Brexit: 10 steps for employers to take now

Following the vote in favour of Brexit on 23 June,  there is uncertainty as to what comes next.  Much will depend on who replaces David Cameron and what the government’s Brexit strategy will be, how and when Article 50 of the Lisbon Treaty is invoked to trigger the formal exit process, and how the EU approaches the negotiations with the UK.

In the meantime, there are no immediate changes to employment or immigration law as a result of the UK’s decision to leave the EU, so it is business as usual for now, although organisations should address the immediate after-effects of the referendum result and take steps to facilitate changes that may become necessary in the longer term.

Below are 10 STEPS FOR EMPLOYERS TO TAKE NOW.  You can also click here to listen to our recent webinar considering the implications of Brexit on your workforce and HR legal strategy.  Click here to access the webinar materials.

  1. Manage the uncertainty which the Brexit vote may have caused among the workforce, both in the UK and internationally.   Where possible, continue to reassure staff that there will be no immediate impact and that any change in the longer term is likely to be informed by the new relationship between the UK and the EU.   However, don’t make promises that you may not be able to keep.
  2. In view of the reported increase in incidents of racial abuse across the UK in the wake of the referendum,  remind staff of the business’s policies on diversity and dignity at work. Make it plain to all staff that discrimination and harassment will not be tolerated on any grounds, including on the basis of nationality or national origins (or in any other way on grounds of race).  There may also be divergent political views relating to the outcome or impact of the referendum, so you may also want to remind employees of the importance of tolerance and respect of others’ views in the workplace.   This may also be a fitting time to remind managers of the importance of dignity at work policies and briefed on how to deal with any incidents or concerns.
  3. If your business is considering organisational change as a result of the Brexit vote, normal employment law rules and protections will apply if there are, for example, consequent closures, reductions in force, changes to terms, relocations or business transfers.  Current employment law, EU derived or not, remains in place for the time being and there are no special rules or exceptions for Brexit related activities.  Should job losses be necessary,  selection criteria must be objective and not based on nationality.   Equally, where British nationals are affected by the relocation of jobs abroad, don’t assume that they will not want to consider transferring to the chosen location.
  4. Audit the immigration status of your workforce in the UK and across the EU.   While the rights of EU citizens to live and work in the UK and converse rights of UK citizens following the UK’s exit from the EU are currently unclear, an audit will enable the business to identify who may be affected if and when the current immigration rules do change.   It will also help to identify staff who might be able to secure rights to work in a jurisdiction if they transfer now to a different contractual arrangement or apply for an alternative immigration status.
  5. Where employees have been seconded from the UK to other European countries or vice versa, review the terms of the arrangements and any associated mobility policies to understand how these might be affected when the UK leaves the EU and to ensure that they are flexible enough to adapt to the change in circumstances if necessary.  Equally, ensure that any contracts that are entered into now provide suitable flexibility in anticipation of possible changes that may need to be made because of Brexit.   Staff based overseas who are paid in sterling will be affected by the drop in value of sterling, so consider whether you are obliged or prepared to agree any change in approach should you receive requests from affected employees.
  6. Discuss with relevant stakeholders the business’ approach to the implementation of the EU General Data Protection Regulation (GDPR), which comes into effect in May 2018 (likely to be before the UK exits the EU).   The timing has led to questions about the need for compliance in the UK, but the UK’s Information Commissioner has said that UK businesses should expect to comply with standards equivalent to those under the GDPR to enable them to transfer data around the EU for business purposes.
  7. Watch for announcements on the likely impact of Brexit and the change in government leadership on domestic UK employment legislation, such as tribunal reform and family leave for grandparents both of which may be delayed by the inevitable burden which Brexit will place on the Civil Service.  However, we understand that the new rules on mandatory gender pay reporting are expected to be implemented, although the timetable may be slightly delayed.
  8. Audit European Works Council (EWC) arrangements which might be impacted if, for example, the relevant EU legislation no longer applies to the UK;   where the EWC has been established on the basis of central management situated in the UK;  or if discounting UK employees means that the numbers in the EU workforce fall below the threshold at which an EWC is required.  Businesses with an EWC should monitor for potential changes to the relevant regulations and, taking account of the terms of their own EWC agreement, should consider and plan accordingly.
  9. Be aware that UK employment laws derived from EU legislation are unlikely to change any time soon.   The future of our employment landscape will depend on the deal that the UK negotiates with the EU.  Access to the single market may require the UK to sign up to EU social and employment policy including employment directives and regulations, in which case little if anything will change.    Alternative models are of course possible which may provide the UK with more flexibility to change more contentious areas of law such as the rules relating to working time / holiday pay and TUPE, but we do not expect any major changes any time soon.
  10. Keep a watching brief on Brexit developments and how they may impact your business to enable you implement and adapt plans accordingly.

DLA Piper’s Employment Group will be closely monitoring Brexit related matters and will keep you fully up to date on important developments via regular bulletins which will be accessible through Be Aware.