

What happens if we leave with a deal?  The position will be slightly different.  Currently those EU citizens who arrive in the UK before 31 December 2020 will have until 30 June 2021 to apply to the EU Settlement Scheme to ensure they continue to have lawful status (however it may be that these dates will be subject to change under a final approved withdrawal agreement).  Those EU citizens arriving after 1 January 2021 will need to apply to the Home Office under the new immigration system.

The new immigration scheme which is due to be introduced on 1 January 2021 is not yet finalised.  The White Paper on immigration was published last year and contains the following measures:

  • EU citizens will be treated the same as those arriving from outside the EU.
  • The cap of 20,700 per year on the number of new highly skilled migrant hires from outside the EU who are paid less than £159,000 will be abolished.
  • There will be a consultation on a minimum salary requirement of £30,000 for skilled migrants seeking five-year visas (since the publication of the White Paper there has been ongoing dispute as to whether this figure should be maintained, and the government has posed several questions to the migration advisory committee, including whether salary thresholds should be regional)
  • Low-skilled workers may be able to apply for short-term visas of up to a year.

In the meantime it's worth noting that the Home Secretary, Priti Patel MP, has commissioned the Migration Advisory Committee (MAC) to consider what best practice can be learned from international comparators to strengthen the UK's future immigration system.  It has been asked to report back by January 2020.

The MAC has also been asked to consider how additional flexibility could be added to the operation of salary thresholds through the awarding of "points" to prospective migrants for the attributes that they possess, such as their educational qualifications, language proficiency, work experience, willingness to work in particular areas and occupations, and the degree to which points in one area should be "tradeable" to make up for a lack of points in another.  It has also been asked to consider which migrant characteristics should be prioritised within the future immigration system to produce the most beneficial outcomes for the UK.

How about UK citizens working in the EU?

The European Commission has asked all Member States to provide residence permits to British citizens living in their countries 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.

What about business travel?  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 the scope of the proposed activities on each trip will have to be determined, and work permissions obtained in advance if these go beyond the activities allowed for visitors.

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