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Employment rights in a no-deal Brexit

United Kingdom
Written by
Lewis Silkin, widely recognised as the UK’s leading specialist employment law practice.
What might a ‘no-deal’ Brexit mean for UK employment rights? What could employers do now to prepare? And what might the future hold in a no-deal scenario? With new Prime Minister Boris Johnson clear that he would be prepared to leave the EU without a deal if necessary and current legislation committing the UK to leaving the EU at 23:00 on 31 October, this article revisits the employment law implications of a no-deal Brexit. 

What could employers do now to prepare for a no-deal scenario? 

The following are the key topics to consider from an employment perspective.

Support for EU citizens 

EEA/Swiss citizens and their family members who’ve lived in the UK for five years or more can apply for ‘settled status’ under the EU Settlement Scheme to allow them to remain indefinitely. Those who have not been living in the UK for five years will be granted ‘pre-settled status’ until they have reached the five-year threshold (when they will be granted settled status). Irish citizens are not required to apply under the scheme as they are considered settled in the UK due to the provisions of the common travel area, however may do so if they wish. The third-country family members of Irish citizens should consider applying under the Scheme as its provisions are much less onerous than applying under domestic immigration laws.

Employers can continue to support affected employees by providing or signposting guidance, and telling employees to apply before 31 December 2020 instead of by 30 June 2021, the latter date being the deadline to apply in a deal scenario. Employers can also manage their recruitment pipeline to ensure that proposed new employees who wish to be eligible under the scheme enter the UK before 31 October 2019.

Support for British citizens 

The European Commission has asked all member states to provide residence permits to British citizens 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. You should seek to understand the short and longer-term requirements for residence for any British citizens working in the EU and get immigration advice as early as possible to facilitate any required applications.

European Works Councils 

Be sure to have pre-designated your new representative agent if your EWC is currently located in the UK. If your EWC is (or will become) located in another EU country, you will need to decide what to do about your existing UK representatives after Brexit (see here for the EU Commission’s latest position). If you are currently negotiating an EWC agreement, or if you have a EWC operating under the default ‘subsidiary’ requirements, consider relocating your arrangements now if you’ve not already done so.

Data protection 

If a no-deal Brexit approaches, you may need to take steps to protect data flows from the UK to the EU.

Impact on business

There are a number of legal requirements if you are considering restructuring or relocation after Brexit. The key points are, firstly, that you may need to consult on the business case for closure before any decision to close a business is taken. And, secondly, employees should be offered the opportunity to move with the business if it is relocating, subject to them being able to meet any relevant language, immigration or qualification requirements.

The day after a no-deal Brexit – what would it mean? 

Employment law 

In the event of a no-deal Brexit, the European Union (Withdrawal) Act 2018 will simply convert all EU employment law as it stands before Brexit into UK law. The Employment Rights (Amendment) (EU Exit) Regulations 2019 will make some small technical changes and introduce new provisions intended to preserve UK-located EWCs (although we don’t think the EWC arrangements actually work) but, apart from the changes made by those regulations, employment law will remain the same in the immediate term.

Business travel to the EEA and Switzerland 

The rules for British citizens travelling to Ireland will not change and they will be allowed to undertake any activity without restriction. 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 you’ll need to understand the scope of the proposed activities on each trip and obtain any required work permissions if these go beyond the activities allowed for visitors. It will also be important to calculate the time spent in the Schengen area on a rolling basis to ensure the 90-day maximum stay is not exceeded. British citizens will also need to have a passport which is valid for at least six months from the time they enter the EU. Note that some British passports are issued for more than ten years in total but only the first ten years of validity can be counted towards this six-month requirement. The government has produced a calculator that people can use to check if they have enough time left on their passport to cover a visit.

Business travel to the UK 

The British government will need to bring in new primary legislation to end the free movement of EEA and Swiss nationals to the UK, so there is likely to be a short period after a no-deal Brexit in which free movement will still apply (Irish nationals will continue to be able to undertake business travel to the UK without restriction due to the common travel area arrangements). EEA or Swiss citizens arriving in the UK between the date free movement ends and 31 December 2020 will be able to enter visa-free for up to three months and will be allowed to undertake any activities without restriction.

