Tag Archive: Brexit

Despite Brexit, businesses need to start preparing for the General Data Protection Regulation

The Information Commissioner’s Office (ICO) has published an Overview of the European General Data Protection Regulation (GDPR) for organisations. The changes anticipated by GDPR are wide-ranging and require a cross-organisational compliance framework that will take time to assess and implement effectively. Organisations which process data within the UK should start their planning now if they have not already done so.

The result of the 23 June 2016 referendum on membership of the EU means that the Government will ultimately need to consider the effect on the GDPR. However, Brexit should have little, if any, impact on GDPR compliance planning. The GDPR will come into force in the UK without the need for implementing legislation in May 2018, at which time it seems likely that the UK will still be a member of the EU (as exit negotiations are likely to take at least 2 years and have not yet been triggered).

Following the UK’s eventual exit, if the terms of the UK’s withdrawal from the EU result in the UK remaining in the EEA, it is likely that the UK would be required to comply with the GDPR. Even if the UK is outside the EEA, the practical reality is likely to be that substantial compliance with GDPR principles will be required in any event. In order for data to continue to be transferred from other EU countries to the UK, the UK will have to be able to demonstrate that it provides adequate protection for the rights of employees whose personal data is transferred. Demonstrating such adequate protection would be likely to require the implementation of much of the GDPR in national law.

The ICO has also expressed the view that UK data protection legislation requires reform in any event, and it seems likely that they would press for UK law to conform to a large extent with the GDPR.

Key actions which organisations should put in place now include:

  • Put in place effective governance – Organisations should have a strong governance function in place, capable of impacting on and involving all parts of the organisation.  Cross department teams will be needed to ensure effective compliance with the GDPR including HR, IT, Legal and Data Protection or other compliance specialists. Make sure that decision makers and key people in your organisation are aware that the law is changing to the GDPR; they need to appreciate the impact this is likely to have including on employee data. The degree of change over the next couple of years is such that effective governance is going to be critical to implementing the changes effectively and in good time.  There will need to be ongoing governance in place regarding data flows, privacy notices and documenting privacy impact assessments in a way that hasn’t been seen before.
  • Audit data flows to be clear about the purposes and legal basis for processing – Increasing awareness of the rights of data subjects and the changes to the legal bases for processing are two very good reasons to do this. The GDPR will have a significant impact on how, and how much, employee data can be processed. Use of data (including big data) will impact on all aspects of the employment relationship from recruitment, to compensation and benefits, mobility of your workforce and structural change and growth. HR involvement will be key to ensuring (i) that organisations can continue to process employee data for the purposes which are critical to both day to day management and the achievement of strategic objectives and (ii) that organisations are not exposed to the risks of the substantial sanctions which may be imposed for misuse of employee data under the GDPR.
  • Implement training within your organisation – Many data privacy breaches are caused by simple errors.  By having effective and memorable training processes in place an employee is more likely to think about their actions and hence a breach is avoided.  Effective training on good practice will be valuable whatever legislation is ultimately in place.

For a copy of the ICO Overview click here. The ICO has also published ‘Preparing for the GDPR: 12 steps to take now’ which provides practical guidance.

 

Permanent link to this article: http://www.dlapiperbeaware.co.uk/despite-brexit-businesses-need-to-start-preparing-for-the-general-data-protection-regulation/

Brexit: 10 steps for employers to take now

Following the vote in favour of Brexit on 23 June,  there is uncertainty as to what comes next.  Much will depend on who replaces David Cameron and what the government’s Brexit strategy will be, how and when Article 50 of the Lisbon Treaty is invoked to trigger the formal exit process, and how the EU approaches the negotiations with the UK.

In the meantime, there are no immediate changes to employment or immigration law as a result of the UK’s decision to leave the EU, so it is business as usual for now, although organisations should address the immediate after-effects of the referendum result and take steps to facilitate changes that may become necessary in the longer term.

Below are 10 STEPS FOR EMPLOYERS TO TAKE NOW.  You can also click here to listen to our recent webinar considering the implications of Brexit on your workforce and HR legal strategy.  Click here to access the webinar materials.

