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Brexit Insights

Welcome to our Brexit resource centre. As the United Kingdom begins to withdraw from the European Union we will be posting our thoughts and insights on the possible issues and implications for businesses.

 
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On 13, 17 and 18 October, the High Court considered whether it would be unlawful for the Secretary of State for Exiting the European Union to notify the European Council of the UK's decision to leave under Article 50(2) Treaty on European Union without an assenting Act of Parliament.

The government's argument was focussed on its belief that it is able to use royal prerogative power to effect the June referendum result, thereby circumventing parliamentary approval for Brexit.

We now await a judgment from the court. However, whatever the result, it is likely that the decision will be appealed. In that instance, it is likely that there will be a 'leapfrog' appeal directly to the Supreme Court, skipping the Court of Appeal, due to the general public importance of the issue.

Finally, a small piece of employment-related Brexit news for you. The Cabinet Office, Home Office and Foreign & Commonwealth Office have published a webpage with a statement on the status of EU nationals in the UK. In it they state: "When we do leave the EU, we fully expect that the legal status of EU nationals living in the UK, and that of UK nationals in EU member states, will be properly protected. The government recognises and values the important contribution made by EU and other non-UK citizens who work, study and live in the UK".

The webpage also contains questions and answers for those who may be affected, but the position is very much that there has been no change to the rights and status of EU nationals in the UK as a result of the referendum.

What Should Employers Do Next?

If any of your workforce are worried about their future in the UK, point them in the direction of the statement for reassurance.

In our previous Brexit update, we looked at what employers might expect following the 'leave' vote. Now, with a new prime minister and a new cabinet in place, has anything changed? In brief, the message is that it's still 'business as usual': EU law will continue to be influential on UK employment law for some time. The new 'Minister for Brexit', David Davis, has made it clear that he has no desire to reduce the impact of EU employment law in the UK. The repeal of laws that have promoted equality and diversity is unlikely; however, there are areas of EU-derived employment law that could be on the agenda for repeal, in the years to come:

  • certain aspects of the Working Time Regulations 1998, possibly those involving holiday rights for workers on long-term sick leave and inclusion of commission and overtime payments in holiday pay;
  • the Agency Workers Regulations 2010, which gives equal treatment to agency staff who have been with the hirer for 12 continuous weeks in a given job; and
  • caps on bonuses in the financial services sector, which the UK unsuccessfully attempted to challenge in 2014.

However, this is all subject to negotiation with the EU; any agreement with the European Union involving access to the single market or free trade is likely to require the continued adherence to key EU employment rights.

What Should Employers Do Next?

We'll keep you updated with relevant developments as negotiations take place over what form the UK's exit from the European Union will take.

We do not expect much change to data protection obligations following the UK's decision to leave the EU, and businesses should assume that regardless of when we exit or what exit looks like, they will need to comply with the new GDPR. As a reminder, the GDPR is EU-wide legislation proposing large changes to the data privacy regime, to come into force by May 2018. Whilst the GDPR will not directly apply to the United Kingdom when it leaves the EU, we expect that if the UK wishes to continue to trade with the EU's single market, the European Union would require the UK to prove that it provides adequate security of personal data by reference to the GDPR. The ICO made it clear throughout the referendum process that businesses should continue to ensure that their arrangements comply with the GDPR, even in the event of a 'leave' vote. Further communication is awaited from the ICO following the result.

What Should Employers Do Next?

It is too early to predict the form of what the UK's 'adequacy' of security ought to look like, but we will keep you abreast of developments including updates from the ICO.

  • Brexit Legal Challenge Considered by High Court (3 November 2016)
  • Government Statement on EU Nationals in the UK (18 August 2016)
  • Brexit: Implications of Brexit for Employment Law in the UK (25 July 2016)
  • Data Privacy: Information Commissioner's Office (ICO) Statement on the General Data Protection Regulation (GDPR) Following Brexit Vote (July 25 2016)
  • What Does Brexit Mean for Employment Law in England?

    The in/out referendum votes have been counted and the people of Britain have decided to leave the European Union (EU).

    What does this mean for employment law in England?

    It'll be business as usual in the immediate future, at least, with the mechanics of leaving (if indeed we will actually leave) to be ironed out over the coming weeks, months and years (a member state has to give at least two years' notice before it can leave the EU). Though a lot of English employment law is derived from the EU, many of the underlying principles and protections existed long before the EU laws we currently have, for instance, equal pay and discrimination laws. Also, businesses have become used to a lot of laws mandated by the EU, which have become embedded in employment contracts and policies. So, what could the future hold?

    • Whilst a wholesale demolition of EU law is highly unlikely to take place, certain aspects could be revised in due course. Prime suspects would include:
      • Transfer of Undertakings (Protection of Employment) Regulations (TUPE)-namely the inability of employers to harmonise terms and conditions post acquisition/service provider change;
      • introducing a compensation cap on discrimination law claims; and
      • a reworking, or even repeal, of the Agency Workers Regulations, which have made the use of agency staff more costly and burdensome, while not gaining the level of entrenchment that other EU laws have.
    • Warnings of restructurings, especially in the financial services sector, could come to fruition, which could potentially mean job losses and an increase in litigation that often follows in times of economic turmoil.
    • The impact of EU laws slated to come into effect in the next few years could be curtailed or even nullified. However it'll likely be the case that the government will want to maintain trade with the EU, meaning complying with a negotiated version of the EU's rules in order to access the single market. Notable incoming EU laws include:
      • The new Trade Secrets Directive, which was due to be implemented by the British government within two years. Further details can be found here; and
      • In May 2018, the EU's General Data Protection Regulation will come into effect across the EU. As we've previously reported, this will bring with it a raft of new and enhanced initiatives to protect the data of European citizens, requiring fundamental changes to company privacy policies and procedures. Whilst the government might act to avoid the regulation, it will still apply to data controllers and processors based outside of the EU whose processing activities relate to the offering of goods or services to individuals in the EU.
    • The homegrown Equality Act 2010 (Gender Pay Gap Information) Regulations 2016 is planned to take effect on October 2016 and will likely continue unabated, with the first reports on pay gaps to be published in April 2018. Click here for more information on what the reports will need to contain.

 
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Brexit Team
Philip  Watkins
Philip Watkins, Corporate
+44 (0) 20 7776 7667
philip.watkins@kattenlaw.co.uk
Nathaniel  Lalone
Nathaniel Lalone, Financial Services
+44 (0) 20 7776 7629
nathaniel.lalone@kattenlaw.co.uk
Michael  Speranza
Michael Speranza, Real Estate
+44 (0) 20 7776 7637
michael.speranza@kattenlaw.co.uk
Sanjay  Mehta
Sanjay Mehta, Tax
+44 (0) 20 7776 7623
sanjay.mehta@kattenlaw.co.uk
Christopher  Hitchins
Christopher Hitchins, Employment Law and Litigation
+44 (0) 20 7776 7663
christopher.hitchins@kattenlaw.co.uk
Joe  Payne
Joe Payne, Litigation and Dispute Resolution
+44 (0) 20 7776 7638
joe.payne@kattenlaw.co.uk
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