Brexit: what are the consequences for employers?
Following the UK’s departure from the EU on 31 January 2020, this article asks what this means for employers in the transition period and beyond.
On 31 January 2020, the United Kingdom left the EU following ratification of the withdrawal agreement. Now begins a transitional period, lasting until 31 December 2020, during which European Union law continues to apply. This period can be extended once for a maximum of one to two years, but the extension must be accepted by common agreement before 31 July 2020 and the British Government appears to have excluded this possibility for the moment.
This transitional period does not put an end to uncertainties over the law that will apply in future to relations between the EU and its member states and the United Kingdom.
As a number of companies are announcing that they will repatriate production to France to deal with management difficulties relating to subcontractors in the UK, the question arises of what legal impact Brexit will have on employment relations.
The status quo continues for the time being
- The rights that currently apply within the EU, i.e. the free movement of workers, employment obligations and terms and conditions of employment (in particular working hours) will continue to apply in the UK during the transitional period until 31 December 2020. Similarly, the obligations on employers posting employees to the United Kingdom or vice versa remain the same. The coordination rules relating to social security regimes will also continue to apply.
- European Works Councils will continue to operate until the end of the transition period.
- The provisions of the GDPR will also continue to apply protecting employees’ personal data in the United Kingdom until 31 December 2020. This means no additional formalities or guarantees are required for the transfer of data to the UK for the time being.
What about the application of EU laws adopted after 31 January 2020?
According to the withdrawal agreement, the UK remains bound by any new rules as well as by EU case law adopted up to 31 December 2020. After 31 December 2020 (or the end of the transitional period if later), EU rules will no longer automatically apply, and the British Government has already indicated that it does not wish to align itself with EU law. It has refused to implement directives for whose implementation limit dates expire after the transition period as it is currently foreseen.
December 2021 for the whistleblower directive (Directive 2019/1937 of 23 October 2019 on the protection of persons who report breaches of Union law);
August 2022 for:
- The work-life balance directive (Directive 2019/1158 of 20 June 2019 on work-life balance for parents and carers); and
- The transparent and predictable working conditions directive (Directive 2019/1152 of 10 June 2019 on transparent and predictable working conditions).
It is likely that at the end of the transition period:
- Most texts derived from EU law will be ‘converted’ into English law in the UK.
- The decisions of the European Court of Justice may influence the British judiciary but they will no longer be binding on it.
- European Works Councils will need to review the designation of representatives for British employees and their modus operandi if it involved the UK.
Negotiations between the EU and the UK currently cover different economic sectors of activity, including transport, security, research, education, energy and fisheries. However the European Union has made known its desire to link the protection of employee rights with facilitated access for the UK to EU markets.
Many uncertainties remain about how labour and immigration law, will apply to French employees living in the United Kingdom and to British employees living in the United Kingdom, but employers in the United Kingdom are already being asked to encourage employees concerned to anticipate the need for a residence and work permit, to avoid finding themselves unable to work and reside legally in the absence of a negotiated agreement between the United Kingdom and the European Union at the end of the transition period.
The difficulties experienced in identifying and enforcing the current ‘settled status’ system (permanent resident status for European nationals and members of their families resident in the UK; its beneficiaries will be allowed to continue to work, study and access social benefits and services under the same conditions as currently) for EU nationals living in the United Kingdom (an estimated 3.7 million) illustrate the complex and numerous impacts Brexit will have.
KLIEMT.Arbeitsrecht is a member of Ius Laboris, an international alliance of leading law firms providing specialised services in employment law.