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Brexit – What does this mean for HR management?

Brexit - What does this mean for HR management?

XpertHR conducted a quick poll to determine how many organisations had started to make plans for the HR implications of Brexit, surprisingly or not most organisations involved in the poll confirmed that they had not made any plans for the HR implications of Brexit.
This news page will take a moment to look at the exit plan for the UK to leave the EU, what some of the different options may look like when the UK leaves the EU in terms of employment law, some of the legislation that may be considered when the UK leaves the EU and the implications for EEU Nationals living and working in the UK at the moment.

Formal process for leaving the EU

Article 50 of the Treaty on European Union is the process for which a State will submit its resignation from the European Union. In the case of the UK we have to inform the EU officials that we now wish to leave the European Union which then starts a 2 year notice period. Therefore, we will not be officially leaving the EU until 2019. Theresa May, the British Prime Minister has indicated that notification will be made in March 2017. It is during that two year period that a number of negotiations will take place between us and our EU Partners which could result in any arrangement being made and which could take less than two years or more than two years. If agreeing to the arrangements takes longer than two years we will officially be out of the EU at that time.

Therefore, the British Prime Minister needs to inform the EU that we are leaving and then and then what has to happen is the repeal of the European Communities Act 1972.

The European Communities Act 1972 is the piece of legislation that means our government ministers have to issue Acts of Law that comply with EU Law. In theory this would mean that once the European Communities Act 1972 is repealed all legislation that has been passed under this Law would cease to exist, however, this is unlikely to be the case. When the European Communities Act is repealed, it is almost certain to have a saving provision within it, which means that the regulations that have been passed will continue to take effect.

Simply, by leaving the EU any legislation passed during the time of our membership will continue, however, once the two year notice period has passed we will be able to make changes to legislation that previously we had imposed upon us by being a part of the EU.

It is important to highlight that any legislation that had been imposed on us by being a part of the EU did have UK involvement anyway. We were very much a part of the decision making process. The Working Time Regulations which came from the Working Time Directive had strong involvement from the UK and the 48 hour working week was very much driven by UK officials along with exceptions we have in the Security Industry etc. Therefore, it is very important to understand that the UK government was very much a part of the decision making process for laws that we imposed on us through our membership of the EU, hence, why would we just disregard this when we are no longer a part of the EU.

The UK has also introduced laws that go above and beyond the requirements of EU Law. For example, EU laws states that all employees should get 4 weeks leave per year, however, UK Law allows for 5.6 weeks, our Maternity Laws allow for greater rights compared to the Pregnant Workers Directive. You can see how changing EU legislation is not as simple as just picking out the bits that has been imposed on us, and why would we want to anyway.

There are also a number of pieces of legislation that have been developed by the UK with no involvement of EU provisions such as unfair dismissal, Minimum Wage, Shared Parental Leave and Pay and Flexible Working legislation. The fact remains however, that even when we exit the EU we may still be bound by some EU laws, we only have to look at the Norwegian option and the Swiss Option.

Even if we assume that once we are out of the EU we are free to make our own Laws, are we really going to reduce the rights of the working people? Theresa May has made it very clear that leaving the EU is not an opportunity for our working population to lose out.

Realistically, changing legislation takes time and the government will have its hands full dealing with other matters as a result of Brexit, changes to employment law will not be a priority and therefore it may take several years before we start to see the results of any changes.

So to round up on this point, it is important to remember that until Article 50 has taken its course we are still members of the EU, we’re likely to be members of the EU for at least another two years, possibly more than that, and as far as we can tell, all the normal rules will continue to apply until we formally agree otherwise. I know the future of immigration law may be in doubt and that’s what we’ll go on to talk about next.

Implications for EEA Nationals in the UK

Just as is the case with changes to employment legislation nothing will change for EEA Nationals or British Nationals in the EU until we actually leave the EU, and therefore, these people will continue to be protected by their European free movement rights. What is concerning is that there is no fixed immigration policy for EEA Nationals or British Nationals in the EU for when we do leave and Theresa May has refused to give any definite reassurances of the protection of EEA Nationals currently in the UK.
Some expectations have been given, although these are just expectations and nothing more. It is expected that the legal status of EU nationals living in the UK and UK nationals in EU member states will be properly protected, however, no expectations have been given regarding EU Nationals who have less than 5 years residency and those who haven’t yet acquired residency.

Annabel Mace, who is a partner in Squire Patton Boggs Labour and Employment department and heads up the UK Business Immigration team gives us three possible options that may come about as a result of an exit from the EU.

1. ‘that it is likely, despite the lack of reassurance that’s been given, that EEA nationals who already have a right of permanent residence in the UK at the point at which we leave Europe will be able to stay here. And what that means is that EEA nationals who have been residing in the UK continuously for at least five years, exercising a treaty right – and broadly that means working here, being self-sufficient, studying or being self-employed – those people will automatically have acquired the status of permanent residence once they’ve been here for five years’.

2. ‘then this does raise the question of those who have been here for less than five years, because those individuals won’t have permanent residence, and it’s unlikely I think that we’re going to get an immediate reassurance in relation to that category of worker. But in practice I do think it’s likely that people who are lawfully here, exercising a treaty right or otherwise known as being a ‘qualified person’ will somehow retain the right to be here in that they may be eligible under some transitional provisions to move into a new points-based system or whatever immigration system that’s implemented. So some protection for them. I think in practice it will be highly unlikely and impracticable for the government to insist that those people leave. I don’t see how it could be practicably enforced. The Home Office can barely cope with the workload that they have now, so I just think it will be much easier to allow this category of people to stay’.

3. ‘And finally, I think you might see some restrictions on new EEA immigration to the UK before Brexit is finalised. But in practice I think this is unlikely because it will be a breach of the current law but also in practice I think the number of EEA nationals outside the UK who are actually going to start now coming to the UK is probably going to reduce, so that particular issue will have solved itself’.

So what can employers be saying to EEA staff?

For those who have been a qualified person in the UK for five years or more, it is advisable that they get their documentation to confirm their status. These individuals do not have to apply for permanent residency, they would automatically get this, however, it would be prudent for them to get the documentation at this stage to confirm this as this gives certainty. For those where it is unclear, for example where there have been gaps in their employment history or where they have been outside of the UK for a period of time making an application to the Home Office and obtaining the documentation to confirm their residency is imperative. Once they have this documentation it is highly likely it will ever be repealed.

For those who don’t have five years’ continuous residence in the UK, they can apply for a Registration Certificate. This confirms their status as a qualified person, someone exercising their treaty rights when they are in the UK, however, it doesn’t guarantee permanent residence at the end of five years but what it does do is provide assistance in showing what your status was at a particular point and it may also be very useful in showing that you qualify under any transitional provisions.