  1. Manage the uncertainty which the Brexit vote may have caused among the workforce, both in the UK and internationally.   Where possible, continue to reassure staff that there will be no immediate impact and that any change in the longer term is likely to be informed by the new relationship between the UK and the EU.   However, don’t make promises that you may not be able to keep.
  2. In view of the reported increase in incidents of racial abuse across the UK in the wake of the referendum,  remind staff of the business’s policies on diversity and dignity at work. Make it plain to all staff that discrimination and harassment will not be tolerated on any grounds, including on the basis of nationality or national origins (or in any other way on grounds of race).  There may also be divergent political views relating to the outcome or impact of the referendum, so you may also want to remind employees of the importance of tolerance and respect of others’ views in the workplace.   This may also be a fitting time to remind managers of the importance of dignity at work policies and briefed on how to deal with any incidents or concerns.
  3. If your business is considering organisational change as a result of the Brexit vote, normal employment law rules and protections will apply if there are, for example, consequent closures, reductions in force, changes to terms, relocations or business transfers.  Current employment law, EU derived or not, remains in place for the time being and there are no special rules or exceptions for Brexit related activities.  Should job losses be necessary,  selection criteria must be objective and not based on nationality.   Equally, where British nationals are affected by the relocation of jobs abroad, don’t assume that they will not want to consider transferring to the chosen location.
  4. Audit the immigration status of your workforce in the UK and across the EU.   While the rights of EU citizens to live and work in the UK and converse rights of UK citizens following the UK’s exit from the EU are currently unclear, an audit will enable the business to identify who may be affected if and when the current immigration rules do change.   It will also help to identify staff who might be able to secure rights to work in a jurisdiction if they transfer now to a different contractual arrangement or apply for an alternative immigration status.
  5. Where employees have been seconded from the UK to other European countries or vice versa, review the terms of the arrangements and any associated mobility policies to understand how these might be affected when the UK leaves the EU and to ensure that they are flexible enough to adapt to the change in circumstances if necessary.  Equally, ensure that any contracts that are entered into now provide suitable flexibility in anticipation of possible changes that may need to be made because of Brexit.   Staff based overseas who are paid in sterling will be affected by the drop in value of sterling, so consider whether you are obliged or prepared to agree any change in approach should you receive requests from affected employees.
  6. Discuss with relevant stakeholders the business’ approach to the implementation of the EU General Data Protection Regulation (GDPR), which comes into effect in May 2018 (likely to be before the UK exits the EU).   The timing has led to questions about the need for compliance in the UK, but the UK’s Information Commissioner has said that UK businesses should expect to comply with standards equivalent to those under the GDPR to enable them to transfer data around the EU for business purposes.
  7. Watch for announcements on the likely impact of Brexit and the change in government leadership on domestic UK employment legislation, such as tribunal reform and family leave for grandparents both of which may be delayed by the inevitable burden which Brexit will place on the Civil Service.  However, we understand that the new rules on mandatory gender pay reporting are expected to be implemented, although the timetable may be slightly delayed.
  8. Audit European Works Council (EWC) arrangements which might be impacted if, for example, the relevant EU legislation no longer applies to the UK;   where the EWC has been established on the basis of central management situated in the UK;  or if discounting UK employees means that the numbers in the EU workforce fall below the threshold at which an EWC is required.  Businesses with an EWC should monitor for potential changes to the relevant regulations and, taking account of the terms of their own EWC agreement, should consider and plan accordingly.
  9. Be aware that UK employment laws derived from EU legislation are unlikely to change any time soon.   The future of our employment landscape will depend on the deal that the UK negotiates with the EU.  Access to the single market may require the UK to sign up to EU social and employment policy including employment directives and regulations, in which case little if anything will change.    Alternative models are of course possible which may provide the UK with more flexibility to change more contentious areas of law such as the rules relating to working time / holiday pay and TUPE, but we do not expect any major changes any time soon.
  10. Keep a watching brief on Brexit developments and how they may impact your business to enable you implement and adapt plans accordingly.

DLA Piper’s Employment Group will be closely monitoring Brexit related matters and will keep you fully up to date on important developments via regular bulletins which will be accessible through Be Aware.

 

Permanent link to this article: http://www.dlapiperbeaware.co.uk/brexit-10-steps-for-employers-to-take-now-2/

EU referendum: UK votes out – what now for employers?

23 June 2016 will go down in history as the date the UK population voted to leave the European Union. Despite the magnitude of this decision, however, its employment law impact will not be felt immediately and employers will have a period of time to collect their thoughts. This is anticipated to be the start of a minimum 2 year period of negotiations to determine the UK’s future role on the global stage. There are a number of options to facilitate the UK’s ongoing relationship with the EU once the exit is formally instigated, and only time will tell which path will be taken.  For a broad overview of the implications of Brexit on all aspects of business, please click here.

