As the 23rd June - the UK’s ‘In/Out’ referendum date – approaches, companies in Asia with operations in the UK and other European countries should start to consider the implications of Brexit.
The UK electorate will vote on whether the United Kingdom should ‘remain a member of the European Union or leave the European Union’. If the majority votes to leave, the United Kingdom will formally exit the EU, regaining parliamentary sovereignty over those laws currently derived from EU legislation. As key areas of employment law are often derived from EU legislation, these might fall away automatically, be abolished or be amended.
If the UK exits the EU it will then have to decide whether it wishes to continue abiding by EU derived employment laws, or whether to make changes to domestic legislation. It is not anticipated that wide sweeping changes will be made, however there are a number of areas where changes may well occur, including:
- working time;
- agency workers;
- bankers’ bonuses; and
- freedom of movement.
Asia based employers with operations in the UK and the EU should prepare for Brexit by:
- identifying whether the UK entity employs EU nationals and whether EU entities employ UK nationals: changes to work permit/immigration rules will catch these categories of employees.
- consider how future staffing needs may be met if prospective employees are not able to move as easily between the UK and the EU.
- review current HR benefits to understand which derive from EU legislation and which derive from UK legislation and what the company’s position would be in relation to EU derived rights if the UK removes reciprocal obligations.
Although a departure from the EU will not occur immediately even if the UK votes to leave, if employers anticipate making changes to their HR practices, consent, consultation, harmonisation, authorisation and immigration issues will all take time to resolve. It may be prudent, therefore, to start putting plans together well in advance.
A more detailed look at the employment related issued associated with a Brexit are discussed here: http://www.herbertsmithfreehills.com/insights/issues/uk-exit-sector-by-sector/tabs/employment-and-pensions?wtr=brexit- hub-sectors-employment.