Implications of Brexit for Employers

Tuesday, June 13th, 2017

On the 23rd June 2016, the UK voted to leave the EU. On the 29 March 2017, the government triggered the mechanism for leaving the EU under Article 50 of the Treaty on European Union. Whilst this has made UK’s planned departure from the EU clear to all, the implications of such departure are far from clear for EU nationals who live and work in the UK as well as their current and prospective employers.

 Current Position

The UK has two years to negotiate the exit provisions from the EU, which are scheduled to complete by the 29th March 2019. The UK remains a full member of the EU until the negotiations have been concluded. As such all the rights and obligations of the EU membership continue to apply until then and EU nationals still have the treaty rights to live and work in the UK as they did before the referendum. Since the vote to leave the UK, it has been reported that some prospective employers are asking EU nationals to see proof of permanent resident status, as well as reports of employers refusing employment, promotions or offering only fixed-term employment contracts to the EU nationals. The purpose of this note is to shed some light on the obligations of employers until the negotiations of Brexit have concluded and/or until such time that the new rules and regulations determining the status of EU nationals come into force.

Right to work in the UK

It is unlawful to employ someone who does not have the right to live and appropriate permission to work in the UK. Employers face potentially severe civil and criminal sanctions if they fail in their duty to prevent illegal working. Employers are required to conduct specified right to work checks on all prospective employees so if the employment is subsequently found to be unlawful, this provides a statutory excuse for the employer. An employer must refuse employment to someone who does not have the right to work in the UK. The above vote and decision to trigger the Art 50 do not yet affect the free movement rights of the EU nationals and so the nationals of the following countries are free to live and work in the UK:

Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland.*

An employer must carry out the above checks on both EU and non-EU nationals and in doing so must not be discriminatory. This means that employers must carry out the checks as above on all employees, including British nationals. Whilst an employer must refuse employment to someone who does not have a right to work in the UK, it must be careful so as to not discriminate against individuals by assuming that they do not have such right. This includes EU nationals.

An employer must not, therefore, refuse employment or employment benefits to someone on the basis that an individual is from one of the EU countries, or due to an assumption that an EU national does not have a right to work in the UK, or that he/she may not have such rights in the near future. An employer, in doing so, could potentially be in breach of discrimination legislation.

Discrimination

The Equality Act 2010 prohibits discrimination on the grounds of race which is one of the nine protected characteristics covered, with others being age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, religion or belief, sex and sexual orientation. Race includes someone’s nationality, colour and ethnic or national origins.

The EqA 2010 protects a wide range of individuals within the field of employment, occupation and vocational training against discrimination, harassment and victimisation. It protects both job applicants and those who are already “in employment”. This can be under a contract of apprenticeship, a contract of employment, or a contract personally to do work. It includes employees, employee shareholders, workers and a wider category of individuals who are self-employed (provided that they are “in employment” and that their contract obliges them to perform the work personally).

An individual could have a claim for direct discrimination on the basis of their nationality (race) if they were treated less favourably because they are a national of one of the EU countries. Less favourable treatment can include refusing employment, training, pay rise, promotion or offering different contract terms i.e. zero hour or fixed term contracts. Individual may also have a claim of an indirect discrimination if a business puts in place a policy that puts EU citizen at a particular disadvantage compared to non-EU citizens. A policy whereby those without permanent residence are placed on a fixed term contract is likely to be deemed such disadvantage. It is also unlikely that the employers would be able to rely on the defence, that the policy is justified as being a proportionate means of achieving a legitimate aim.

Harassment in the Workplace

Employers must also ensure that they comply with their responsibilities to prevent bullying and harassment, as they otherwise may be held liable for any harassment suffered by their employees. An employee may have a claim against the employer for harassment if they are subjected to unwanted conduct related to race, which has the purpose or effect of violating a person’s dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment.  Conduct related to race covers, for example, shunning someone because of their nationality, making comments about their accent or referring to general assumptions about someone’s culture etc. The conduct may be intentional bullying and may be unintentional or subtle and insidious. It may involve nicknames, teasing, name calling and other behaviour which may not be intended to be malicious but nevertheless is upsetting. It is also possible to make a complaint of harassment where the individual is not on the receiving end of the conduct but is a witness to it and it has a negative impact on their dignity at work or the working environment. Given the recent reports that the harassment of EU Nationals in the UK is on the rise it is crucial that employers provide appropriate training to their staff and have updated equality, anti-bullying and harassment policies in place.

Certain steps in the uncertain future

As the uncertainty over the future status of the estimated three million EU nationals, who currently live in the UK remains, it is clear that employers need to plan for the future. Special care must be taken to ensure that any such planning does not expose the business to costly discrimination claims and potential damage to company reputation. There are a number of measures that employers can put in place to reduce such uncertainty.

Employers who rely on EU employees should have a contingency plan for Brexit to manage uncertainty by auditing their workforce, addressing potential staffing shortage and budgeting for additional costs. The employers should also be up to date with Brexit developments and monitor the potential end date for the free movement rights of the EU nationals.

The term within a contract that allows the employer to dismiss an employee without notice, if they lose a right to work in the UK, with a corresponding obligation on the employee to keep the employer informed of any potential changes to their status could be included in the contract. There are numerous considerations that employers must have when alternating the terms of employment.

Employers should also review their equal opportunities, anti-bullying and harassment policies to reduce the risk of any discrimination claims from arising, as well as their grievance/disciplinary policies in an unfortunate event that they do.

At Hanne & Co we understand that the burden on the employers to keep up to date with the current developments can be quite onerous. Our experience suggests businesses, that provide training to their staff on recruitment and dealing with any allegations of discrimination at the workplace, as well as those who reassure their EU workers that they have the support of the employer will generally be able to reduce the risk of costly discrimination claims from arising.  The policies discussed above are crucial in setting the employer’s approach to discrimination and provide the basis for such training.

If you think you may be at risk of a discrimination claim from arising, need our assistance with drafting any of the policies mentioned above, or need a one off employment advice and/or continuous employment support, please contact our Employment Department Team which is led by David Taylor, Employment Solicitor and a partner at Hanne & Co.

Justina Ricci –    Employment Department

*Note: Croatia joined the EU on 1 July 2013. Croatian nationals are free to come and live in the UK for up to three months but face certain restrictions in relation to taking employment. For more information on the right their right to work visit www.gov.uk;