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Keep Calm and Brexit On

by Published on

We now know we face an EU free future, but what does that actually mean for business owners, directors and managers?

Brexit Point Keep Calm

The dust has hardly settled on the rather surprising news that emerged in the early hours of June 24th, the UK has voted to leave the European Union. Of the 33.5 million voters 52% cast their “X” in the leave box and now begins the rather onerous task of unpicking and re-aligning our relationship with the EU.

We’ve covered the topic on a couple of occasions recently and confirmed that it is very unlikely major changes will happen in the near future.

Many excited Brexiters may now be expecting immediate changes to laws governing our lives, including those impacting the workplace. The reality is that our decision to leave the EU is unlikely to lead to any sudden changes, in fact a large number of the EU originated employment laws are likely to be retained as they are broadly accepted as positive for staff and business owners. Now we know we’re Brexiting here below are the main considerations.

  • Cameron has already announced that he is resigning and serving out his notice period which takes us to the Conservative party conference in October. That’s up to four months where very little is likely to change and we have an opportunity to adjust to the new relationship we will have with the EU. Many political commentators suggest the whole process to untangle ourselves from the European Union could take anything up to two years, perhaps even longer. Whilst we work through this withdrawal and lengthy negotiation it is expected that it will be business as usual.
  • UK Employment laws may feature as a “bargaining chip” in future trade negotiations with the EU, especially if there is a suggestion of streamlining our legislation in favour of business owners. [see Beecroft Report] . The risk of adopting any radical new laws to improve productivity and reduce costs to become more competitive may well attract retaliatory moves by the EU.
  • Whilst many owners may have initially reacted negatively to new EU laws they have now become standard policy for our thousands of micro businesses, SME’s and PLC’s. The laws have been welcomed by employees and unions alike and changing at this time would be considered a political mistake that could quickly backfire on the new leader.
  • There have been suggestions that discrimination awards could be capped to assist business, this may be one of a number of areas that are reviewed.
  • Case Law will prove testing for our courts especially where a matter related to legislation previously governed by EU directives. This poses specific concerns for businesses operating across Europe not just domestically in the UK.
  • Labour mobility had historically been fairly easy with free movement available to EU citizens. Having decided to leave the EU those free movement rights are now under scrutiny and subject to review. Of course this works both ways for those wishing to work in the UK and UK citizens wishing to work in Europe. This will prove a key point in future negotiations and our need to retain strong trading terms with our European partners in addition to servicing the needs of domestic businesses who have relied upon a steady flow of EU labour.
  • Businesses with staff working in EU countries or EU citizens employed in their company should monitor developments closely but in the short term we’re not expecting to see a wholesale deportation programme. One would hope common sense can prevail in these cases and a measured approach to any subsequent changes introduced to avoid undue stress on individuals and businesses alike.
    The vote to leave the EU has surprised the City and impacted financial markets and as a consequence the value of the pound. Big corporations, least of all the financial institutions don’t like change yet change it is that we have voted for. A period of uncertainty will continue for some time until we actively engage in the negotiations to retain trade whilst unravel our commitment to the EU. Meanwhile our European neighbours may now start to questions their relationship with the Union which may in turn lead to more fundamental change across Europe.

The fact is no one knows for certain the outcome of this decision but the objective must be to work through the mass of legislative and bureaucratic detail to deliver an outcome where our economy can not only survive but actively thrive. No doubt we will return to this subject in the future and as matters develop, rest assured we will keep you posted on employment related changes as they’ll impact you and your business.
If you have any queries with regard to the handling of any issues arising out of our decision to leave the EU feel free to contact Sally or Angela call 0191 2328451

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