Hedging your Brexit bet – win / win practical tips for employers

27 July 2016

The outcome of the referendum on the UK’s membership of the European Union unleashed a shockwave which tore apart the political establishment. In the immediate aftermath, the only thing that is certain is that we do not know what will happen in the coming years. When will Article 50 be triggered? What trade arrangements will the UK enter into? Will there be any political will to start picking apart long established employment law principles?

In this situation, it is natural to focus on the economic risks to your business posed by this uncertainty, but employers should not neglect the practical steps which they can be taking from an employment law perspective. Here are some thoughts on what employers can be doing right now to future proof themselves for whatever Brexit may throw at them over the coming years.

Before the vote, Jeremy Corbyn warned of a “bonfire of employment law rights” if a Brexit occurred. Most employment lawyers consider that this sort of wholesale reform is unlikely, although there may be some chipping away at the more unpopular rights (from the point of view of employers) derived from Europe.

Now may be a good time for a general review of employment contracts and handbooks. This will allow employers to take advantage of any relaxation in such laws, but without creating any additional risk for them if nothing does in fact change. Such action would prevent the situation where an employee can still enjoy the benefits of such a right by virtue of their contract, even though the statutory, or European, regime no longer requires it. Furthermore, if employers begin to prepare now, a few years ahead of such changes, it will allow them more easily to introduce such provisions for all new joiners from this point on.

For example, EU law currently entitles employees to carry forward holiday days to the next holiday year if they are unable to take them owing to sickness absence or certain family-related leave. This specific exception to the general rule of not carrying over holiday is usually expressly set out in employment contracts. One option may be to amend this to state that carry over will only be allowed “to the extent that the law allows”. If the law does not change, then nothing is lost, but if it does, then carry-over may be lawfully restricted.

A similar amendment may also be appropriate for clauses which deal with how holiday pay is calculated and whether it should include, for example, overtime and commission. The state of the law is currently being considered by the Court of Appeal, but may be an area, being unpopular with employers, which is potentially ripe for legislative intervention following Brexit (considering that the Government has already done so by limiting claims for back pay to two years).

Another example would be mobility clauses. There has been much talk of employers, mainly in the financial services sector, moving jobs to the continent following the vote. If this is something that your business is contemplating for key individuals, then it may be worth tightening up such clauses in good time for such a move.

Finally, a thought on the General Data Protection Regulation. It is due to come into effect on 25 May 2018, just before the UK may be exiting the EU. The latest advice from the Government and the Information Commissioner’s Office is that businesses “should expect to comply with standards equivalent to those under the GDPR to enable them to transfer data around the EU for business purposes.” As such, it seems best to continue with your preparations for compliance with the GDPR, as it is unlikely to be wasted effort, whether the UK actually leaves the EU or not.

Further information

Should you have any questions about the issues raised in this blog, please contact a member of our employment team.

You may also be interested in reading our other Brexit updates

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We welcome views and opinions about the issues raised in this blog. Should you require specific advice in relation to personal circumstances, please use the form on the contact page.

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