What SMEs Need to Know About Employment Law Post Brexit – What Happens Next?

With October 31^st just around the corner, there is no doubt that Brexit is at the forefront of many business leaders minds. In this guest post, Vistage Speaker Ken Allison offers a view on how employment law may change in the coming months.

As employers, it can be easy to blame Europe for what we see as overly restrictive employment legislation that interferes with our freedom to act – this is despite the fact that we are the least regulated employment market in Europe.

I’ve done my best to stay out of this, but I am now being frequently asked when I visit Vistage Group meetings around the country about the changes that are likely to occur as a result of Brexit.

Hard or soft, I don’t think there will be any short-term changes because whoever is in power will have other things on their minds.  A view shared recently in The Times by Marley Morris from the Institute of Public Policy Research.

Certainly, most ‘soft’ options involve preserving existing employment rights, and in any case, the UK has tended to gold plate European led legislation, so we are unlikely to want to undo it in any dramatic fashion.

Here’s my take on eight key areas of employment law that may shift as we negotiate a deal to leave the EU:-

1. Discrimination. Unlike unfair dismissal, discrimination claims are not capped, and within the last month we have seen a successful sex discrimination claim where the claimant was reputedly seeking compensation of £4 million.

   Fortunately, that size of claim is a real outlier with sex discrimination settlements more usually under £10k.  Nonetheless, the Government has expressed concern about the uncapped nature of these claims, so we could see the removal of the cap.

2. Family friendly regulations (Maternity, flexible working etc.). Largely domestic legislation which exceed European requirements, so not a lot will change.
3. TUPE. A TUPE transfer (Transfer of Undertakings Protection of Employment) occurs when there is a change in employer arising from the transfer of an asset or contract without the sale of the share capital of a business. Typically, this happens where a contract is awarded to a different provider, or assets of a part of a business are bought and the activity continues.

   TUPE protects the interests of employees and has many commercial benefits for employers, although when you are dealing with some of the detail, this is not always appreciated.  Apart from some more freedom to harmonise terms and conditions after a transfer and perhaps a reduction in the consultation requirements, not a lot else will change.

4. Holidays and working time. The ‘48 hour’ opt out arrangements may well be scrapped, and we are in a bit of a mess over holiday pay calculations which successive Governments have promised to sort out. Holiday pay accrual during sick leave, and the inclusion of overtime and commission may be looked at.
5. Collective redundancy consultation. There are minimum consultation periods when 20 or more workers are being made redundant.  These provisions have already been watered down, so there might not be much appetite for further changes.
6. Agency workers. Unpopular regulations which would be politically easy to remove because they are relatively new.  Don’t expect this to be a high priority though.
7. Data protection. Since most of us are still reeling from GDPR, it’s unlikely that we will see less legislation in this area.  We enjoy high standards of data protection and continuing that is likely to be an important aspect of our trading relationship with the EU, particularly in the financial services sector.
8. Freedom of movement. Perhaps obviously, this will be the biggest potential change! Things will change, but if you find out how – let me know!

   More seriously, this is already a key issue for employers of EU nationals who are worried and confused about their future status.  You may have already been trying to reassure staff from outside the UK about their future. 

   One of the most easily digestible resources is from Citizens Advice which you may wish to refer people to.

   Existing staff may well need reassuring, but for many employers the greater anxiety will be about recruitment in the future.  In last week’s Queens Speech, the Government announced a new Immigration Bill introducing an Australian style points based immigration system which may feature criteria that encourages immigrants to move North – we await the detail!

As it stands, all the statutory provisions arising from our membership of the EU will transfer into UK law when we leave, and nothing is likely to change for two or three years. 

Of course, a change of government might alter all that, with the Labour Party already having promised what are probably the most radical changes in employment law for decades.

So, who shall we blame in the future for employment regulations? We shall see!

Ken Allison has a background in line management, corporate HR and personnel, and spent seven years as Head of HR Consulting for a major law firm. Ken runs three workshops for Vistage Groups.

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