Employers are struggling to decipher Brexit's impact on legislation and recruitment, but Tar Tumber highlights the looming challenges.
06 November 2018 | Tar Tumber
The EU (Withdrawal) Act 2018 allows the UK to 'cut off' EU law and prevents EU institutions from affecting UK legislation.
For continuity, the act will absorb applicable EU legislation into UK domestic law, and the government will decide on what to retain, amend or discard.
In the case of 'no deal', the government has confirmed two areas that will be affected:
- Employer insolvency: Currently UK and EU workers in the UK can make claims in the case of employer insolvency; UK employees in the EU can make similar claims but in a 'no deal' situation, they'd need to check legislation in their host country.
- European Works Councils: EU law entitles workers to request EWCs be established to communicate issues affecting staff across two or more EEA states. In a 'no deal' scenario, UK businesses with existing EWCs will need to amend the agreements if no reciprocal arrangements are in place.
- Withdrawal from the EU is unlikely to immediately impact the employment relationship. That said, if a future government chose to amend employment law, these are the likely areas:
- TUPE transfers: Specifically the opportunity to harmonise terms and conditions of all staff;
- Holiday pay and what is included in the calculations;
- A compensation cap could be applied in discrimination tribunal cases; and
- Agency Workers Regulations could be amended, removing day one/week 12 rights.
Since the referendum, several industries have reported issues with recruitment and retention.
The government has said EU nationals who have lived in the UK for five years plus will be able to apply for settled status to continue living and working in the UK.
EU nationals with less than five years' residency can apply for pre-settled status, and then settled status at the five-year mark. This scheme will launch by the end of March 2019 and remain open until 30 June 2021.
From then, it appears EU nationals will not receive preferential treatment over non-EU workers and a new points-based system will apply to all.
There are also imminent changes employers should be aware of 'back home':
Executive pay reporting duty - 1 January 2019
The Companies (Miscellaneous Reporting) Regulations 2018 require UK listed companies with 250 or more employees to publish the pay gap between their CEO's total remuneration and that of their average worker.
This must be published annually for financial years beginning on or after 1 January 2019. The first reports will be due on 1 January 2020 (or when the financial year ends in 2020).
Payslip changes - 6 April 2019
1) Where an employee's pay varies (under variable or zero-hours contracts), the employer must detail the total number of hours for which the employee is being paid to provide transparency of payment.
2) Itemised payslips must also be provided to 'workers' and not just employees from this date.
Tax on termination payments - 6 April 2019
Employers will be liable to pay Class 1A national insurance contributions on termination payments above £30,000 that are subject to income tax by the employee. This change was delayed from April 2018.
Parental bereavement leave - 2020
The Parental Bereavement (Leave and Pay) Bill will grant at least two weeks' leave after the loss of a child up to the age of 18 or a stillbirth after 24 weeks of pregnancy.
Employees with 26 weeks' continuous service will be entitled to paid leave at the statutory rate and other employees will be entitled to unpaid leave.
There are also legal challenges to the gig economy and 'joint employment' status, which could derail the outsourcing concept.
Turbulent times lie ahead - we'll keep you updated.
Tar Tumber is director of employee relations at Workplace Law, part of International Workplace