UK Government Seeks to Reassure Workers, Businesses Over No-Deal Brexit

UK Government Seeks to Reassure Workers, Businesses Over No-Deal Brexit

The March 2019 deadline for negotiating terms for the UK’s departure from the European Union is fast approaching, while major points of contention between London and Brussels still remain to be ironed out. While the likelihood of a “no-deal” Brexit, in which the UK would crash out of the EU with no special trade arrangements, is generally considered low, the final outcome remains uncertain with just six months to go, so British companies like London-based financial firms have been taking steps to prepare for that contingency. At the same time, European manufacturers operating in the UK have made clear that they might have to pull out of the country if the deadline passes without a deal, as the removal of the UK from the European customs union would be hugely disruptive to their supply chains.

At the same time, Europeans already living legally in the UK have been assured that they will be allowed to remain under any deal, but it is less clear what will happen to them if there is no deal. Trade unions and other labor groups have also expressed concern that Brexit could mean a reduction in the rights employees enjoy under labor laws grounded in EU policies. The bill drafted last year for removing the UK from the legal, political, and financial institutions of the EU preserves regulations derived from European labor laws, but employee advocates still fear that a weakening of these rights is in the pipeline; the possibility of a no-deal outcome compounds those suspicions.

In the past week, the government has issued several statements meant to reassure employees and employers that a no-deal Brexit remains unlikely and will have no such dire consequences if it does occur. A guidance document issued last week as part of a series of advice papers concerning a potential no-deal Brexit addressed the issue of workers’ rights, saying there would be no change to these protections in any event, Personnel Today reported:

[T]he government said domestic legislation already exceeds the level of employment protection provided under EU law. It intends to make small amendments to the language of workplace legislation to reflect that the UK will no longer be a member of the EU. No policy changes will be made.

Secretary for exiting the European Union Dominic Raab said: “The technical notice on workplace rights explains the steps we are taking to transfer all EU legislation into UK law in time for exit, so workers will continue to be entitled to the rights they have now, such as flexible working or parental leave. In many areas we already go much further than the EU.”

Crowley Woodford, partner law firm Ashurst, said: “There is no surprise that worker’s rights will be maintained in a no deal Brexit given Theresa May’s previous assurances. “The real risk for workers lies in the longer-term as Parliament would be able to scrap established rights with relative ease without the intervention of the European courts.”

Whitehall is also trying to allay concerns about the rights of UK resident nationals of EU countries in a no-deal scenario, which has been a major source of anxiety for British businesses in industries that depend heavily on foreign labor. On Wednesday, Raab told the House of Lords’ select committee on the EU that the government intended to ensure that EU citizens were able to remain in the country, People Management reported:

“This isn’t just a rational statement on our reliance on the contribution that they make but very much what we feel in our hearts about them,” he added. “And I’m happy to continue saying that because it’s how I feel…about the role and the contribution the EU makes and it’s certainly this government’s position.”

The first batch of no-deal Brexit guidance papers issued last week, however, did not directly address how the rights of EU citizens will be handled, People Management also notes. Observers had expected this issue to be among the first covered, and found its absence disconcerting:

“With skills and labour shortages set to worsen further, the need for the government to issue consistent, categorical assurances about the status of current and future EU citizens, whatever the outcome of the negotiations, is more important now than ever,” said Gerwyn Davies, CIPD labour market advisor.

Meanwhile, a new report from the Migration Observatory at the University of Oxford expressed concern that low-skill workers in industries like agriculture may be vulnerable to exploitation under the guest-worker schemes the government envisions using the ensure access to this type of labor after Brexit:

Exploitation is a concern across the low-wage workforce and not just for migrant workers, although migrants are generally assumed to be at higher risk due to factors such as language barriers, lower local knowledge and immigration status. Addressing the risk of exploitation in any future low-skilled work route is likely to be extremely difficult. On one hand, there is some evidence that the ‘employer tie’ in work permit schemes can lead to lower wages for some workers and may increase the risk of exploitation for the more vulnerable. On the other hand, the fact that work-permit programmes are heavily regulated could in theory improve life for some participants, by setting minimum requirements for pay or employer-provided accommodation. But this, of course, depends on effective enforcement of labour standards—something to which the UK has traditionally dedicated relatively limited resources.