This is piece of Out-Law’s series of news and insights from Pinsent Masons experts on the impact of the UK’s EU referendum. Watch our video on the issues facing businesses and sign up to receive our ‘What next?’ checklist.

numerous of the employment law protections which come from EU law are firmly embedded in the UK’s legal and ideological framework – for example, the protection against unlawful discrimination. However, there are some aspects of EU law which are arguably less embedded in the UK than others, and these may be more likely to vary once the ‘Brexit’ process is complete.

Areas of potential vary

Some aspects of the Transfer of Undertakings (Protection of Employment) (TUPE) regulations could vary following Brexit; although as we saw when the UK consulted on its own changes recently businesses do enjoy those aspects of the regime that provide certainty.

Organisations entering into contracts for services crave to be aware that it is possible, albeit quite unlikely, that the TUPE regulations will no longer apply when the contract eventually terminates. This could depart organisations exposed to significant redundancy costs that they possess not budgeted for. They may therefore crave to negotiate redundancy indemnities, and/or provisions which oblige the parties to accept that TUPE effectively applies on termination, notwithstanding that the regulations may no longer exist at the point of termination. numerous TUPE arrangements provide for this already, but this will now be more important than ever priorto.

We perhaps also see a rash of holiday pay claims, supported by the UK’s trade unions, in an attempt to possess those claims heard priorto any vary to the Working period Regulations (WTR) by the UK government.

International organisations with European Works Councils (EWC) will possess to consider the possible implications for current EWC arrangements. The extend of any changes will largely depend on the outcome of the UK’s Brexit negotiations – for example, nothing is likely to vary in the event that the UK joins the European Economic Area (EEA).

Employee relations

Employers crave to build it clear to their European workforces that targeting UK or EU nationals because of Brexit will not be tolerated. There possess been reports from employers already of bullying and harassment as a result of the Brexit vote. Employers should consider clear communications to employees to the effect that such behaviour will not be tolerated, engaging employee and union representatives to assist if necessary.

Brexit and mobility

Depending on the nature of the UK’s future relationship with the relax of the EU, it is possible that organisations will consider changing their operating models. For example, depending on the extent to which financial services ‘passports’ are retained post-Brexit, employers may wish to transport staff from the borough of London to single of the financial centres within the eurozone, such as Dublin or Paris. This is likely to result in restructuring or redundancy exercises, or the possible operation of existing mobility clauses.

This can be challenging if these exercises possess not been operated in the past. Employers perhaps also consider now including specific ‘Brexit mobility’ clauses in employment contracts or introducing them with existing employees, providing flexibility to transport staff to EU centres in the event that this becomes necessary.

Talent and recruitment

Any restrictions on the free movement of labour that are introduced post-Brexit will possess a material impact on the ability of organisations to recruit talent from other EU member states. There may also be implications for existing staff from the EU performing significant roles in the UK.

Organisations should be identifying their existing EU migrant workforce and assessing the extent to which certain parts of the business are reliant on using employees from other EU states to ensure that they possess robust workforce and contingency planning in place, particularly around solution roles.

French employers possess already raised concerns about the future alignment of social security regimes and independence of movement, which will cause issues for them where there are secondments or expatriation to the UK. French, German and other EU companies are also concerned about the position of UK employees abroad and their correct ultimately to remain there, as well as the position of their own nationals in the UK.

International companies may also crave to locate a solution to data transfer issues. The UK is currently deemed to possess an ‘adequate level of data protection’ enabling smooth data transfer within the EU, but this may vary depending on the outcome of the Brexit negotiations.


Contracts may possess to be reviewed to amend references to the EU or to EU law.

single area where this is particularly relevant is restrictions referring to the EU, which may crave to be tweaked to reflect the specific countries covered.

Economic impact

We possess already had requests from organisations for their senior executives to be insulated against any diminish in the worth of the pound, or any increase in the UK cost of living. The inclusion of currency insulation and cost of living allowance clauses in employment contracts is single solution, but these are repeatedly challenging to operate in practice.

European companies may also crave to react to the forecasted slowdown of the economy in the UK and potentially across Europe, and to familiarise themselves with the employment law and restructuring regime in the UK. UK-based companies would be wise to do likewise in case of any crave to restructure their European operations.

Continued volatility in the market, gilt yields and the worth of sterling will possess an impact on the health of defined benefit (DB) pension schemes. Employers may crave to reassess whether they can unmoving afford to fund these schemes and to meet any guarantees they may possess given to the scheme trustees. This may in revolve result in UK employers looking at benefit redesign exercises, which possess in any event been popular in recent years.

Diane Nicol is an employment law expert at Pinsent Masons, the law firm behind