Brexit update – the employment law implications for employers in the United Kingdom
The UK will be leaving the EU on 31 January 2020. From 1 February a post-Brexit transition period will run until 31 December 2020. The transition period could be extended for up to one or two years by a decision of the joint UK-EU committee, although the UK government has declared that there will be no extension beyond 31 December 2020.
During the transition period most EU law will continue to apply to the UK, and most references to EU member states in EU law will include the UK.
But what does this mean for UK employment law?
No overnight changes
The UK Parliament has made a range of legislative provisions for the UK's withdrawal from the EU. They maintain continuity of employment legislation so current employment rights will continue during the transition.
The UK Government's intention is to protect and enhance workers' rights after Brexit, and it proposes a new Employment Bill. As the Bill has yet to be published it's hard to know exactly what it will contain, but we expect:
- it will contain measures to provide a right for all variable hours workers to request a more predictable contract,
- it will extend redundancy protection to prevent pregnancy and maternity discrimination,
- it will create a new right to neonatal leave and pay, and
- it will make flexible working the default position unless an employer has a good reason not to grant such an arrangement.
ECJ Case law
The Government will have the power to make new regulations that certain lower courts and tribunals will not be bound by ECJ cases, or by existing domestic case law on EU-derived rights. This could be applied to Employment Tribunals, which might affect rights under the Working Time Regulations, for example.
New Trade Deal?
So, while there are no proposals for any overnight changes, there could be changes in the future. Much will depend on the UK's future relationship with the EU. In particular, we wait to find out the nature of a future trade deal with the EU, and how much regulatory alignment with EU law will be required.
Crystal ball gazing?
If there is no or limited regulatory alignment in a new trade deal, there is speculation that the UK government could 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.
This is speculative at the moment.
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 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? The issues for UK businesses 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. Extra precautions and security measures will be required to protect the data and ensure lawful processing.
Data sharing between the UK and the EU may also require review. EU and UK businesses who are sharing data should be able to agree mutual security and processing agreements, based on the on the implementation of the GDPR, but these will need to be set out expressly.
Issues with immigration
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. Failure to acquire settled status before 30 June 2021 will render people "illegal immigrants" and they will be subject to removal from the UK. 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 but we expect it to contain 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.
How about UK citizens working in the EU?
Although the European Commission has asked all Member States to provide residence permits to British citizens living in their countries at the date Brexit occurs, 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? 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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