Is urgent HR action required after the Brexit vote?


SHORT ANSWER: Yes

LONG ANSWER:

So, the UK has voted to leave the European Union. This decision puts us in a position of some uncertainty and this is likely to last for months, if not years, as the process of leaving the EU is unlikely to be a speedy one.

However, it’s possible to take some action within your organisation to deal with the anticipated changes that leaving the EU will bring. Here are 3 examples:

Holiday Pay

You may recall the case of Bear Scotland and others v Fulton and others [2014] UKEAT 0047/13/0411, a key ‘EU’ case that ruled on the issue of how holiday pay should be calculated. In this case, the Employment Appeal Tribunal (EAT) held that regular overtime - if an employee is required to carry it out at the request of their employer - should be included in the calculation of their holiday pay. Holiday pay was defined as normal pay i.e. ‘that which is normally received’ by the worker and could, therefore, include travel allowances, payments for travelling to site and other such payments. The ruling caused shockwaves throughout the UK business community, with organisations calculating that the cost of implementing the decision could run to millions of pounds. There was some comfort in the ruling, nonetheless, in the statement that, where there is a gap of 3 months in unclaimed holiday underpayments, no such claims are likely to succeed. A 2-year cap was also placed on claims lodged on or after 1st July, 2015. The status of non-compulsory overtime was also left ambiguous. Given the decision to leave the EU, you may wish to reconsider any proposals to contractually enshrine employee rights on overtime pay, particularly in relation to voluntary overtime - UK law is less generous than EU law in this regard.

Staff resources

Do you have staff from the EU or were you thinking of recruiting staff from the EU? If so, you may need to review your staffing resources and consider whether you will need to plug any gaps that might be left if key staff are unable to remain in the UK for work or if you find yourself unable to recruit staff from the EU because they’re uncertain about their future in the UK. Although the free movement of workers is a central issue that is likely to be a key requirement by the EU if the UK wishes to retain access to the single market, the question of whether such a controversial term will, in fact, be negotiated in or out as part of a Brexit deal is debatable. It is therefore wise for you to begin considering how to manage this risk in case it becomes a reality.

Restructuring

One of the things you might want to start thinking about is whether to restructure your whole business set up. Perhaps you might create a UK registered subsidiary, or relocate all or part of your business outside of the UK? Remember that the TUPE Regulations will apply to all business reorganisations and therefore the TUPE procedures will have to be followed, including the requirement for consultation. You might also have to consider the contractual implications for staff and whether any changes, for example, to the entity employing them, will need to be reflected in new employment contracts.

WHAT YOU SHOULD DO NOW:

1 Conduct an HR review, covering staff contracts, skills resourcing and staffing structure.

2. Identify what changes will need to be made in the interim period between the Brexit vote and its implementation.

3. Begin planning for post-implementation of Brexit changes, but keep these plans tentative until timescales and guaranteed actions are declared by the Government.

If you think you need advice on how Brexit might affect you, contact Greycoat Law for a free initial consultation to find out whether we can help you: 020 8989 9111 or practice.manager@greycoatlaw.co.uk


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