What are the implications of Brexit for HR? It’s the week of 29 March 2019, the week that we were supposed to be leaving the EU, and we still can’t answer that question with 100% certainty.
The same confusion has made it hard to give concrete Brexit advice for HR, and equally difficult for HR professionals themselves to confidently prepare for the implications of our departure from the EU.
Where do we currently stand?
If a deal is agreed: Assuming a withdrawal agreement in any form is passed in the coming weeks, an official transition period will last until the end of 2020, and could be extended until 2022. During this period, the UK will still be bound by EU rules, meaning very little will change.
By the end of this period, we will have had time to ensure our organisations can adjust to the (currently undecided) new relationship between the UK and EU, whatever that turns out to be.
If there’s no deal: If our government and the EU are unable to ratify a deal or come up with a viable way forward (the current deadline is 12 April, though this may change), then the existing legislation means we will leave. At that moment, EU laws, regulations, courts and institutions cease to have any jurisdiction in the UK.
While we still don’t know if a withdrawal agreement will be ratified, and the prospect of a no deal Brexit looms ever larger, there are clear areas of potential risk that HR needs to address regardless of the outcome…
Many areas of UK employment law owe their existence to the EU and are unlikely to change, having woven themselves into the fabric of our society. Equally, the UK’s continued membership of the European Convention of Human Rights means that trade union protection and humane employment practices are not immediately at risk.
However, while the government has said there will be no radical changes to employment law after Brexit, there are various pieces of EU legislation that employer associations, business groups and industry lobbyists are likely to attempt to have watered down or removed completely post-Brexit.
For instance, items that have come in for criticism in the past and could be at risk are:
Protection for agency workers, which gives them the right to equal working conditions as permanent staff after 12 weeks
- The unlimited cap on awards for discrimination
- TUPE, the regulation that preserves employees' terms and conditions when a business is transferred to a new employer
- Holiday pay during sickness, where employees on long term sick leave can carry unused holiday over into the next year
- The inclusion of commission and overtime in holiday pay calculations
This is pure speculation, of course, but it illustrates that proactive HR teams can prepare by understanding where potential risk might lurk. Then sketch a plan to mitigate the impact so they can meet any future changes on the front foot.
If you’re an employer with offices in Europe, how you handle the transfer of people data between sites after Brexit is an issue on which you will need a clear understanding.
Seek explanations and assurances from your software provider on how this will be managed, because where the UK will stand on GDPR after Brexit is another thing that is still unclear.
GDPR states that data can be shared between European Economic Area (EEA) states but can only be transferred to ‘third countries’ outside the EEA if those countries are deemed to have adequate data protection laws in place.
This is where the complication arises. After Brexit, the UK ceases to be an EEA state and immediately becomes one of those ‘third countries’; whether our data protection laws are deemed adequate is yet to be determined.
Because XCD's HR and Payroll software is built on the Salesforce cloud, we have been able to assure our customers of the continued smooth operation of their data processes across European borders post-Brexit. We would urge HR leaders to seek similar assurances from their providers.
Additionally, this document from the Information Commissioners Office sets out six steps organisations can take to prepare for data protection compliance post-Brexit.
If you’ve wondered what the UK’s version of post-Brexit GDPR (UKGDPR) might look like, information on the government's current working document can be found here: Exiting the European Union data protection electronic communications
Brexit has introduced a number of exacerbating factors into an already fraught talent landscape. Following the referendum in 2016, the UK became a less attractive employment destination for talented European workers overnight, and the continuing turmoil and uncertainty around the negotiations has only deepened that negative perception.
Organisations in industries that rely on seasonal European workers are already feeling the pinch, and this doesn’t look likely to get any easier. Whatever type of Brexit we end up with, assuming we do leave, it’s going to get more difficult for EU citizens to come to the UK to live and work.
EU nationals currently residing here can apply for settled status, while those who wish to move here post-Brexit may find that they do not have the automatic right to do so, though these workers may be able to use the European Temporary Leave to Remain scheme to live and work here for up to 36 months.
Organisations that employ EU citizens in the UK are advised to review the government’s advice on settled status for EU citizens and their families, and the EU settlement scheme employers’ toolkit.
Uncertainty and confusion have been the key themes of Brexit since before 2016, but HR’s risk analysis and contingency planning should be clear and calm.
The powerful reporting and analytics tools within XCD’s HR & Payroll software can help support this process, while the impact analysis we routinely perform on legislative updates will help our customers ensure they remain compliant.
In uncertain times, many organisations are turning to the flexibility of cloud-delivered HR & Payroll software. You may be interested in our special guide: Moving HR & Payroll to the cloud.