Guest Blog by Elaine Pritchard, HR Consultant, Moorepay
With Brexit now only a few months away – our membership of the EU is set to end on the 29 March 2019 – in this blog we look at the potential effects of Brexit from an employer’s perspective.
But first, the Brexit basics.
The transition period
It is hoped that, by our exit date, the UK and EU will have agreed a transition period for businesses to adjust, meaning it will still feel as though we are still in the EU.
The proposed transition period is from 29 March 2019 through to 31 December 2020. This time should be used to prepare for the time the new post-Brexit rules between the UK and the EU begin.
It is hoped that a provisional agreement on trading terms will be reached by March 2019, but the finer details of what such an agreement may contain are hard to predict.
At the minute, the UK is part of the World Trade Organisation because of its membership of the EU. We will automatically become a member in our own right after we leave.
During the transition period, the UK will be able to negotiate its own trade deals – but these will not be able to come into force until after the transition period ends on 1st January 2021.
The WTO operates a principle of non-discrimination, which means that members must not disadvantage one member over any other, which should prevent the EU from imposing tariffs on the UK which would discriminate against us and of course works the other way too.
So, for example, if the EU imposed a 10% tariff on UK car imports, the UK could impose the same tariff on German, French or Italian cars, which would be a waste of time.
How Brexit affects EU workers, plus the EU Settlement Scheme
To a large extent it will depend on the sector your business operates in. Sectors such as the hospitality, catering, IT industries and, of course, the NHS rely heavily on EU workers to function.
Although it was originally thought that many of these EU workers would leave, causing huge gaps in employment needs, this doesn’t appear to be the case. Yes, some have returned to their home countries, but there are still more EU citizens entering the UK than leaving, with more than 80% of these already having a definite job lined up.
But what will happen to them after Brexit?
There was also a lot of concern around the fact that these EU workers would have to leave after Brexit.
However, the latest proposal from the Government is that these (approx.) 3.2 million EU citizens – along with those from Iceland, Norway, Switzerland and Liechtenstein who are in the UK – will be able to carry on living and working in the UK with a new “settled status” under the EU Settlement Scheme.
In order to qualify for “settled status” they must have been living in the UK for five years by the end of 2020, be able to prove their identity, and state whether they have any criminal convictions.
Answers will be checked against a Government database and decisions will be made within a couple of weeks. If they are granted “settled status” they and their families will be able to continue living and working in the UK indefinitely.
The Government has released an employer toolkit to help businesses understand and prepare for this scheme.
What will happen to EU regulations regarding employment?
Many have speculated that all of the existing EU regulations such as the Working Time Directive, TUPE, collective consultation and discrimination legislation would no longer be effective when we leave the EU.
However, the Government has promised to preserve employment protection when we leave the EU. This means that employees will still be entitled to:
- paid holidays
- a maximum 48-hour working week (unless they have opted out)
- rest breaks during the working day/night
…and the many other protections enjoyed by employees under EU legislation.
No doubt some of these elements will be revisited after Brexit, but whether they will change or not is still to be seen. All parties will be very aware of the fact that workers are also voters, and taking away holidays is unlikely to be a vote winner!