David Roath | 27th June 2016

Brexit – So what next for employers?


David Roath | 27th June 2016

Brexit – So what next for employers?

Since the outcome of the Brexit referendum, I have been through a variety of emotions ranging from shock to anger to despair. I have decided that enough is enough and after 3 days of this, it’s time to set these emotions aside and get on with dealing with whatever is coming our way.

As employment lawyers, we face a lot of uncertainty. After all, a tremendous amount of the law that has kept us busy for many years has come from European Directives. Many of the highest profile cases of recent years have been fought out in the European Court of Justice. One prime example is the issue of overtime and holiday pay. Employers are just about getting to grips with this issue and many have changed their holiday pay arrangements to include overtime and/or commission. Many employers will now be asking if this will change and whether they should look at this again. Is it back to basic pay only for holiday pay? What about the employers who have been waiting to see what happens? Do they keep waiting, even though the legal position in the UK is settled?

What about Staff Handbooks? These are full of law which has come out of Europe. How many of these are going to need a re-write as and when the law changes?

There is no doubt in my mind that employment law is likely to come under close scrutiny over the next few years and the areas of European law which were unpopular might be reviewed, revised and/or discarded altogether. This is all for the future and it may take years to start unravelling some of the European law. There is little point worrying too much about this.  But, what of the immediate future?   What are the immediate challenges facing employers and employees?

We have already had calls from employers who intend to:

  • Withdraw offers of employment already made;
  • Not pay discretionary bonuses that were in the budget to be paid to employees;
  • Review planned pay increases;
  • Freeze employment.

My personal fear is that a huge brake might just have been applied to the employment market. During the recent recession, many employers cut their workforces sharply and we had some of our busiest years dealing with redundancies and restructures on a weekly basis.  Over the last few years, redundancy advice has largely tailed off and this was solely due to the strengthening economy. A number of our employer clients have been struggling to recruit and the labour market had shifted into a buyer’s market.

My advice to employers in the short-term is to not panic but let things settle over the next few months. If employers hit the panic button then their employees are going to react to this. What is required is a cool head and strong leadership. Employees who might be fearful about their jobs will be comforted if they see calm and strong leadership.

We are addressing the immediate Brexit issues in a series of seminars to take place on 6 and 7 July 2016. Our first seminar filled up within hours and an extra seminars have been scheduled for the morning of 6 and 7 July. If necessary, we will add an extra date. Further details can be found here.

If you have any immediate questions or concerns, the Employment Team at Paris Smith is on hand to assist you through these uncertain times. Otherwise, it would be great to see you at one of our Brexit seminars next week.