UK: Brexit Brake?

Last Updated: 29 November 2016
Article by Andrew Humphrey

Parliament now has to vote on Brexit. How will recent Brexit developments affect your business?

The High Court has ruled that Parliament must now vote on triggering the mechanism to leave the E.U. Sterling spiked upwards in response. The Government has stated that it will appeal. In the meantime, Teresa May has given her first keynote speech on worker rights under Brexit; and the Secretary for Culture, Media and Sport has confirmed that "it will be expected and quite normal for us to opt into" the new EU Data Protection Rules in the meantime.

So what does this all mean for UK employers?

Impact of High Court judgement

We think there are good prospects of this going immediately to the Supreme Court; and fair prospects of the Government losing all over again. It has already proven a tough task to argue that the Government can unilaterally overrule Acts of Parliament, never mind the suggestion that we are dealing with a treaty and so the Royal Prerogative can be evoked. But what does this mean for businesses?

  • It means that there is a risk that MPs vote against invoking Article 50 despite the outcome of the referendum. In turn, this may result in not exiting the E.U. and still being able to access the Single Market. It may also have an effect on the value of Sterling in the short to medium term
  • If this doesn't happen then it may still mean that the triggering of Article 50 is delayed, which will mean that UK businesses are exposed to unamended EU law for longer. That's not an insignificant proposition. By way of example, it means being exposed to an undiluted version of the new EU General Data Protection Regulations for longer. These Regulations require a re-evaluation of all data-flows in every aspect of their business operation and undertake significant compliance work in order to avoid potential fines of up to 2-4% of their global business turnover come May 2018. There is now all the more reason to start preparing before consultant companies jack up their prices next year.

Worker rights if or when Brexit goes ahead

"... [L]et me be absolutely clear: existing workers' legal rights will continue to be guaranteed in law - and they will be guaranteed as long as I am Prime Minister".

This hardly signals an immediate unburdening of Brussels' bureaucracy. And it's no small irony that "The Great Repeal Bill" is actually designed to automatically incorporate all of EU law into domestic legislation, pending later review. There are good reasons to assume little would change in the short-term under Brexit. After all, a significant proportion of the UK's employment law comes from the EU but much of it was built on legislation already enacted by the Government. On that basis, no one really expects an immediate repeal of unfair dismissal law, discrimination law, or family friendly rights.

So would anything change?

Yes, probably. The most likely legislation includes:

  • The Transfer of Undertakings (Protection of Employment) Regulations 2006, particularly where this affects outsourcing arrangements and the more awkward collective consultation obligations.
  • The Working Time Regulations 1998, particularly in respect of the 48-hour opt out; and to include amendments to ensure that overtime payments are not included in holiday pay, and holidays are not accrued whilst workers are off sick. Also, don't totally rule out reduction of annual holiday entitlement. If Brexit goes badly and the Government perceives the need to allow business to reduce employment costs, this may still be introduced under the guise of giving businesses and workers the "freedom to contract" on these issues. Indeed given that the judgement of the European Courts of Justice would cease to apply, expect recent case law to be relitigated on this subject.
  • The Agency Workers Regulations 2010. These may be repealed in their entirety, giving businesses a lot more flexibility about how they engage contractors and agency workers which will help to appease vocal lobbyists complaining about the effect of the recent UBER judgment.
  • The Human Rights Act 1998. We expect special attention to be paid to the Act, given the Conservative Party's longstanding objection to it. We think that issues on deportation and privacy will have the strongest focus.
  • The National Minimum Wage Act 1998. We think that review of this is not inconceivable if Brexit negotiations proved so tough that the Government adopted a stance of putting the UK in a position to undercut European businesses.

What about freedom of movement?

Business immigration would be in sharp focus. What happens to British nationals living and working in other EU countries and those nationals of other EU member states living and working in Britain? Will they lose their automatic right to do so? Teresa May has deliberately not given guarantees. If no amnesty is granted in respect of their preferred arrangements, it's reasonable to assume that they would be given sufficient time to obtain citizenship of the country in which they are residing and to return home if they fail to do so. We would be surprised if the Government did not introduce a points quota system to allow the best and brightest to remain in Britain regardless, but even this is not certain as the Government appears intent on delivering on restricted immigration as a key part of its response to the referendum.

So what does this all mean for British business?

It means that British business needs to keep its eye on the ball.

  • If the Government wins the appeal, be ready for Brexit in March 2017. If Brexit goes bad, then one of the few cards that the Government has to play is a threatened reduction in corporation tax or worker rights which would undercut former European trading partners. It will therefore pay to be on top of any changes. Otherwise, for those trading with directly within Europe it will be essential to monitor the progress with negotiations and to lobby for your interest to be recognised.
  • If the Government loses the appeal, be prepared for a Brexit Brake as Parliament prepares to debate this further. This may see Parliament having more say in Brexit and may even result in a "Soft Brexit" with the UK remaining in the EEA with much the same effect as membership of the EU.

To subscribe to our Brexit Board Briefings, or to discuss Business Regulations and / or Employment issues more widely, please contact Andrew Humphrey, Head of Employment

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.