Brexit for employers: what are the key employment issues for HR to deal with now?

Published on 28th Jun 2016

The repercussions of the shock referendum result last week are still in hot debate. Whilst it may be some time before we have any clarification on how the landscape of post-Brexit UK will look for employers, in the meantime, it is more important than ever to maintain business as usual. Significant changes to employment laws are unlikely in the short-term, as we discuss here; but there is action that can be taken now to help keep your business on course.

We look below at the immediate issues and questions for HR to tackle.

1. No change to free movement of workers for the time being

The UK is still a member of the EU. Until that changes, UK citizens can still travel and work in other EU member states and citizens of other EU member states can travel to and work in the UK. There has been much in the press surrounding the operation of Article 50. However, regardless of when and how Article 50 is triggered, it is not that trigger itself which sends the UK out of the EU, there still follows a period of negotiation until a formal exit is completed. Only at that exit point may we see changes to free movement of workers – and even then, depending on the deal reached, those changes may mean no change in practice for those from the EU already living and working in the UK.

Employees from other EU member states can therefore be reassured that they will not imminently be sent home. Likewise, there is no reason for UK citizens working in other EU member states to feel they must return immediately to the UK.

However, employers would be sensible to audit their workforce across all jurisdictions to identify those who may be “at risk” from changes to free movement into and out of the UK down the line. It may be that some employees will be entitled to apply for citizenship in the UK, or as appropriate, their current country of work and will look to HR for assistance in understanding their rights.

Our immigration team tackle the possible immigration issues in their blog here.

2. Recruitment and promotion should not penalise EU citizens

With Brexit in the forefront of employers minds, it may be tempting for UK employers to start focusing their recruitment and promotion opportunities on UK citizens only. However, all employers in the UK are subject to the Equality Act 2010, which expressly provides that job applicants must not be discriminated against on a number of protected grounds, including “nationality”. An employer who seeks, in their recruitment decisions, to pre-empt any potential future legal restrictions on the rights of EU citizens to work in the UK post-Brexit, would fall foul of our discrimination laws. Indeed, it is worth remembering that even if restrictions on EU citizens coming to work in the UK are imposed post-Brexit, rejecting a candidate on the basis that they would be unlikely to meet those requirements would still be unlawful.

Likewise an EU employee should not be “first out”

Similar considerations apply when employers are contemplating redundancies. Making any “EU” employees from outside the UK redundant first, on the basis that their continued employment may, in the long-term, be subject to more costly immigration restrictions, will again fall foul of the UK’s Equality Act 2010, prohibiting discrimination on grounds of nationality.

3. Managing any talent drain: communicate and anticipate

Employers may concerned that they could lose talented EU national staff in the midst of such uncertainty. Employers can play a key role in ensuring that the UK remains an attractive place for talented employees to work – providing reassurance and keeping affected employees updated as negotiations unfold. However, employers must take care not to positively discriminate in favour of affected EU workers, as this could expose the employer to discrimination claims from UK employees.

Employers must also anticipate where pinch-points sit in their workforce. It may be that no amount of reassurance will prevent an individual moving to a new role within another EU country. Anticipating where gaps may be left and having a plan in place to fill them will be critical to business continuity.

4. Ask employees to leave Brexit-banter at home

It is clear that many people are passionate about the positives and negatives of the UK leaving the EU, and this results in heated debate and employees sharing heart-felt convictions. Discussing Brexit is difficult without addressing the arguments that have been raised about immigration. Whilst most employees will not be engaging in racist behaviour, a more likely problem is the politics of immigration resulting in a complaint of harassment from a non-British worker. If discussions create an ‘intimidating, hostile, degrading, humiliating or offensive environment’, this could be harassment on the grounds of nationality or national origins, for which the employer can find itself liable.

Employers must remain alert to the potential for Brexit-banter to turn into unacceptable and potentially discriminatory behaviour and if a problem is identified, employers should remind their employees of the standards of conduct expected of them.

And this is not just an issue for employing entities in the UK; global operations will need to ensure that appropriate behaviours are reflected throughout their overseas entities.

And keep a watch on social media

Anyone with a Facebook account can’t have failed to notice the passionate views being expressed by both sides of the argument, but what do you do if this is causing problems in the workplace? Many employees are connected on social media with colleagues, and in some cases, clients and suppliers; forthright expression of political views on Facebook, Twitter and other social media could easily upset these relationships, as many employees view their communications as private or otherwise unrelated to their work. Employers will not want the views of their staff to reflect on their business or be taken as a corporate standpoint.

Employers should remind staff to think carefully about any commentary posted on social media, particularly where colleagues, clients or suppliers are able to read what they say. Staff should be reminded of any social media policy dealing with the appropriate use of networking sites, and where corporate social media accounts are being used, clear guidelines should be issued as to what can be posted and by who.

5. Check secondment terms but don’t make hasty amendments to agreements, contracts and policies

There is no immediate reason for employers to undertake a wholesale review of their employment contracts and policies. However, it would be sensible to identify now where changes or issues may arise on the UK’s exit from the EU:

  • What are the terms of any current or pending expatriate and secondment arrangements – do any assurances given need to be re-considered? 
  • Are there any contractual terms which refer specifically to the EU – e.g. restrictive covenants or intellectual property provisions?
  • Is it still appropriate for agreements to be subject to English law and the jurisdiction of the English courts? There is no need at present to make any amendments in these respects – English law and the jurisdiction of English courts remain sound and stable. However, long-term it may be appropriate to review whether in fact the law and courts of another EU member are more appropriate – this may be particularly so where agreements in respect of European Works Councils are being considered.

6. Continue to anticipate and prepare for employment law developments

There have been no announcements that current UK legislative proposals, such as mandatory gender pay reporting (see here) and the introduction of an apprenticeship levy (see here) will be placed “on hold”. We are still awaiting further details on the outcome of a consultation on draft regulations on mandatory gender pay reporting. However, the Skills Minister, Nick Boles has confirmed this week that the government is not anticipating any change to either the timing or nature of the apprenticeship levy – indeed, apprenticeships are seen as “even more vital” to the UK. Employers should continue to plan for these developments as usual.

Similarly, decisions of the Court of European Justice will still be applicable when interpreting the relevant provisions of our UK law. Issues such as holiday pay (which returns to the Court of Appeal on 11/12 July 2016), should therefore still be treated very much as “live”.

7. Keep on top of what is happening – both on the ground, politically and in your sector

The sheer quantity of information and commentary on Brexit at the moment is overwhelming – what a Brexit looks like depends not only on who will be leading our government in the coming years, but also on the deal that they can reach with Europe. It will be critical for HR to make sure they stay ahead of the game, understanding what the roadmap for engaging their workforce and the future employment law picture will look like. Specialist employment and immigration advice should be sought to plan ahead.

HR must also remain alert to more immediate day to day issues. How is Brexit impacting on business and service lines? How are other businesses in the sector reacting? And most importantly, how does this feed into workforce requirements?

Employees will also, depending on their own personal circumstances, be impacted at different times and in different ways by the Brexit decision – be it concerns relating to their employment or a family member. Carolyn Fairbairn, director-general of the CBI sees the uncertainty for migrant workers as a top priority – “the government should remove uncertainties over the long-term right to stay in the UK for those already working here as soon as possible”.

Visit our Brexit page for more on the legal implications of Brexit for your business, or register to receive regular Brexit updates by email.

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* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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