The United Kingdom is no longer a member of the European Union and has entered into a transition period until December 31 2020, unless an extension of 1 or 2 years is agreed by July 1 2020 (the Brexit Long Stop Date).
During this transition period, the UK will continue to trade with the EU in much the same way as it did before its exit. Negotiations will take place throughout this year to determine the future permanent relationship between the UK and the EU.
The UK’s Prime Minister, Boris Johnson, has repeatedly stated that the transition period will not be extended beyond the end of this year. This is an ambitious deadline to reach a comprehensive agreement with the EU and the possibility of a “no deal” Brexit remains an event for which companies should prepare.
Against this backdrop, this update summarises the current status of the UK’s relationship with the EU and sets out some of the key legal implications associated with a “no deal” scenario for certain areas—one of which being employment, which we examine here.
Most major jurisdictions have pay equity laws, but their approach is far from uniform. Global companies need to evaluate compliance with these laws on a country-by-country basis whilst simultaneously addressing their compensation policies globally.
A sample of the rules across several countries helps to identify trends that can drive effective global policies.
Australia
The Australian Workplace Gender Equality Act of 2012 mandates equal pay for equivalent or comparable work. There are annual reporting requirements for employers with 100 or more employees. Those reports must include the following indicators: gender composition of the workforce, gender composition of governing bodies, and equal compensation between men and women.
Employers are penalised by being publicly named if they fail to lodge a public report on time, or inform employees or other stakeholders that a public report was lodged, or give the requested compliance data under the Act.
The compensation limits on Employment Tribunal awards and certain other amounts payable under UK employment legislation will increase as of 6 April 2018.
This alert sets out the changes in full and highlights important consequences for employers.
With the United Kingdom having voted to leave the European Union (Brexit) on 23 June 2016, the free flow of personal data between the United Kingdom and EU and European Economic Area (EEA) countries is at risk. Should the United Kingdom also leave the EEA and thus become a “third country” for the purposes of data transfers, EU/EEA businesses that are currently retaining UK service providers or data centres to handle or store personal data, or are planning to do so, would have to carefully re-evaluate this decision.
From April 6, 2012, the length of continuous service needed by an employee in the UK to qualify:
To bring a standard unfair dismissal claim; and
To request a written statement setting out the reasons for his/her dismissal will increase from one year to two years.
Will this affect existing employees?
The new two year qualifying period will apply to an employee who commences work on or after April 6, 2012.
Employees who are already in employment on April 5, 2012, will not be affected by this change. They will still be able to bring a claim of standard unfair dismissal if they have at least one year’s continuous service.
Employees who transfer to a new employer under TUPE after April 6, 2012, but who were employed by the transferor prior to April 6, 2012, will also be covered by the one year service threshold for standard unfair dismissal.
What about employees who are currently being recruited?
An employee’s period of continuous employment “begins with the day on which the employee starts work.” This means that the increased qualifying period will only apply to employees who start work on or after April 6, 2012.
The date on which an employee commences a recruitment process, or is offered a job, is not relevant when it comes to calculating continuous employment.
What does this mean for employers?
If commercially possible, employers in the UK may wish to push new joiner start dates back to April 6, 2012 or beyond.
Ensure that your internal recruitment team, who may be making offers to candidates to start with you in early April 2012, know about the change.
Going forward, the date on which an employee started work will be as important as the date on which their employment ended for the purposes of determining if they are eligible to bring a standard unfair dismissal claim.
To make the position as certain as possible, ideally both the start date in the employment contract, and the date on which an employee commences work, should fall on or after April 6, 2012.
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