Brexit: What Does it Mean for UK Employment Legislation?

The UK is now only weeks away from formally leaving the European Union (EU) on the 29 March 2019.
 
Whether the UK can depart from current EU employment legislation requirements in the future will depend on the UK’s future relationship with the EU. Alternative trade arrangements may involve accepting some, or all, EU employment legislation.
 
Even if the UK has the opportunity to diverge from EU employment law, changes may not necessarily be immediate at the point of Brexit, for the following reasons:
 

  • Much of EU employment law has been brought into effect via UK legislation, which will remain in force post-Brexit, unless and until amended or revoked.
  • Many employment rights, including unfair dismissal and the minimum wage, do not stem from the EU, so no changes are expected.
  • In other cases, the UK deliberately provides protection which exceeds the EU minimum. Prime examples being maternity leave and the right to 5.6 weeks’ holiday (as opposed to the EU 4 week minimum). Withdrawal from the EU is therefore unlikely to prompt a change to government policy in these areas.
  • Although post-Brexit UK courts and tribunals would not refer cases to the European Court of Justice or be obliged to follow new decisions from that court, it’s less clear how they would deal with existing UK case law stemming from EU decisions. High profile examples include sickness absence and holidays and the inclusion of certain payments in holiday pay. It’s likely that tribunals would continue to apply the previous decisions of a higher UK court unless, or until, that higher court or Parliament took a different approach.
  • Employers’ internal policies and even contracts of employment often reflect certain EU rights relating to, for example, working time, sickness absence and equal opportunities. Reducing entitlements could be difficult both from a legal and employee relations perspective.

 
There are currently no set changes in legislation in relation to Brexit but, purely speculatively, the government may take the opportunity to amend some areas of employment law to reduce the regulatory burden on employers, including:
 

  • Amending or repealing the Agency Workers Regulations 2010.
  • ​Introducing a cap on compensation like that for discrimination for unfair dismissal.
  • Amending TUPE to make it more business friendly (for example, by making it easier to amend terms following a TUPE transfer).
  • Addressing the question of whether employees accrue holiday while off sick.
  • Removing the cap on maximum weekly working hours.

 
We will have to wait and see what develops. 
 

Free movement

Free movement does however need to be considered by UK businesses. Plans have been set for a new UK immigration regime after Brexit, declaring an end to preferential access for EU citizens to Britain’s labour market and significant curbs on the entry of low-skilled migrants.
 
Announcing the biggest changes to immigration rules for a decade, the Prime Minister Theresa May said that from January 2021, an overhauled regime would mean it was “workers’ skills that matter, not where they come from”.
 
After a proposed Brexit transition period, all migrants planning to live and work in Britain would have to demonstrate they are sufficiently skilled by meeting a minimum salary threshold.
 
The largest change for EU citizens working in the UK will be the ability to apply to the EU Settlement Scheme to be able to continue living in the UK after 30 June 2021.
 
The EU Settlement Scheme will open fully by 30 March 2019. The deadline for applying will be 30 June 2021.
 
On 21 January 2019, the Prime Minister announced that there will be no fee when the scheme opens fully on 30 March 2019. Anyone who has applied already, or who applies and pays a fee during the test phases, will have their fee refunded. Details of the refunds process are due to be published shortly.
 
If a person applies now, the fee (which will be refunded) is:
 

  • £65 if you’re 16 or over
  • £32.50 if you’re under 16

 

A person will not need to apply if:
 

  • they’re an Irish citizen – their family members from outside the UK or Ireland will still need to apply
  • they have indefinite leave to enter the UK
  • they have indefinite leave to remain in the UK

 
A person can apply if they already have indefinite leave to remain in or enter the UK, but they do not need to.
 
Their family members from outside either the UK or Ireland will still need to apply even if that person does not need to.
 

What should you do next?

It is prudent that you understand who in your workforce will require settlement status. Once identified you can make contingency plans:
 

  • should your workers decide to leave the UK;
  • should you have a large migrant workforce and rely on future similar recruitment; and/or
  • ​should workers not be given settled status

 
Contact the Alcumus PSM HR team for advice on any of the above by emailing office@alcumusgroup.com.
 
Alcumus PSM (People & Safety Management) specialises in human resources (HR) and health and safety (H&S) consulting for small and medium-sized enterprises.
 
Find out more about the settled status fees.
 
Written by Anil Champaneri and Mel Darlington, Senior HR Consultants