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Brexit and employment rights for law firms: what could a no deal mean?

Brexit and employment rights for law firms: what could a no deal mean?

Whichever form of Brexit we end up with, it will certainly impact upon how law firms handle employment rights. Whether you’re an adamant Remainer or a dyed-in-the-wool Brexiteer, there’s bound to be some confusion.

In the event of a no deal scenario, the government has already set out plans. These come in the form of a series of technical notices which set out the position if no agreement is in place when the UK leaves in March 2019.

You may well believe that now Theresa May has a deal with Brussels, all is well. However, Parliament still has to agree the deal and that is by no means a foregone conclusion. I don’t bet on politics just as I don’t bet on football – and I’m a Man City fan!

So, what guidance is The Government giving on a no deal Brexit? Let’s take a look.

Workplace rights technical notice.

This notice provides guidance on the implications to employment law in the event of a no deal. A large proportion of UK employment legislation is of EU origin. This includes:

  • The Working Time Regulations 1998 (including annual leave, holiday pay and rest breaks).
  • Family leave entitlements.
  • A number of health and safety requirements.
  • Discrimination and harassment protection.
  • Transfer of Undertakings Protection of Employment (TUPE) Regulations 2006.
  • Agency worker protection.

These are the most familiar – there are many more. The technical notice clearly states that the EU (Withdrawal) Act of 2018 will come into play. This will convert powers derived from EU Directives into UK law. Naturally, the government will make amendments where it sees fit to do so. Fundamentally, the aim is to allow UK workers to continue to enjoy the benefits of the former EU regulations.

Areas of potential change.

Following a no deal outcome, the government indicated a couple of possible changes. It is unlikely that these will affect many legal practices, but they are worth a mention.

European Works Councils.

Currently, workers can request European Works Councils (EWC) to be established. They provide information to, and consult with, employees on issues spanning two or more European Economic Area states. The government indicated that, following a no deal Brexit, it will recognise existing EWCs as far as possible. However, the creation of new EWCs will not be allowed.

Employer Insolvency.

In the event of no deal, UK employees who work for a UK or EU employer will enjoy the same protection they have now. In other words, the EU Insolvency Directive will become part of UK law. UK employees will still be able to make claims in employer insolvency cases. 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 particular country. However, the government gives no guarantees in this particular instance.

What does this mean for UK law firms?

Brexit and employment rights for law firms: what could a no deal mean?

The short answer is: pretty much the same as it means for most UK businesses. The implications of the most recent technical notice are limited but it is likely further notices will follow.

The most prominent change following a deal or a no deal Brexit will be the position of the courts. The European Court of Justice will no longer have jurisdiction in the UK. The UK Supreme Court will be the last port of call in employment disputes. How the Supreme Court will interpret the impact of earlier EU case law remains to be seen.

What should you do now?

If you haven’t started already, start planning now. The Government is making contingency plans for a no deal Brexit and that means you should be doing the same. The key questions to ask yourselves are:

  • Brexit of whatever variety is likely to cause some disruption to business. Is your workforce flexible and agile enough to cope, either with a downturn or an upturn?
  • Is your workforce likely to be affected? Take a look at what will happen if you employ EU nationals and examine the likely impact of Brexit on the wider legal labour market.
  • Take a look at your bottom line. Now is not the time to have high levels of WIP and extended lines of credit.
  • Are you keeping an eye on Brexit developments? Appoint one of your team to monitor Brexit issues as they unfold and identify areas of concern for your practice.

I’m sure there are many people who are fed up to the back teeth with hearing about Brexit. Most legal professionals to whom I speak just want it all done and dusted as soon as possible. As things stand at the moment, it appears employment law will remain largely unchanged in the short to medium term. However, it makes sound business sense to have a contingency plan, to get your ducks in a row and to plan for the longer term.

Mike O’Donnell, November 2018.

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