UK employment rights in a no-deal Brexit

Introduction

What might a no-deal Brexit mean for UK employment rights? What could employers do now to prepare? And what might the future hold in a no-deal scenario?

Prime Minister Boris Johnson is clear that he would be prepared to leave the European Union without a deal if necessary and the current legislation commits the United Kingdom to leaving the European Union at 11:00pm on 31 October 2019. Thus, it seems like a good time to revisit the employment law implications of a no-deal Brexit.

What can employers do now to prepare for a no-deal scenario?

European works councils

Employers must have pre-designated their new representative agent if their European works council is currently located in the United Kingdom. If the European works council is (or will become) located in another EU country, employers must decide what to do about their existing UK representatives after Brexit (for further details please see “European Commission confirms its views on European works councils and a no-deal Brexit“). Employers that are currently negotiating a European works council agreement or have a European works council operating under the default subsidiary requirements should consider relocating their arrangements now if they have not done so already.

Data protection

If a no-deal Brexit approaches, employers may need to take steps to protect data flows from the United Kingdom to the European Union.

Impact on business

There are certain legal requirements that employers should contemplate if they are considering restructuring or relocating after Brexit. The key point is that employers may need to consult on the business case for closure before any decision to close a business is taken. Employees should also be offered the opportunity to move with the business if it is relocating, subject to them meeting any relevant language, immigration or qualification requirements.

Following a no-deal Brexit – what would it mean?

Employment law

In the event of a no-deal Brexit, the European Union (Withdrawal) Act 2018 will convert all EU employment law as it stands before Brexit into UK law. The Employment Rights (Amendment) (EU Exit) Regulations 2019 will make some small technical changes and introduce new provisions intended to preserve UK-located European works councils (although it has been argued that the European works council arrangements do not actually work) but, apart from the changes made by those regulations, employment law will remain the same in the immediate term (for further details please see “Will Brexit frustrate your European works council?“).

Business travel to EEA and Switzerland

The rules for British citizens travelling to Ireland will not change and they will be allowed to undertake any activity without restriction. After Brexit, British citizens travelling to the other EEA countries or Switzerland will be exempt from visa requirements for up to 90 days in a 180-day period. This is for visits only, including for attending business meetings. However, British citizens will be unable to undertake paid work, so employees must understand the scope of the proposed activities on each trip and obtain any required work permissions if these go beyond the activities allowed for visitors. It will also be important to calculate the time spent in the Schengen area on a rolling basis to ensure that the 90-day maximum stay is not exceeded. British citizens will also need to have a passport which is valid for at least six months from the time that they enter the European Union. Note that some British passports are issued for more than 10 years in total but only the first 10 years of validity can be counted towards this six-month requirement. The government has produced a calculator that people can use to check if they have enough time left on their passport to cover a visit.

Business travel to United Kingdom

If the British government proceeds with its original plan to bring in new primary legislation to end the free movement of EEA and Swiss nationals to the United Kingdom, there is likely to be a short period after a no-deal Brexit in which free movement will still apply. However, recent press reports suggest that the government may seek to end free movement using secondary legislation. It is likely this will ultimately prove to be unfeasible. However, if the government is successful in using secondary legislation, it could mean that free movement will end on exit day. After this, Irish nationals will continue to undertake business travel to the United Kingdom without restriction due to the common travel area arrangements. The arrangements for EEA or Swiss citizens arriving in the United Kingdom between the date that free movement ends and 31 December 2020 are currently unknown. The government previously announced that they would be able to enter visa-free for up to three months and would be allowed to undertake any activities without restriction; however, this plan has now been scrapped and its replacement is yet to be announced.

What would a no-deal future look like?

In the longer term, there are lots of potential employment implications for which employers should prepare.

Possible divergence from ECJ case law

Pre-Brexit decisions of the European Court of Justice (ECJ) will remain binding on most UK tribunals and courts, but need not be followed by the Supreme Court. New ECJ decisions will not be binding on any court or tribunal, although they could be considered if relevant. Overall, the UK courts are likely to continue to respect most ECJ rulings, as long as UK and EU legislation remain the same.

No new directives

The United Kingdom would not be required to adopt the Transparent and Predictable Working Conditions Directive, the Work Life Balance Directive, the Whistleblower Directive or any future EU directives. However, the United Kingdom:

  • has already committed to implementing some aspects of the Transparent and Predictable Working Conditions Directive;
  • is one of the few EU countries to already have whistleblower protection; and
  • already provides some of the rights established under the new Work Life Balance Directive.

Thus, while differences in employment law could open relatively soon, they will be quite small.