In the meantime, the best approach is for employers to keep abreast of developments and have ongoing processes in place over coming months to review progress of the political wrangling. Careful monitoring will enable employers to get a feel for the likely direction of travel and assist them to address the potential implications for the rights of, and obligations towards, their employees.

The impact is unlikely to be straight forward. Politically it will be risky for any Government to seek to repeal employment rights which, although in many areas of employment law originated from the European Union, have now become enshrined into day-to-day business culture in the UK. A quagmire of uncertainty will therefore remain for some time to come. Whilst the UK may, in theory, anticipate stepping away from brand new European legislation such as the General Data Protection Regulation and Trade Secrets Directive, in reality this may not be possible.  Much will depend on the terms and timing of the UK’s new trade deals. We may, however, see previously hotly contested regulation such as legislation governing working time coming under scrutiny.

As well as the impact on employment law, employers will also need to plan for the UK introducing restrictions on the free movement of workers between the UK and the European Union and the potential that this has to diminish the talent pool available to UK employers.

The fate of UK driven employment law initiatives such as gender pay reporting and shared parental leave for grandparents will be in the hands of the Government and whilst there is no indication that existing legislative proposals will not be progressed, the political upheaval that is now likely to follow could impact on the timing of legislation in the pipeline, if nothing else.

With this in mind, we will be organising opportunities for our clients to come together to discuss how they are addressing Brexit, and to hear from our employment law experts on the key issues which arise in relation to both EU-derived, and UK, employment rights. We will be holding a global webinar next week. Please look out for our future alerts publicising the dates of these events.

If you have any immediate queries about the impact of Brexit on your business, please contact Tim Marshall, Joint Global Head of Employment, or Adam Hartley, UK Head of Employment.

Permanent link to this article: http://www.dlapiperbeaware.co.uk/eu-referendum-uk-votes-out-what-now-for-employers/

Brexit: what are the implications for employment law?

The possibility of a UK exit from the EU – colloquially known as a Brexit – is high on the political, business and media agenda. On 23 June the UK will hold an in/out referendum to determine whether we should remain a member of the European Union. Whatever the result, the vote is a historic moment, which could have seismic implications for the economies of many European countries and transform the UK’s future role in world affairs. Against this backdrop, the impact of a Brexit on UK employment law is a relatively minor issue in a much wider debate, but bears consideration. What are the key questions for employers?

The legal implications of a Brexit turn on both the mechanics of exit and the model for any replacement UK / EU relationship, both of which are currently unknown.  We do know that any formal exit would not happen for at least two years following a vote to leave. In the event of an ‘out’ vote, the UK would invoke Article 50 of the Treaty on the European Union and notify the European Council that it intends to secede from the EU; a controlled and negotiated process developing over the following two years would follow. In the immediate aftermath, therefore, a vote to leave the EU is unlikely to have a significant impact on UK legislation.

Following a vote to leave, there would be a number of options for the future relationship between the UK and the EU, including:

  • The Norwegian model: Membership of EEA and EFTA (access to the single market);
  • The Swiss model: Member of EFTA; many bilateral agreements;
  • The Turkish model: join the EU Customs Union, access the EU market under WTO rules; and
  • Possibly, a bespoke UK model.

It is possible that the UK would seek to follow the Norwegian model and become part of EFTA and the EEA in order to continue favourable trading relations with countries in Europe.   As part of this organisation,  under its current rules,  the UK would remain subject to most aspects of EU social and employment policy given that EEA member states are bound by, for example,  the Acquired Rights Directive,  the Collective Redundancies Directive,  the Working Time Directive and the Agency Workers Directive. This would have a knock-on impact on the UK courts as the EFTA Court (which fulfils the judicial function within the EFTA system, interpreting the EEA Agreement with regard to the EFTA States) is bound by ECJ case law.  As such,  ECJ case law would continue to have a significant influence in the UK courts. In this scenario, the impact on UK employment law would be likely to be minimal in the short to medium term.

The Swiss model is unlikely to be an attractive option, as it involves complex negotiation of bilateral trade agreements, under which the EU would be likely to require the UK to adhere to many aspects of EU employment policy.

