The extent to which UK employment law will change following the UK’s withdrawal from the EU remains largely unknown. However, in time, the UK government will undoubtedly turn its attention to employment issues. We summarise below the main changes which may be considered as part of any future government review. We also provide an overview of Brexit’s immediate impact on employing EU nationals in the UK.
By Rachel Ashwood and Joe Taylor, Taylor Vinters
Possible changes to UK employment legislation as a result of Brexit
Due to Covid-19 (and potentially other more pressing trade matters arising from Brexit), it may be some time before the government turns its attention to reviewing and potentially amending any UK employment legislation as a result of this country’s exit from the EU. However, below are some areas where change is anticipated:
- The Working Time Directive – working hours are currently set at a maximum of 48 hours per week across the EU, but the UK has an opt-out system. Now that Brexit has taken place, it is open for the UK government to increase this limit or remove it entirely. In addition, the calculation of holiday pay may also change, with a potential limit on what elements should be included within holiday pay. At the moment, when calculating statutory holiday pay, employers should include additional regular payments that are linked to the employee’s role – like commission (following a long line of EU case law). However, there is a possibility that the government will vary this, so that holiday pay will only include the employee’s basic salary going forward.
- Redundancies – currently, depending on how many employees an employer proposes to make redundant, there are strict periods of consultation. The time period for consultation, or indeed the threshold of number of proposed redundancies which triggers the threshold, may be increased, reducing the need for consultation when smaller numbers of employees are at risk of redundancy.
- Discrimination law claims – As a result of EU case law, there is currently no cap on damages awarded to successful claimants in discrimination cases. Following Brexit, however, there is talk of a cap potentially being reintroduced to try to give employers some certainty as to what they may have to pay, if unsuccessful in defending such a claim.
- TUPE – under the current legislation, transferee employers cannot change terms and conditions of the transferring employees’ employment contracts unless there is a technical, economic or organisational reason for the change which entails a change in the workforce. However, this may change to make it easier for the ‘new’ employer to harmonise the ‘new’ employee’s terms and conditions with those of its existing employees. This will be particularly helpful where the transferee is looking to make largely positive changes.
Changes to immigration status
From 1 January 2021, potential new employees from the EU, EEA or Switzerland will need to be sponsored for a visa by an approved UK employer. UK employers looking to hire from the EU, EEA or Switzerland after this date should therefore consider the following options:
- Obtaining a sponsor licence (if they have not already got one);
- Recruiting employees from overseas that remain in their home country and work remotely; and
- Using the UK government’s ‘Global Talent Scheme (if in the academia or research, arts and culture and digital technology spheres).
Any EU, EEA or Swiss employees that were in the UK before 1 January 2021, may continue to work in the UK, provided they have permission to do so. For the majority, this will take the form of EU settled status, which can be applied for up until 30 June 2021.
Employers should be taking steps now to ensure their current EU staff can remain in the UK and that the company is geared up to sponsor skilled workers (from the EU or elsewhere) in the future. Employers should also keep a watching brief on any legislative changes which may be implemented in coming months.
© 2021 Taylor Vinters
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