Longer-term changes to employment law

Larger gaps will open if the UK government dismantles EU-derived employment laws after Brexit. Theresa May was always emphatic that her government would look to enhance workers’ rights after Brexit, not reduce them. However, other prime ministers may take a different stance.

Boris Johnson is reported to be keen to renounce the Working Time Directive. He gave evidence to a select committee that it has proved too expensive to implement in the United Kingdom and it would be surprising, given the strength of his previous statements, if his government made no changes to EU-derived working time laws. However, it is hard to imagine any modern UK government ending all rights to paid holiday. Instead, the United Kingdom can reasonably expect the scrapping of EU rules on working time limits and record-keeping requirements, but the retention of some rights to paid holiday (possibly paid at the rate of basic pay only). Similarly, some rights provided by the Agency Workers Directive could be abolished (eg, the right to pay parity after 12 weeks), but limited agency worker rights are likely to remain.

In the longer term, if a Conservative government remains in power, the country might also expect to see collective redundancy consultation being abolished or made less onerous and the restrictions on changing terms after a Transfer of Undertakings (Protection of Employment) (TUPE) being lifted (although TUPE is unlikely to be scrapped). Previous governments have explored whether discrimination awards could be capped (eg, at one or two years’ pay) but this was problematic under EU law. Capping discrimination awards is unlikely in the short term, not least because of the #metoo movement, but it could come back on the table later.

Ultimately, the United Kingdom faces the same challenges as any other modern economy: how to regulate the increasing volume of platform and contingent working and respond to the impact of demographic and technological change on the workplace. The United Kingdom’s withdrawal from the European Union will mean that the United Kingdom will need to find its own regulatory solutions to these challenges.

Discrimination rights

UK law prohibits workplace discrimination on grounds of nationality and national origin. In the (hopefully unlikely) event of any EU citizen experiencing abuse or harassment in the workplace, employers must be ready to respond under their anti-harassment policies. Employers may want to check that they already cover nationality as well as race.

Interestingly, UK equality legislation goes further than the EU minimum requirements in explicitly preventing nationality discrimination in the workplace. This is one of a number of instances where UK law actually provides more rights than the EU minimum and illustrates that, although the United Kingdom may dismantle some EU-derived employment rights following a no-deal Brexit, there are still likely to be areas of employment law where it goes further than the European Union.

This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide

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August news….Permanent placements rise at slower pace

Key market points:

  • Permanent placement growth softens to nine-month low…
  • Staff vacancies expand at quickest rate since last November
  • Decline in candidate availability eases, but remains historically sharp

Commentary

The rise in interest rates for only the second time in a decade may leave some people feeling the pinch. But a new job is one way people can ease the burden on their finances. With our data showing starting salaries continuing to rise, the latest official government figures suggest that we are finally seeing the effects of a tighter labour market feed through to pay.

Softer rise in permanent staff appointments…

Permanent placements continued to rise sharply in July, though the rate of expansion was the softest recorded since last October.

…as supply of candidates continues to drop markedly

A candidate shortages weighed on permanent recruitment. The supply of permanent candidates fell sharply in July, despite rates of decline easing to the weakest in three months.

Staff vacancies rise at quicker pace…

Demand for staff strengthened further in July, with overall job vacancies expanding at the quickest rate for eight months.

…maintaining upward pressure on pay

Low candidate availability and robust demand for staff led to a further steep increase in salaries awarded to permanent starters.

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May news …Rise in Vacancies…Drop in candidate availability.

Key Points:

  • Continued rise in permanent placements;
  • Growth of demand for staff picks up for the first time in nine months;
  • Steeper decline in candidate availability triggers greater rises in pay.

Permanent placements…

There has been an increase in permanent placements but the rate of expansion in April was the softest witnessed in 2018. The growth of placements was underpinned by a further substantial rise in demand for staff and greater job vacancies.

Decline in candidate availability…

The rate of reduction in candidate availability for permanent roles has quickened to a three-month record. The steepest decline was in the South of England.

Growth of demand for staff…

Vacancies for permanent roles have increased, thereby indicating that there is a greater demand for staff. This demand was higher in the public, as compared to the private, sector.

Pay pressures…

There has been a further rise in starting salaries for candidates placed into permanent roles. This has been linked to candidate shortages and a robust demand for staff. The strongest rise was in the South of England.

 

Commentary 

Demand for staff is still on the rise in every other sector, but candidate availability keeps dropping. Employers are paying more to attract the right people into their vacancies. For individuals, now is a good time to look for a new job, as you are in a strong position to negotiate higher pay. For employers, the challenge is to stay ahead of the competition to maintain and enhance your workforce. This is about more than just pay, it is about providing progression opportunities and a positive workplace culture. As recruitment gets harder the only solution for employers is to get better at attracting and retaining the right skills and staff…

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Latest market news: High demand for staff but low candidate Availability

 Key points from the March Survey:

  • Permanent placements continue to rise;
  • Growth of demand for staff remains high, but candidate availability drops lower;
  • Starting salaries increase to greatest extent for five months.

