20 Nov

What employers need to know as Brexit looms

The following article was first seen in ABTA's Travel Law Today Autumn 2018 edition and written by Rebecca Thornley-Gibson, Employment Partner, Ince & Co. 

Clarity on the status of EU legislation has been provided by the European Union (Withdrawal) Act 2018, which will repeal the European Communities Act 1972 and ensure all existing EU laws will be converted into domestic law. Parliament will subsequently decide whether to retain, amend or repeal employment legislation. The Government further confirmed on 23 August 2018 in one of its 25 ‘no-deal’ guidance documents entitled ‘Workplace rights if there’s no Brexit deal’ that whilst minor amendments may be made to the language of employment legislation to reflect the UK’s exit, no policy changes will be made.

Secretary of State for Exiting the European Union, Dominic Raab, said: “The technical notice on workplace rights explains the steps we are taking to transfer all EU legislation into UK law in time for exit, so workers will continue to be entitled to the rights they have now, such as flexible working or parental leave. In many areas we already go much further than the EU.” 

The two main impacts in a no-deal scenario for workers cover insolvency protections and continuing arrangements with European Works Councils.

Employees who work in EU countries whilst employed by a UK employer may not be protected in the event of the insolvency of their employer. Currently, in the UK, employees are protected under the Employment Rights Act 1998 and the Pensions Schemes Act 1993, which implement the Insolvency Directive (Directive 2008/94/EC) and UK employees working in an EU country are protected by the relevant laws of that country. In a no-deal scenario UK and EU employees working outside the UK in an EU country for a UK employer may still be protected under the national guarantee fund established in that country. However, there are variations in how each EU country has implemented the guarantee and these may not match current protections in the event of an employer’s insolvency.

Current European Works Council legislation allows employees to request that their employer establishes a European Works Council (EWC) to provide information and to consult with employees on issues affecting employees across two or more European Economic Area states. Under the framework that applies to EWCs, a reciprocal agreement from the EU would be necessary for them to continue to function in their present form within the UK. Although the recent technical notice has advised that in a no-deal scenario the Government will ensure the enforcement of the framework, there will still be implications for UK businesses and trade unions regarding existing EWC agreements and functionality. UK companies with EWCs should review agreements in the event that reciprocal arrangements between the UK and the EU are not successfully negotiated.

So, if there are limited employment legislative impacts does this mean employers can cross employment issues off their Brexit to-do list? Unfortunately not. Taking a back seat in how Brexit will affect workers does not make good business sense. One of the key issues facing employers is determining the right to work for existing and future workers. In December
2017 an agreement on citizens’ rights of residence was reached enabling European nationals to remain in the UK and UK nationals who are living in Europe to remain in those respective countries. However, a registration process must be completed in order for individuals to continue to reside, and therefore work, in the UK.

The registration process will require those who have been in the UK for five years or more to apply online for settled status. Those who have been in the UK for less than five years will need to apply for pre-settled status. It is anticipated that many registrations will be straightforward requiring an individual simply to prove their identity and show they are eligible for either settled or pre-settled status by providing their National Insurance number or further supporting documentation. However, the applications will require checks on criminal convictions and serious and persistent offenders may be refused settled status. Individuals will also be required to pay a fee. Many employers are supporting their workers with these applications.

Employers need to be aware of the settled status processes in order to minimise the risks of employing illegal workers. Employers should take steps to audit their workforce and determine who will need to make the settled status applications. Communicating effectively with workers who will be affected by the changes will ensure applications are made in good time and give workers confidence in the support provided by their employer. It will also minimise any issues with travel and freedom of movement post Brexit. Gathering information about employees, such as an individual’s nationality, what they do within the business, their start date with the business, contract details and the length of residence in the UK will provide the key information on whom employers need to prioritise in providing Brexit support.

Assisting workers with the settled application process should be considered and this may include providing expert help with applications, time to deal with the applications or providing access to materials such as the UK Visas and Immigration toolkit relating to Brexit.

Employers should also consider factoring into HR budgets the cost of relevant licenses to hire European migrants, potential certificate or sponsorship fees and the Immigration Health Surcharge and Skills Surcharge.

Whilst no one can be certain of what final deal will be reached with Europe in the coming months, keeping individuals informed and providing support to anxious workers about their employment positions will boost confidence and minimise the risks of illegal working.