With the UK’s potential withdrawal from the European Union (EU) fast approaching, there continues to be uncertainty surrounding Brexit and its implications for employers and employees. Any changes are likely to depend upon the state of the UK’s relationship with the EU and any agreements that may be reached.

What changes will there be to employment law?

A significant amount of UK employment law comes from the EU, for example working time protection, paid holiday entitlement, parental leave rights, part-time worker rights and agency worker rights. As EU legislation has been transposed into UK legislation, these laws will continue to have statutory effect in the UK after exit day irrespective of whether the UK leaves with or without a deal.

Most EU-derived employment legislation will continue to remain in force for an indefinite period, unless and until altered by Parliament.

In some cases, the UK has deliberately provided protection for workers which exceeds the EU minimum, for example the right to 5.6 weeks’ holiday (rather than the EU four-week minimum) and 52 weeks’ maternity leave (rather than the EU minimum of 14 weeks).

We also have many employment rights, including unfair dismissal, flexible working and the minimum wage which do not stem from the EU.

The government has said that it remains committed to ensuring that workers’ rights remain aligned with EU employment protection, even after withdrawal. We are therefore not going to see a wholescale change of employment legislation. Over time, and dependent on who is in power, there may be some unpicking of EU derived law that has proved to be more unpopular with employers and business groups. For example,

  • Holiday – there may be aspects that the government might want to amend, for example it might want to limit the right to keep accruing holiday while on sick leave and exclude payments such as commission and overtime from holiday pay calculations.
  • Working time – we know that the UK government negotiated the opt-out to the maximum 48-hour working week, however the government may want to remove the cap altogether.
  • Collective redundancy consultation – collective consultation periods were reduced by the last government, so there might not be any appetite to make further changes. Although, it is possible that consultation obligations could be watered down further or done away with, particularly as employees arguably do not feel strongly about this right. However, Trade Unions would be likely to strongly oppose any changes.
  • Agency workers – the right of agency workers to the same basic working conditions as equivalent permanent staff after 12 weeks was not popular with government at the time of its introduction. Some commentators have identified this as a candidate for change. However, the government has not thus far indicated this to be the case. Indeed, under the government’s Good Work Plan, following the recommendations of the Taylor review, it proposes to strengthen agency workers’ rights.
  • Discrimination – as is the case for unfair dismissal compensation, a cap may be placed on discrimination compensation. This is not currently permissible under EU law.

Free movement of workers

What may be of bigger concern to some employers is the position on freedom of movement of workers. There are currently large numbers of EU nationals living and working in the UK. Whilst, Brexit negotiations are ongoing, employers can still employ EU nationals. What the position will be post Brexit depends to some extent on whether we leave with an agreement in place.

If the UK leaves with a deal

If we leave with a deal, it has been agreed that:

  • There will be an “implementation period” from the date of Brexit to 31 December 2020, so that new methods of working can be introduced on a gradual basis to minimise disruption. During this period free movement will continue, albeit that EU nationals arriving during the implementation period and intending to stay longer than three months must register. Those EU citizens and their families already legally residing in the UK can continue to do so.
  • Settled Status – EU citizens who have resided lawfully in the UK for five continuous years by 31 December 2020 will be able to apply for “settled status” to stay indefinitely under the EU Settlement Scheme. They will need to do this, even if they already have permanent residence documents; indefinite leave to remain will be automatically conferred to them. The EU Settlement Scheme opened on 30 March 2019. Obtaining settled status will show employers that the EU citizen has ongoing rights to live and work in the UK, irrespective of any immigration controls introduced after Brexit.
  • Pre-settled status – For those EU citizens who have resided lawfully in the UK for fewer than five years by 31 December 2020, they will be entitled to apply for “pre-settled status” under the EU Settlement Scheme until they acquire the necessary five years’ continuous residence to apply for settled status. This means they will be able to continue working until they have reached the five-year point. As with settled status, pre-settled status will demonstrate to employers that the EU citizen has permission to continue and live in the UK legally.

The deadline for applying for both settled and pre-settled status is 30 June 2021. Failure to acquire settled status before this date will render people illegal immigrants.

Employing illegal workers is a serious issue for employers, with significant civil and criminal liabilities. Therefore, employment checks will be important.

If there is no-deal

Notwithstanding the no-deal situation, the EU Settlement Scheme still stands. However, there are some important modifications.

The government will seek to end free movement as soon as possible. Although, the government has agreed to protect the rights of EU nationals and their family members living in the UK by exit day.

As there would be no agreed implementation period, the EU Settlement Scheme would only be available to those EU nationals living in the UK by exit day and they would only have until 31 December 2020 to apply for status.

The recruitment of EU citizens who are not resident by exit day, will be more complicated, with both a new system of European Temporary Leave to Remain and a skills-based immigration system which will come into play. EU nationals will be able to come to the UK for up to three months without applying for immigration status or a visa.

What does this mean?

In terms of employment law, even in the event of a no-deal Brexit, there are unlikely to be far-reaching changes, so employers will not have to adjust their practices, at least in the short and medium term.

However, given the changes to the immigration rules post Brexit, employers will be required to undertake more rigorous checks on the right to work.

What do businesses need to be doing?

Employers should consider carrying out an audit of their workforce as soon as possible to identify which employees may be impacted by the post-Brexit immigration regimes. Employers who employ EU nationals might want to make them aware of the general changes and, where relevant, the possibility of applying for status under the EU Settlement Scheme prior to Brexit.

Contact our Employment team for more information