Will a post-Brexit recession keep employment lawyers busy?

By Charlie Britten
15 Aug 2019

Will a post-Brexit recession keep employment lawyers busy?

With Boris Johnson now in Downing Street and promising the UK will leave the EU on October 31st with or without a deal, the die appears to be cast: The government wants to renegotiate the withdrawal agreement and remove the Irish backstop, but the EU appears unwilling to budge and the clock is ticking.

That alone has led to many warnings from economists and captains of industry that the UK will suffer a major shock, as international trade suddenly becomes costlier due to the tariffs that would arise if trade with the EU defaults to World Trade Organisation terms.

Other potential problems arise to do with the bureaucracy involved in moving goods across borders and the impact this will have on ‘just-in-time’ manufacturing.

Job losses ahead?

At present, the economy is still sustaining very high unemployment, with the latest official figures showing 76.1 per cent of people of working age are in jobs, the joint-highest figure since records began in 1971. But the Office for National Statistics has also revealed that the economy contracted by 0.2 per cent in the second quarter. Anything like that again over the July to September period will officially place Britain in recession.

This may create a situation to keep the employment lawyers very busy. If companies decide to lay off significant numbers of staff, hard decisions will be required about redundancies.

Not every company will go about this in the right way. By law, there should be a consultation, right of appeal and a fair process. In reality, however, some will fail to comply with the law and many decisions will end up being open to legal challenge.

All this will be nothing new to employment lawyers. But things may soon start to change.

How and when laws may change

A more pressing question may concern foreign nationals whose right-to-work status might be under question after Brexit, especially those from the EU. Indeed, these questions may loom larger as the government seeks to draw up its own immigration policy in due course.

However, it is worth noting that most UK employment law will not be directly affected by Brexit, at least not immediately. Partly that is because the government’s EU repeal bill - essentially a huge ‘cut and paste’ exercise - means all laws the UK has taken on as an obligation of EU membership will remain on the statute books unless and until they are repealed and replaced by something else.

Secondly, a great many UK employment laws have nothing to do with EU legislation. Many were established before 1972 (holiday with pay, for instance, dates to the 1930s), while other legislation passed during Britain’s EU membership has been a matter for UK law. For example, while the EU requires minimum levels of parental leave after the birth of a child, the UK’s statutory provision exceeds this.

Therefore, Brexit will not immediately throw up new employment law issues, except in cases where employers mistakenly think they can treat EU staff differently to before.

Indeed, the government set out in January how EU citizens living and working here at the time of a no-deal Brexit will retain their rights. In addition, Irish citizens will still have all the rights they enjoy as part of the common travel area, based on legislation that predated both countries joining the EEC in 1972.

Post-Brexit legislation

Therefore, the key question for employment lawyers may concern what arises from the development of new immigration laws going forwards. Prime minister Boris Johnson has advocated an Australian-style points system, but the details of how this will work in the UK’s case will need to be fleshed out. If there is a lasting recession and a decline in the jobs market, however, that may tempt the government to impose a more restrictive regime.

At the same time, the fact that the UK is not constrained by EU regulations may facilitate some changes to employment law. But these will be driven by domestic concerns.

Some have claimed that it will be the aim of a post-Brexit government to remove numerous worker rights currently enshrined in EU law, but even if anyone in Westminster does harbour such ambitions in a bid to create more labour market flexibility, public opposition and the fear of electoral consequences may limit how far they can go.

How we can help

SME law firms practising in the employment law field will find they can market themselves successfully at a time of growing demand for their services if they have a focused content marketing strategy combined with social media and email. If certain groups of people find they are more affected than others by employment law changes, this will shape the nature of the target markets such firms will seek to serve.

At BeUniqueness we can help your firm draw up just such a plan, enabling you to highlight how you can deal with your clients’ needs in a fast-changing world.