Right to work checks 

Employers would not be required to do any immediate right to work checks on their existing EEA/Swiss employees or their family members after a no-deal Brexit. The EU Settlement scheme will remain open until 31 December 2020 for the vast majority of applicants and, until 31 December 2020, EEA/Swiss citizens would still only need to produce a national ID card or passport as evidence of their right to work. The government has not yet issued any guidance on what checks would need to be carried out beyond 31 December 2020. In order to avoid any potential discrimination issues, employers should wait for this to be published before taking any further action.

What would the no-deal future look like? 

In the longer term, some of the potential employment implications to be ready for are set out below.

Possible divergence from ECJ case law 

Pre-Brexit decisions of the European Court of Justice will remain binding on most UK tribunals and courts, but need not be followed by the Supreme Court. New decisions will not be binding on any court or tribunal, although could be taken into account if relevant. On the whole, however, UK courts are likely to continue to respect most European Court of Justice rulings, as long as UK and EU legislation remain the same.

No new Directives 

The UK would not be required to adopt the Transparent and Predictable Working Conditions Directive, the Work Life Balance Directive, the Whistleblower Directive or any future EU directives. The UK, however, has already committed to implementing some aspects of the Transparent and Predictable Working Conditions Directive, is one of the few EU countries to already have whistleblower protection and already provides some of the rights established under the new Work Life Balance Directive. So, whilst differences in employment law could open up relatively soon, they will be quite small.

Longer-term changes to employment law 

Bigger gaps will open up if the UK government takes the opportunity to dismantle EU-derived employment laws after Brexit. Theresa May was always emphatic that her government would look to enhance workers’ rights after Brexit, not reduce them. However, the next Prime Minister may take a different stance.

Boris Johnson is reported to be keen to renounce the Working Time Directive. He gave evidence to a parliamentary select committee that it had proved too expensive to implement in the UK and it would be surprising, given the strength of his previous statements, if a Boris Johnson government made no changes whatsoever to EU-derived working time laws. However, it is hard to imagine any modern UK government ending all rights to paid holiday. Instead, we can reasonably expect the scrapping of EU rules on working time limits and record keeping requirements, but the retention of some rights to paid holiday (possibly paid at the rate of basic pay only). Similarly, some rights provided by the Agency Workers Directive could be abolished (such as the right to pay parity after 12 weeks) but limited agency worker rights are likely to remain.

In the longer term, if a Conservative government remains in power, we might also expect to see collective redundancy consultation being abolished or made less onerous and the restrictions on changing terms after a TUPE transfer being lifted (although we are unlikely to scrap TUPE). Previous governments have explored whether discrimination awards could be capped (for example at one or two years’ pay) but this was problematic under EU law. Capping discrimination awards is unlikely in the short term, not least because of the #metoo movement, but it could come back on the table at a later date.

Ultimately, the UK faces the same challenges as any other modern economy: how to regulate the increasing volume of platform and contingent working and respond to the impact of demographic and technological change on the workplace. The UK’s withdrawal from the EU will mean that the UK will need to find its own regulatory solutions to these challenges.

New immigration requirements 

EEA/Swiss citizens arriving after the date free movement ends would need to apply under the new European Temporary Leave to Remain immigration category if they intend to stay for more than three months. This would provide permission to stay in the UK for up to three years. Anyone wishing to stay longer will be subject to the requirements of the post-Brexit immigration system that will operate from January 2021. The details of this system are not yet final and the government is currently consulting on them. If Boris Johnson becomes prime minister, the new system could possibly depart from the proposals put forward in the government’s immigration white paper, for example by incorporating some new Australian-style points based categories.

Discrimination rights 

Finally, remember that UK law prohibits workplace discrimination on grounds of nationality and national origin. In the (hopefully unlikely) event of any EU citizen experiencing abuse or harassment in your workplace, you would need to be ready to respond under your anti-harassment policies. You may want to check that they already cover nationality as well as race.

Interestingly, UK equality legislation goes further than EU minimum requirements in explicitly preventing nationality discrimination in the workplace. This is one of a number of instances where UK law actually provides more rights than the EU minimum, and illustrates that, although the UK may dismantle some EU-derived employment rights following a no-deal Brexit, there are still likely to be areas of employment law where the UK goes further than the EU.

Russell Brimelow
Russell Brimelow
Partner - United Kingdom
Lewis Silkin
Andrew Osborne
Partner - United Kingdom
Lewis Silkin
Jo van der Spiegel
Managing Practice Development Lawyer - United Kingdom
Lewis Silkin
Kathryn Denyer
Associate - United Kingdom
Lewis Silkin