Brexit: How will your business and your employees be affected?

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Thursday, June 23rd.  Whichever way your voted, this date will, along with a majority of the adult population, be etched on your mind.

Lots has been written about Brexit and the impact and effect that it will have on UK businesses, posing an endless outpouring of unanswerable questions alongside the political and economic uncertainty, and in the absence of available facts, resulting in a myriad of speculation.  That uncertainly is likely to continue for some time as we enter unchartered waters.

EU employment law by definition of our relationship with Europe, has impacted on the implementation of UK employment law; the departure of the UK from the EU will therefore naturally have an impact on how employment law is affected in the future.

Most European law comes about through directives, which in turn the UK has had to implement and which is typically done through regulations.

Whilst the EU has been instrumental in its role of shaping UK Employment Law, there has also been a significant amount of home-grown legislation which has seen employees benefitting from extended rights and further, where the UK has taken the initiative to increase the extent to which some EU employment law has been applied, for example the Working Time Regulations directive requires us to have 20 days’ paid leave as a minimum – this has been extended in the UK to give 28 days.

Another example is the extended maternity rights, which provide for a more generous paid maternity leave than is required by the EU.

It is anticipated that new laws will be added to agreements on a case by case basis and equally, a slow drip of deregulation from existing employment laws where it is considered appropriate.

One of the key areas for HR practitioners is the role of the European Court of Justice (ECJ) which is hugely influential on how employment law is interpreted and applied.

How and to what effect leaving the EU will have in reality on UK Employment Law will be closely watched and we will of course bring you up to date with any changes that will, or could, affect your business.  There are inevitably differing opinions on this, but as a general principle, the view is that ECJ judgements remain case law until the UK either repeals through new legislation or it is overturned by decisions of our higher courts.

Alongside employment law, the other significant concern that has been debated at length is the free movement of people and how this will be affected by the decision to leave the EU.  Currently, free movement and employment law continue to apply as they did pre-June 23rd.

Future immigration may be in doubt and this will remain a key focus area, determined by the agreed Brexit terms.  With just over 2 million EU nationals working in the UK and just over 1 million British nationals living in the rest of the EU, it is not envisaged that there will be change in the short to medium term.  Interestingly, the number of EU nationals employed in the UK grew by almost 90,000 in the 3 months leading up to the EU Referendum according to the latest figures released by the Office of National Statistics.

We are still awaiting confirmation on when Article 50 will be invoked, from which there will be two-year notice period, during which time the UK will have to extricate itself from the EU and configure relationships with individual member states in a bid to retain existing trade links.  Quite when that will happen appears to be up for continued debate.

For more information on how Brexit could impact or affect your business and your employees, contact us at hello@inlinehr.co.uk or call us on 01296 761940.

Referenced websites: www.xperthr.co.uk; www.cipd.co.uk

Jinny McDermott MCIPD
Director at Inline-HR Limited

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