Growth in permanent placements…

Although the rate of expansion has softened from February’s three-year record high, the growth in permanent placements remains sharp. Permanent placements vacancies continue to rise at a slightly faster pace than that for temporary job roles.

Candidate availability...

The availability of permanent workers has fallen for the fifty-seventh consecutive month in March. Key permanent staff skills reported in short supply includes in particular Accountants, Engineers, HGV Drivers and Web Developers.

Pay pressures…

The rate of inflation in salaries for newly-placed permanent staff has accelerated for the second month running in March. Evidence suggested that the higher salaries are attributed to strong demand for staff alongside competition for scarce numbers of candidates with the required skills for the roles. Data published by the Office for National Statistics shows improved earnings growth in its latest report. Alongside a softer increase in living costs, this suggests that the pressure on real wages may be coming to an end.

Commentary:

Permanent placements are growing month on month as demand for staff remains high. More people are entering employment, but it doesn’t make up for the shortfall of candidates for many roles, from cyber security and aerospace through to sewing machinists and drivers.

As a result, employers are increasing starting pay to draw candidates away from current roles into new positions. 

Candidates planning to move jobs have a strong chance of getting a pay rise. With inflation outstripping pay growth for over a year now, high pay offers will be tempting, as the pressure on starting salaries still isn’t translating into pay rises for staff who stay put. Employers need to look at other means to keep staff, such as creating a good workplace culture and offering progression opportunities.

 

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Inflation Remains at a Record High Amid Candidate Shortages

Key Points from the February Survey:

  • Softer rise in permanent placements
  • High levels of candidate shortages amid high starting salaries
  • Softer rise in staff vacancies

Softer rise in permanent placements…

The number of people placed in permanent jobs increased in February although at a slower rate than January’s recent high. The continued increase has  been attributed to a strong demand for staff and a greater willingness among candidates to take up new roles

Decreased demand for staff…

The demand for staff for permanent positions has risen at its slowest pace in fourteen months.

Availability of staff…

The availability of staff for permanent roles continued to decline in February.

Pay Pressure…

Salaries for permanent starters have increased further in February and the rate of inflation remains at a record high. The higher salaries have been attributed to higher candidate and skill shortages amid rising vacancies.

 

 

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Market update: Salary inflation hits 31 month record!

Key Points

  • Strong rise in recruitment
  • Starting salary inflation hits 31-month record alongside lack of candidate availability;
  • Growth of demand for candidates declines slightly but still remains high.

Sharp Increase in Permanent Placements

Permanent placements have continued to rise each month for the past year-and-a-half. This growth has been linked to a greater demand for staff, although some panellists suggest that improved decision-making has also been a factor.

Increase in vacancies:

Overall demand has continued to rise in January.

Availability of Permanent Staff:

The number of available permanent candidates has continued to deteriorate in 2018. Key permanent staff skills reported in short supply includes paraplanners.

Higher Starting Salary Inflation:

Starting salaries for successful permanent candidates has increased at the fastest pace for over two-and-a-half years.

UK Unemployment Rate in Context:

The UK employment rate is at a four-decade low of 4.3% which is below the EU jobless rate of 7.3%. The jobless rates are higher in Austria (5.4%) and the Netherlands (4.4%), but lower in the US (4.1%), Germany (3.6%) and Japan (2.7%) in comparison to the UK.

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Recruitment news Jan 2018 – Permanent recruitment continues to rise at an increasing pace

Key Points from the December Survey:

  • Permanent placements continue to rise at an increasing pace;
  • Pay inflation remains high alongside a further decrease in candidate availability;
  • Demand for staff softens but remains historically strong.

Permanent Placements

Permanent staff placements have increased at the quickest pace since August. This has resulted in a higher number of people placed in permanent job roles for the seventeenth month running in December.  Key permanent staff skills reported to be in short supply esp paraplanners but also in construction and engineering.

Staff Availability

There has been an accelerated and steep drop in permanent candidate numbers. The rate of deterioration is the fastest recorded over the past two years.

Permanent Salaries

The trend of higher starting salaries for permanent jobs has continued into December. Although the pace of inflation softened for the third month in a row, growth remained sharp overall.

Demand for Staff

Although there has been an easing in the rate of expansion of demand for staff, the rate of growth has remained sharp and above the series average.

Employment

Latest statistics reveal that 32.08 million people were in work in the three months to October. Although this was 56,000 fewer than in the prior three months, this showed an increase of 325,000 compared to the same period in 2016.

