Donald MacKinnon

The UK Government has been focusing its efforts on Brexit negotiations for more than two years, yet a ‘no deal’ scenario is very much a possibility. The protracted talks have also weakened Theresa May’s position and with speculation rising, Boris Johnson may launch a leadership bid.

As 29 March 2019 – the day when Britain officially leaves the EU – draws ever closer, Downing Street has now published a technical note on workers’ rights, advising employees and employers alike that there are no expected financial implications or impacts in the event of a no deal scenario.

There are two exceptions, both of which are likely to be relatively uncommon:

- If a UK employer in an EU country became insolvent, whether its UK and EU employees would be protected by national guarantee funds would depend on the country they were based in.

- No new requests to set up European Works Councils, used by UK employees in multinational companies to represent their interests, could be made.

At present, a number of employment rights are already enshrined in UK legislation, such as the Equality Act 2010. When the UK leaves the EU this Act, along with many others, will be updated to reflect the new legislative structure. Those which come directly from EU legislation will become part of UK law through the EU (Withdrawal) Act 2018. This includes the Working Time Regulations, family leave entitlements, the TUPE regulations and protections for agency workers. This should come as no surprise given Theresa May’s promise to protect existing rights. It seems, therefore, that at least whilst Theresa May remains Prime Minister, the full suite of workers’ rights currently enjoyed in the UK will continue to apply.

The question remains, however, whether there will be changes under a different Prime Minister and beyond. Broadly speaking, EU employment law can be divided into three categories; employment and labour laws (including parental leave and agency worker rights) health and safety at work laws, (including the Working Time Regulations) and equality and non-discrimination laws (including the protection of part-time and fixed-term workers). Theoretically, the current protections found in legislation could be scrapped through a Parliamentary vote whilst those that stem from decisions made by the European Court of Justice would no longer have to be followed.

In reality, it is unlikely that the government would make largescale changes, not least because this would be disruptive to businesses. It is impossible for us to know the extent to which these rights would exist in the UK had it not been for its membership in the EU. Certainly, prior to EU legislation, the UK had high standards of health and safety law. Additionally, the UK Government extended the annual leave allowance in both 2007 and 2009 without input from the EU. Numerous reviews conducted by the government have also shown that EU legislation is in fact broadly beneficial for both businesses and employees, making revocation and repeals undesirable.

However, there is likely to be room for the government to make piecemeal changes to address some of the fringe issues that are more onerous upon employers. Due to the impact they have had on businesses, some areas that may be ripe for change include the calculation of holiday pay, compensation limits in discrimination cases, collective redundancy consultation and on-call time.

Whilst the Government has addressed workers’ rights in a no deal Brexit, it has yet to comment on how this might affect EU citizens currently working and residing in the UK. It has been reported that this will be addressed in a different technical note. However, leaked documents indicate that existing EU residents will be offered the opportunity to remain. This would effectively require the UK Government to unilaterally implement the immigration element of the citizens’ rights agreement, previously agreed with the EU at the end of last year.

Even if a no-deal Brexit can guarantee workers’ rights in the short term and the right to remain for EU citizens, HR managers should still consider how this might affect their organisations. For example, it will likely become more difficult to persuade talented individuals from abroad to come and work in the UK. Larger companies may move their HQ to another EU office, not least because the UK would no longer be an adequate country under the GDPR. Additionally, the need for UK nationals to obtain a Schengen visa would undoubtedly lead to delays in the completion of cross-border projects.

Whilst the Government has made assurances that a no-deal scenario is unlikely, there is an increased likelihood of this as the leave date draws closer and businesses would be wise to consider contingency plans so they are not caught off guard.

Donald MacKinnon is group legal director at health and safety, human resources and employment law advisor Law At Work.