BEERG: Brexit Is Happening. What Does That Mean for Employers?

December 13, 2019

Prime Minister Boris Johnson’s victory brings certainty that January 31, 2020 means Brexit—and for employers, work to do on work visas, data protection, European Works Council laws, and a new UK labor code.

The Withdrawal Agreement that Johnson negotiated with the EU provides for a transition arrangement which runs to December 31, 2020.  During this time, while the UK will no longer be a de jure EU member, it has agreed to act as if it were a de facto member and will follow all EU laws and rules during 2020.  In effect, nothing changes in practice on February 1 next year.

January 1, 2021 is an entirely different matter.  What happens then will be dependent on whatever deal, if any, the UK reaches with the EU.  Given the complexities involved and the number of issues that have to be negotiated between the parties, it is highly unlikely that anything of real substance can be achieved in a year.

New conservative coalition, new policy priorities:  As Professor Simon Hix from the London School of Economics writes, “Well, it’s not going to be a slash-redtape/libertarian Singapore-on-Thames Brexit now.  Those new Tory MPs from the North and Midlands will demand a Brexit that saves manufacturing and minimizes the effect on public finances.” 

All things considered, it is probably best for business to work on the assumption that the UK will be outside the scope of EU law completely from January 1, 2021, and to take steps accordingly.  If your EWC is based in the UK, time to move it to another jurisdiction.  Ireland remains our recommendation of choice, followed by Belgium. 

Check that you have measures in place to allow for the free flow of data from the EU to the UK in the event that the EU has not issued a “data adequacy” decision allowing data to be transferred to the UK before December 2020.  This may be easier said than done, as the main procedure to allow for continued data flows, Binding Corporate Rules, is under challenge in the European Court, with a preliminary ruling expected on December 19. 

"Free movement" no longer:  It is only when detailed rules on work permits and travel visas are published by both UK and the EU (and individual EU Member States) that businesses will be able to plan how to handle these issues.  But UK/EU “free movement” is dead and things will never be the same again.  Where once there were open borders, now there will be barriers.

Read the full BEERG Brexit Briefing

Read the full BEERG Global Labor Newsletter.