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Brexit implications for employment
10th Dec 2020
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Brexit implications for employment - Linkilaw Solicitors
Linkilaw Solicitors
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Britain’s decision to leave the EU raises important questions for both employers and employees on how their rights and obligations will be affected. During the current transition period, employment rights derived from EU law continued to apply.

The government has also made it clear that regardless of the UK’s future relationship with the EU, all existing worker rights will be entrenched into British law.

However, it is important to understand that the government may choose to modify these laws in the future, and any EU laws introduced post-transition will no longer apply in the UK. In this briefing note, we consider which areas of employment law are likely to change and how businesses can plan ahead for the future.

What are the Brexit implications on employment?

Discrimination law

One area that is likely to be reformed is discrimination compensation. At present, all claims for discrimination and harassment are uncapped under the Equality Act (2010).

However, in the past few years, the Courts have become more conscious of the employer’s need to engage in cost-cutting measures. This is particularly relevant during the current global crisis following the outbreak of Covid-19. Thus, there has been greater support in favour of discrimination compensation cap to be re-introduced.

From a business perspective, this will bring greater certainty on the maximum level of liability employers can expect. After the end of the transition period, the UK will no longer be influenced by the decisions of the European Court of Justice, therefore this proposal is likely to gain momentum in the upcoming year.

Working Time and Agency Workers Regulations

UK employment law provisions that are derived from EU law, but are implemented in the UK through Regulations, are also likely to see significant change. For example, the Working Time Regulation (1998), which dictates minimum health and safety requirements with regards to employee working hours. Namely, working hours (including overtime) should not exceed 48 hours a week, those who are on call for more than 6 hours are entitled to breaks and many others.

However, this regulation has received considerable criticism in the UK, and it is probable that following Brexit, its operation in the UK may be weakened. Employers may wish to adopt a ‘wait and see’ approach and defer upcoming hires, if there is a possibility that businesses would not be required to comply with these protective measures after the transition period.

If you are a hirer of an agency worker, you should also consider how changes in the Agency Workers Regulations (2010) will impact your business operations. Although the regulation is not embedded into UK employment law, it has been strengthened following Brexit.

The UK Government has abolished the ‘Swedish derogation-style’ arrangement, meaning that all agency workers who have undertaken their role for more than 12 calendar weeks are entitled to the same employment conditions, as directly hired employees. Employers should think about what percentage of their workforce do agency workers make, what positions they occupy and how long do they work.

Interview to man - Brexit implications for employment

European Works Councils

An area of employment law that is likely to see a more immediate impact is the functioning of European Works Councils (EWCs). These are company-based institutions that represent the interests of European employees at multinational corporations. Their aim is to ensure that such workers take part in company management decisions at the European level and are informed of any upcoming changes to their working conditions.

The difficulty is that EWCs are not governed by UK law and thus, in the event of a no-deal Brexit, UK employees will no longer be able to have seats on those councils. If this is something your business is likely to be impacted by, taking proactive steps by relocating UK-based EWCs to another EU Member States will help minimise disruption.

Employment Contracts

Importantly, many of the employment rights mentioned above would have been written into employment contracts and company policies in accordance with the EU law. If after the transition period, these laws are either modified or even repealed, your employment contracts need to reflect that.

Furthermore, any variation or revocation of contractual rights should be clearly communicated to your employees, stating the reason for change and consulting employees on other available alternatives. Businesses and their HR departments have to constantly monitor Brexit-related employment changes to make sure their contracts operate within the legal framework.

Conclusion

At present, there is still a lot of uncertainty on how employment law will be shaped from 1 January 2021. To a large extent, this will depend on how the UK-EU relationship develops in the future and whether a deal is agreed.

At Linkilaw Solicitors, we advise our clients on a wide range of legal matters; including discrimination issues, employment agreements and evaluation of regulatory risks. If you require further assistance on Brexit implications for your business, don’t hesitate to schedule a call with one of our legal specialists.

Our legal commentary is not intended to be a comprehensive review of all developments in the law and practice. Please seek legal advice before applying it to specific issues or transactions.

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