16 October 2019
What does Brexit mean for jobs?
We consider the ways that leaving the EU on 31 October could impact on individuals at work.
Research has suggested that over 500,000 jobs could be lost throughout the UK if we leave the EU without a deal and that 1.2 million jobs would be lost across the EU at large.
That same research, which was commissioned by the Belgian government to assess the economic impact of Brexit on all of the countries in the EU, suggests that leaving the EU with a deal (“soft Brexit”) could still spell job losses but significantly less (around 140,000 in the UK).
Investors and employers alike do not relish uncertainty. With the UK’s exit day now only around two weeks away, we still have little clarity on the nature of the UK’s relationship with the EU going forward. Whilst the Queen’s Speech made reference to the UK leaving the EU with a deal, no agreement has been reached yet.
A No Deal Brexit is the scenario with the highest level of continued uncertainty for UK employers and employees.
This uncertainty can, and is already, impacting on UK businesses; it makes the UK a less attractive place to invest; a more uncertain place to base a business and staff.
A No Deal Brexit is likely to increase the potential of further job losses throughout the UK and Europe. The industries that are most likely to be affected include: financial services; food and drink; automotive; transport; pharmaceuticals; the textile industry; and petrochemicals.
Further jobs may be relocated
To try to mitigate the impact of Brexit uncertainty, more employers may look to relocate jobs away from the UK to cities within the EU or elsewhere.
A number of companies have already moved their EU Headquarters away from the UK to elsewhere within the EU, in anticipation of Brexit. Precise figures are not available but we know multiple research studies suggest Brexit-related job losses are already in their thousands.
As a team, we’ve advised a number of senior staff who have faced the choice of relocating their families to other EU countries, including France, Germany and Holland, or losing their jobs.
The risk of facing potential relocation may be higher for those working in financial services. The UK’s financial sector’s relationship with the EU going forward will be based on equivalence; the UK looks set to lose ‘passporting’ rights i.e. the ability to sell financial services across the EU bloc after Brexit.
Over a third of the UK’s largest financial services employers have said they plan to relocate some jobs away from the UK due to Brexit; it's estimated over 10,000 jobs could be affected.
Can you be compelled to relocate? Many employment contracts include mobility clauses. This type of clause says an employee can be relocated to a different work location at an employer’s request; these clauses vary in scope, for example whether relocation overseas is mentioned specifically.
In practice, whether an employer can rely on a clause like this in your contract to relocate you and your family, depends on whether it is reasonable to do so. Reasonableness is assessed by looking at your own personal circumstances, including how your employer consulted with you, the impact relocation would have on you and your family, and the ties you have to your current location.
This means that the vast majority of individuals facing potential relocation outside of the UK to an EU country should be offered redundancy as an alternative.
Loss of right to work in the UK/EU
Over 3 million EU citizens live in the UK. Over 1 million UK nationals live elsewhere in the EU.
The UK Government is directing EU citizens who are already living in the UK apply to the EU Settlement Scheme and/or for British citizenship to continue to live and work in the UK after 31 December 2020 (the end of the transition period).
The picture remains unclear after December 2020. UK citizens look set to lose their right to automatically be able to live and work in EU countries and vice versa.
Many UK nationals living throughout the EU still face an uncertain future at this stage with the steps they have to take to try to protect their position varying from country to country.
This month the UK Government announced it would introduce a points-based immigration system in respect of EU nationals upon leaving the EU but we don’t know the detail of this yet; a matter for debate has been what the salary threshold would be for visas for skilled workers.
It has been reported than more than 60,000 NHS workers might not be eligible to continue to work in the UK if the minimum salary cap is raised from £30,000 to the £36,700 proposed by the think tank, The Centre for Social Justice.
So despite the adverts advising individuals to prepare for Brexit, it is clear that the position for those from the EU looking to work in the UK after 31 December 2020 remains unclear.
Rise in discriminatory treatment
With the road ahead remaining unknown, UK employers could be deterred from recruiting and/or retaining EU citizens going forward. At this stage, it would be difficult for employers to know whether they would qualify for a visa after the end of the transition period.
The media has also already reported on rising tensions between different nationalities in some workplaces; Brexit is an emotive issue which some individuals have used to support a narrative that UK jobs ought to be for UK citizens.
Treating EU job applicants or current employees less favourably for reasons related to their nationality remains potentially discriminatory under the current law.
If an employer treats an individual less favourably as a result of being an EU, rather than UK, citizen, this may be the basis for a race discrimination claim.
In practice, this may not prevent a less favourable approach being taken; discrimination can be hard to prove.
If you think you are being singled out because of your nationality, please contact us.
Erosion of EU-based employment rights
Many of the fundamental rights UK employees enjoy derive from EU legislation: from our right to paid holiday, protection from discrimination and the right to take parental leave.
Withdrawal from the EU does, in theory, allow the UK Government to reduce and/or remove rights enjoyed by UK employees. However, nothing would change immediately. Any proposals would have to be considered by the UK Parliament.
Commentators have previously suggested that potential targets by the UK Government for change could include: scrapping the working week maximum of 48 hours, setting a cap for discrimination compensation, diluting the protection offered by TUPE and scrapping much of the protection from discrimination afforded to agency workers.
There are many uncertainties facing employees and the labour market. Unfortunately those uncertainties will remain for the foreseeable future whilst negotiations over our future relationship with the EU continue.
In this situation, it is even more important for employees to understand their existing employment rights fully, so they are as prepared as possible for any future change to their employment relationship triggered by the ever evolving legal and political climate we currently face.
If you need employment law advice, please contact our team on 0808 175 8000
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