Author: umar@gravitatehr.co.uk

Brexit – employer implications on the decision to leave the EU

The results of the EU referendum last month caused huge shockwaves across the country as a majority of the UK decided to leave the EU. The outcome led to upheaval in the leadership of the 2 main Westminster parties, the value of the pound and shares in the FTSE skydiving, concern and apprehension amongst businesses, oh and the small constitutional matter of another threat to the very existence of the United Kingdom with a majority in 2 parts of the UK voting to remain in the EU.

The Exit process

There is still a lot of uncertainty surrounding the exit process with the much-publicised article 50 still to be triggered by the new government which will formally start the procedure to leave the EU. It is worth noting that in the short term, it is still “business as usual”. Despite the chaotic political and economic fallout from the vote, legally nothing has changed. Therefore, it is wise, as some employers have already, to communicate to and reassure staff that there will be no immediate changes. This perhaps is most pressing for companies which employ staff from other parts of the EU.

Immigration

During the referendum campaign, there was a lot of talk from the Vote Leave camp of the introduction of a new immigration system to end the automatic right of all EU citizens to live and work in the UK. The Australian-style points-based system was mooted as a system that could be followed and there is a possibility that we may see an introduction of such a setup in the UK at some point. There remains doubt about the status of EU citizens currently living in the UK with the government refusing to guarantee their current status. Although it is difficult to envisage that we will see EU citizens already settled in the country being evicted from the UK, it is possible that EU citizens that enter the UK between now and the formal separation will not have a permanent right to live and work in the UK. Negotiations on this will take time so there are again unlikely to be any immediate changes in this area.

Employment Law

A major portion of UK employment law derives from the EU with many laws being enacted through separate acts of parliament and statutory instruments. This means that leaving the EU is unlikely to have a major impact on employment in the UK unless the government amends each individual piece of legislation. It is also worth highlighting that EU rights are essentially a minimum standard and there are some UK rights that go beyond what is required. For example, with paid holiday, the EU requirement is 4 weeks per annum while in the UK the statutory minimum is 5.6 weeks’ paid holiday per year. There is also plenty of UK employment law that is not in any way connected to the EU (e.g. unfair dismissal, minimum wage, shared parental leave and the right to request flexible working).

In conclusion, it is still early days in post-referendum UK with the dust still to settle. It remains to be seen what shape Brexit will take in the coming years as the UK enters into negotiations with the EU over the terms of the split. However, what we can say, is that we are certainly in significant times of change.

Daniel Barnett has a good article on the HR implications of Brexit.

Image courtesy of Intellectual Property Watch