'No-deal' Brexit: What would this mean?

Guidance documents released last week outline implications for employers if the government fails to reach a Brexit deal.

Throughout the Brexit negotiations process there have been growing concerns that the UK will have to leave the EU without reaching a deal. Currently, a significant amount of modern employment practices, alongside European trading, is regulated by provisions that come from the European Union. As a result, the government has outlined what changes employers should expect if faced with a Brexit ‘no deal’ scenario.

The guidance document entitled ‘Workplace rights if there’s no Brexit deal’ explains that all existing worker rights and protections, including working time regulations and family leave entitlements, would largely remain the same regardless of the success of the negotiations. Speaking at a press conference following this announcement, Secretary of State for Exiting the European Union, Dominic Raab, stated that domestic law already exceeds the EU in these areas and that existing EU provisions would be transferred into UK legislation following Brexit day. He further confirmed that any amendments made to these provisions would only be done to reflect the fact that the UK is no longer an EU country.

All UK-based workers would also still be protected by existing law for employer insolvency, which currently allows them to claim redundancy related payments from the government when their employer has gone out of business. However, workers within the EU who work for a UK-based employer may not always be protected under the national guarantee fund established in their respective member state. This is because there are variations in how each country has implemented insolvency law.

A ‘no deal’ scenario also casts doubt over existing arrangements for the creation of European Works Councils. Under existing provisions, employees based within organisations that have a workforce spread over more than two Member States can request a body to be established representing employees in discussions on transnational issues. The statutory framework for the formation of these bodies is currently covered by European law. If this option is to continue, a separate reciprocal agreement would have to be made with the EU. Until such time, no new requests for the formation of a Council will be able to be made although existing operations may be able to remain in force.

In the event of a ‘no deal’, the UK would also no longer have access to the European Single Market. Therefore, employers would have to submit customs declarations on all EU trade, which may require the employment of customs brokers or warehousing. This could be costly for smaller businesses so it is advisable for employers to familiarise themselves with existing guidelines for importing and exporting outside of the UK.

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