Following the UK's EU referendum, the UK has a clear
mandate for exit from the European Union. There is doubt, however,
about what the future may look like for the UK and its relationship
with Europe or the rest of the world. It is likely that there will
now be a prolonged transition period, with the next UK government
needing time to plan, prepare and negotiate the UK's
Some key thoughts in the meantime
For UK nationals living elsewhere in the EU, and EU nationals
living in the UK, there will be no immediate change. Protection of
citizens already established in those states is likely to form part
of negotiations between the UK and the EU.
Free movement of EU citizens is expected to be negotiated as a
condition of any trade deal between the UK and the EU. However, if
ultimately the UK decides to no longer share in the EU's right
to free movement of labor, then citizens of other member states
will not enjoy an automatic right to work, travel and live in the
UK. Similarly, UK citizens will not enjoy EU citizenship rights.
Prior to the referendum, the UK had already made it more difficult
for EU citizens to gain permanent residence in the UK. However, the
UK government will be aware that imposing fundamental limits on the
free movement of labor at this time could make the UK a much less
attractive destination for international businesses and skilled and
Nationals of other countries working in the UK, such as from
the US, should see no imminent changes. The UK government is saying
that the UK is open for business on a global scale. This is an
opportunity to grow and strengthen relationships across the globe.
At present the UK is not seeing any large-scale recruitment freezes
or job losses.
Trade and investment are good for the UK's employment
growth and stability. The UK government will want to keep a level
playing field with the UK's European counterparts, and look for
opportunities across the globe, at this crucial time. One key area
where it will want to display its good practice is data protection.
Realistically, a trade deal between the UK and the EU may also mean
the UK continuing to be subject to key EU legislation.
The UK has a body of homegrown legislation protecting UK
employment law rights. The fundamental right that exists in the UK
to claim unfair dismissal will not be affected by its withdrawal
from Europe. The UK also had discrimination laws in place before
its ascension to the EU; EU aims and legislation are so established
in UK good employment practice that they are likely to remain
fundamentally the same for now. While moving to a US-style system,
where employees receive lower overall protection, is possible, it
is unlikely in the short term, given the broader cultural change
needed to accept the US norms.
Subject to the above, EU rights, or improvements in those
rights, in the UK may eventually be diminished or lost. However, it
seems likely that grand proposals will eventually be reduced to a
few smaller, less significant changes. If the UK is not required to
keep EU legislation in these areas as part of a broader deal, the
government may review and make changes to the current position in a
number of areas, such as: (i) harmonization of terms following a
TUPE transfer, (ii) limits on bankers' bonuses, (iii) working
time controls, (iv) collective redundancy consultation, (v) agency
workers' rights and (vi) the absence of a cap on discrimination
If the UK is no longer subject to the jurisdiction of the
European Court of Justice, UK case law may develop in a slightly
different direction. This may mean a gradual parting of ways
between the UK and EU states.
On balance, it is most likely that the next government will want
to preserve the status quo, at least in the short term, and wait
for the dust to settle before looking for opportunities to make
more fundamental and valuable changes. Dentons will keep you posted
as the picture evolves.
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