Commentary: The number of people finding jobs via recruiters is growing, even while the overall employment rate is plateauing. This suggests that more employers are turning to recruiters to help them fill vacancies as candidate availability continues to fall and recruiting good people becomes that much harder. As a response to these candidate shortages are offering increased starting salaries to attract staff but while this has been the case for some time it isn’t translating into significant wage growth across the economy yet.

Early in the New Year, people often think about changing jobs, so employers are going to have to think carefully about how they can both retain existing capabilities and find the new hires they need as competition for people intensifies. Bosses should consider going to wider talent pools and to be inventive about how to improve their employer brand and make themselves an even more attractive place to work.

 

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Job Searches: Look at the Entire Package (Not Just the Salary!)

Job Searches: Look at the Entire Package (Not Just the Salary!)

The start of a new year often coincides with a spike in job searches. In fact, more than half of the UK population will look for a new job in 2018. It can be tempting to focus solely on the offered salary. However, a wider perspective which takes into account the entire package being offered is advisable. Other factors to be considered include:

Pension Contributions

It can be important to consider whether your employer is using a defined contribution (DC) pension or a defined benefit (DB) pension scheme. The average employer for a DC scheme puts in 3.2% of salary, but this number can range from the minimum 1% to 10%. The average employer for a DB scheme, conversely, puts on 16.9%. If you seek a greater reward for your work, rather than additional cash, this can be a way of getting more money from your employer by diverting a greater amount of your salary into your pension.

Life Cover

Almost all employers offer a payment of several times your salary if you die while performing contractual duties. The majority will also pay for income protection; this will provide you with a regular income if you are unable to work for a while.

Medical Insurance

One-fifth of employees have private medical insurance. To replace this benefit, it would cost an average of just under £1,500. The benefits outweigh the payment of tax on their cover.

Save as You Earn Schemes

After paying a monthly sum into such schemes for a period of three to five years, you will be given a bonus. You can then buy shares in your employer at a fixed price. If the share price has increased during the period you can buy the shares at a large discount. If share price has fallen, you simply get your savings back with the addition of the bonus.

If you are currently involved in such schemes and decide to move employers, you will only get your savings back and no longer have the option to buy shares. Occasionally a new employer will compensate you for the forgone share options.

Other Benefits on Offer

These include:

  • Tax-free childcare vouchers;
  • Tax-efficient computer or bike schemes;
  • Season ticket loans;
  • Cheaper insurance cover;
  • Discounted shopping vouchers;
  • Free parking.

In conclusion, it is important to compare ALL the benefits offered by an existing and potential employer before deciding to accept a new job. There may be the possibility to negotiate with your current employer over the benefits offered.

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Permanent placements rise to greatest extent since August

Key Points from the November Survey:

  • Permanent placements rise at a quicker pace;
  • Availability of candidates continues to decline sharply;
  • High demand for staff leads to further increases in pay;
  • The unemployment rate remains low.

Staff Appointments Rise Further…

The growth in permanent placements has reached a three-month high across the UK. The rise has been attributed to an increased demand for staff and company expansion plans.

The number of permanent placements in the South, conversely, is increasing at a slower rate.

Vacancies…

Staff vacancies have continued to rise sharply. The rate of growth since October, however, has slackened slightly.

Across all sectors, the number of permanent staff vacancies has increased. In descending order, the sectors with the greatest number are:

  • Accounting/Finance;
  • IT and Computing;
  • Engineering;
  • Executive/Professional.

Staff Availability…

Across the UK the availability of candidates to fill permanent roles has continued to decline. The South has recorded the steepest decline in permanent labour supply. The key permanents staff skills reported to be in short supply include:

  • Accounting/Finance:
    • Audit, Estimators, Insurance, Paraplanners, Payroll.
  • Blue Collar:
    • HGV and LGV Drivers, Production and Distribution.
  • Construction:
    • Construction, conveyancing, Quantity Surveyors.
  • Engineering:
    • Aerospace, Engineers, Technicians.

Pay Pressures…

The average starting salaries for permanents jobs has continued to increase, resulting in a growth which has lasted for just over five-and-a-half years. The increase is salary has been attributed to low candidate availability combined with a strong demand for staff. The quickest rate of inflation has been recorded in the North.

Unemployment…

The unemployment rate and claimant count for the UK remains historically low.

The unemployment rate stands at the lowest level it has been since 1975. It is virtually identical for both men and women.

In October, approximately 806,000 people claimed out-of-work benefits. Although a rise by around 24,000 people compared to last year, the claimant count has remained close to its lowest level recorded in the early 1970s.

 

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