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Brexit – What Does It Mean For Employers In The Hospitality Sector?

BrexitBy Laura Farnsworth, Lewis Silkin

The referendum vote on 23 June in favour of the UK leaving the EU has created a great deal of uncertainty for UK and international hospitality businesses. While anactual ‘Brexit’ is unlikely to be finalised before 2018, there could be major implications for the industry, in both the long-term and short-term.

What do you need to know?

A significant proportion of the UK’s employment law comes from the EU, including discrimination rights, collective consultation obligations, transfer of undertakings regulations, family leave, working time regulations and duties to agency workers. In theory, once UK has withdrawn its membership, the government could repeal all of this legislation. This is, however, unlikely and EU law will most probably continue to exert an important influence on workplace rights in the UK post-Brexit.

There are various reasons for this:

  • Some EU laws merely confirmed protections that were already provided by UK employment law. It is very unlikely that the government would decide to cut back on such long-established legal entitlements.
  • In any event, many EU-derived statutory protections are generally regarded by both employers and employee as a good thing – for example, equality rights, family leave and entitlement to paid annual leave.
  • An even more compelling reason for the UK to continue to observe EU law is the commercial imperative for it to remain in a relationship with the EU, its biggest trading partner. The price of a trade agreement with the EU is likely to be adherence to a significant proportion of EU employment and social protection.

Disentangling the UK from its EU commitments will be a lengthy and complex process. The UK is required to give two years’ notice of its intention to leave the EU. During this period, the parties will negotiate the terms of the departure and it is likely that new trade arrangements will be put in place. Depending on the terms that are agreed, the government might then be in a position to start rolling back EU-derived employment laws – or, as is perhaps more likely, modify certain provisions to make them more palatable to UK businesses.

Legal issues arising from Brexit

While it is unlikely that UK employment law will be transformed in significant ways, at least in the short term, there are certain pressing employment issues arising now that businesses in the hospitality sector may need to navigate.

Discrimination against non-British EU nationals

There have been an increasing number of reported incidents of abuse against non-British individuals and businesses since the vote. Employers need to be alert to this potential risk, in particular as regards their customer-facing staff. They should consider providing appropriate training both to remind staff about their obligations towards others and to protect themselves if they face any offensive or abusive comments. In addition, managers should be reminded of the organisation’s statutory responsibilities regarding discrimination, harassment and health and safety.

Immigration

In the event that an ultimate Brexit withdrawal agreement results in the termination of freedom of movement between the UK and the EEA, visas will be required for EEA nationals to work in the UK, (although a transitional regime might apply). No decisions have been made as yet, however, and for the time being the existing rules continue in force.

We recommend that employers check their Prevention of Illegal Working processes and documentation are up-to-date, so as to ensure a good relationship with the Home Office in the coming months and years. Businesses should also consider checking that the provisions in employment contracts dealing with workers’ right to work in the UK are sufficiently robust in the event that their immigration status changes in future.

Seasonal workers and casual workers

A high proportion of EU nationals in the workforces of hospitality businesses in the UK may be engaged under casual or seasonal contracts. Businesses should consider reviewing such contracts now to check they are appropriate for their needs. This is particularly important if there are concerns about workers leaving the UK without warning, leaving the business without sufficient cover.

The period of uncertainty the UK is now entering is likely to prove worrying and difficult for employees as well as the businesses that employ them. We recommend that employers keep up-to-date during the negotiations over the UK’s withdrawal from the EU so they are in a position to respond to queries and plan effectively.

Laura Farnsworth is a partner in the employment team at the law firm Lewis Silkin LLP

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