Current state of play
- Workforce regulations - UK legislation governing how employers must treat their workforce is heavily influenced by EU requirements. One example is the maximum working week. Another is the restricted right of employers to vary the contract terms of employees they acquire when taking over another business.
- Employing workers across borders - It is a fundamental principle of EU law that workers can move between member states without restriction. This means that UK citizens can work in other member states without needing a visa or residence permit, and vice versa. It also means that, in principle, such “cross-border workers” are entitled to receive the same social benefits as the citizens of their host member state, such as state pension benefits and access to the national healthcare system.
- Providing services across borders - EU law makes it easier for service providers based in the UK (like accountants or travel agents) to do business in other member states. In many sectors, national regulators cooperate to ensure that if a service provider passes checks in its home member state, it does not have to go through those same checks in its host member state. In the financial services sector, this is achieved through the so-called “passport” system.
- Remuneration in the financial sector - EU remuneration rules in the financial sector impose a cap on bonuses and require the remuneration of senior employees to be publicly disclosed.
- Pensions - EU prohibitions on age and sex discrimination are highly relevant to pension schemes. EU law also provides a framework allowing pension schemes that are approved to operate in one member state to admit members in other member states.
What should I be thinking about now?
- Employing workers across borders - How would a UK exit from the EU affect my ability to hire staff? Would existing staff need visas and/or residence permits if I wanted to second them from the UK to work for the firm in another European country or vice versa? Would I find it more difficult or costly to employ UK citizens in other European countries, or European citizens in the UK, if their rights to access benefits in their host country were restricted?
- Workforce regulations - Would I want to change my approach to workers’ hours if UK law became more flexible in this area? Would the UK legal framework on workers’ rights on a business transfer be likely to change if Britain left the EU? If so, how would that affect my approach to buying businesses?
- Providing services across borders - Do I currently rely on regulatory approval from my home regulator to operate in other EU member states? If so, how might I manage interacting with additional regulators if I could no longer rely on home regulator approval? Would it help to establish a local subsidiary?
- Remuneration in the financial sector - What would be the effect for a financial institution currently subject to the bonus cap, or other EU remuneration requirements, if the UK left the EU and disapplied these for UK-based firms? How would an EU-based firm attract and retain talent in its UK business?
- Pensions - How would I manage my firm’s cross-border pension scheme if it became subject to different regulatory requirements in different European countries?
The answers to many of these questions will depend upon the nature of a post-Brexit UK/EU relationship.