The UK is waking up to the brave new world of Brexit and the Government has a huge amount of work to do to make the UK an attractive place to work and do business amid the uncertainty that will prevail until new agreements are reached.
Withdrawing from Europe is unprecedented, but is likely to be a hugely complicated and lengthy process. The exit rules provide that countries have a minimum of 2 years’ to achieve this and time starts to run from the date the Government serves formal notice to exit the EU. Notice to leave the EU does not have to be issued immediately after the referendum and the timing of it is strictly a political decision for the UK Government (which may not exercise this until after a new Prime Minister has been appointed).
There is still much that we don’t know (and probably will not know for a while yet) and speculation is almost at fever pitch, but we thought it would be helpful to start with what we do know:
- The UK will continue to be bound by EU laws until another agreement is reached or we unilaterally withdraw from the EU (which cannot be earlier than 2 years from the date the exit notice is served).
- Businesses will have to continue to follow all existing UK laws that derive from the EU during this 2 year period. European Directives, such as those regulating working time and holidays, TUPE, collective redundancies, discrimination and agency workers have been implemented via primary legislation in the UK and the UK Government will have to decide whether to amend or repeal these. They will not fall away automatically, simply because of Brexit.
However, EU laws that have direct effect in the UK without the need for implementing legislation will fall away unless the UK Government passes new legislation transposing these into UK law. Similarly, the 5,000 statutory instruments passed by the EU may also fall away unless new legislation is introduced by the UK to replace them.
- In the context of employment, any rights that have contractual effect between employer and employee will (at least for the time being) remain unaffected by Brexit, embedded as they are in our UK law. Employers will not therefore suddenly be able to insist that their staff work over 48 hours per week or take fewer holidays.
- The European Convention on Human Rights which was incorporated into domestic law by the Human Rights Act 1998 will continue to apply (unless it is repealed) as it is not an EU instrument and is enforced by the European Court of Human Rights in Strasbourg.
However, there is a lot we don’t know. The reason why there is so much uncertainty is because we don’t yet know what agreement the UK Government will reach with the EU.
The leave campaign advocated a number of trade models, some or which require the contracting countries to adopt certain EU freedoms, such as the free movement of goods, services, persons and capital. If negotiations fail, or the Government decides to go it alone, the UK will remain a member of the World Trade Organisation and will be subject to trade tariffs but will not be subject to any EU laws.
Many businesses are concerned about what will happen if the UK ultimately pulls up the drawbridge and imposes strict immigration controls using an Australian style points system (which is already in place and severely restricts the ability of non EU residents to live and work in the UK).
The borders will not automatically be closed to non UK residents and transitional arrangements will have to be negotiated as part of a post Brexit regime. Depending on the outcome of those negotiations, there may be no automatic right for UK citizens to travel and work outside the UK, or for UK businesses to freely recruit staff from the EU which will potentially cause major problems for some UK businesses, already struggling to fill certain skills gaps.
We may also see a surge in the numbers of EU workers already working in the UK applying for permanent residence so that they can avoid any immigration restrictions that are imposed. Currently, they will need to demonstrate that they have lived in the UK for at least 5 years, although it is possible that the UK will increase these requirements.
Individuals who wish to work in the UK may have to satisfy immigration controls imposed by the UK Government and UK citizens who wish to work in the EU may have to satisfy the immigration policies adopted by the country in which they wish to work.
Our lawyers have provided answers to some frequently asked questions on Brexit at what it means to business.
If you would like to find out more, please phone 0370 1500 100 or send our Referendum team an email with any questions.