In the event of an alternative relationship, the UK Government may have more freedom to depart from EU social and employment policy, although that may come at a cost. A Brexit would make it more difficult to recruit individuals from and move them within Europe and, as such, the talent pool available to UK business would diminish.  Visa requirements could make it difficult to bring overseas talent and skills into the UK and individuals may prefer to be located within the EU given the unrestricted movement that would afford to them.   This impact would be felt across a range of sectors including, for example,  financial services,  technology,  hospitality and construction. Depending on the relationship negotiated, however, legislation could remain largely stable, with implemented Directives and existing Regulations remaining (even then, treaties would still be affected and the Supreme Court would become the highest court for interpretation). Alternatively Regulations could fall away but Directives already enacted in domestic law remain.  EU driven domestic legislation might be replaced on a case by case basis – although presumably not without sufficient warning.

The UK Government would be unlikely to fully repeal existing employment laws which implement EU requirements for a number of reasons including that:-

  • A raft of wholesale changes to employment law would lead to unwelcome confusion and uncertainty for employers as well the potential for significant cost in complying with a revised regime
  • Many of the rules which flow from Europe reflect accepted standards of good industrial relations;   for example, requiring employers not to discriminate and providing for rest breaks and paid holiday;
  • Even if it leaves the EU, it is expected that the UK will nonetheless remain in a significant trade relationship with the rest of Europe (whether as an EFTA member of the EEA or through bilateral trade agreements).   Any of these relationships will only be possible if the UK retains a playing field which is largely level with the rest of the EU in terms of employment law regulation; A far more likely outcome of a Brexit therefore is that the UK employment law regime is left largely as is, but that the Government legislates to remove or change some aspects of the existing regulation which are particularly unpopular with British employers.   The main examples of EU employment regulation cited by UK business as burdensome and which would therefore be likely to change are (i) the inability to harmonise employment terms after a business transfer; (ii) the requirement to ensure pay parity for agency workers after 12 weeks; and (iii) various aspects of the working time rules including record keeping and holiday pay.

In terms of ECJ case law, even assuming a full exit of the UK from the EU and no continuing EEA/trade relationships (which is unlikely),   UK employment tribunals would not be able to immediately completely ignore pre-existing ECJ case law.   ECJ judgments subsequently become incorporated into UK law, either by legislation being amended to take an ECJ ruling into account or through the a UK court following the ECJ’s stance in its own case law, as it is currently obliged to do.     The UK system of precedent means that past decisions remain binding on the lower courts and, even if there is a full exit from the EU, it will be largely impossible for an employment tribunal to depart from existing case law.   This will only change gradually over time, if and when the higher courts (EAT, Court of Appeal or Supreme Court) reconsider and change the established position on any particular aspect of employment law as a result of no longer being required to apply ECJ judgments. Further,   as referred to above, rather than the UK making a wholesale move away from its existing employment law regime post-Brexit, it is more likely to tinker with existing laws which will, therefore, mean that many aspects of our regulation would remain based on EU directives.   In these circumstances, the UK courts are likely to continue to view judgments of the ECJ as being persuasive in authority, albeit not binding.

If the ultimate outcome is that the UK becomes a member of the EEA, we would continue to be bound by both the Acquired Rights Directive and the Agency Workers Directive.   As such, the scope for changing the UK’s rules in these areas would be extremely limited although the Government may make moves to change those aspects of the UK implementing regulations which, arguably, “gold plate” the strict requirements of the relevant EU directives.Assuming a full EU exit, no EEA membership and no trade agreements,   technically the UK Government would be free to amend or repeal the TUPE and Agency Workers regimes in their entirety.   In reality, however, this is an unlikely outcome.   A large number of existing commercial agreements, particularly outsourcing arrangements, are based on the understanding that TUPE will apply to transfer staff in the event of a business change.   Removing this regime or changing it significantly would risk causing chaos and creating uncertainty for the business community and, as such, would not be a welcome measure.   Although the Agency Workers legislation is arguably less popular with employers,   entirely removing the protections for this category of workers, which have started to become embedded in the UK’s employment law landscape, would be politically difficult and would be likely to face strong resistance from the Trades Unions.   Watering down, rather than removing, agency worker rights is therefore a more likely outcome.

The UK’s legal system has become tightly enmeshed with that of the EU, and the unravelling process in the event of Brexit is likely to be long, complex and expensive. If the UK does vote to leave on 23 June, it is likely to be a long time before the full implications of Brexit become clear.

 

 

Permanent link to this article: http://www.dlapiperbeaware.co.uk/brexit-what-are-the-implications-for-employment-law/

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