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Brexit – where do Employers stand in the “Remain or Leave” saga?

We have a new Prime Minister paving the way for a Halloween Brexit, deal or no-deal.

So, what are the potential implications for employers should the UK indeed leave the EU? Under EU Single Market Rules, freedom of movement is one of the guiding principles. If the UK does leave the EU, businesses will have to continue irrespective of whether or not there is a “deal”. Indeed, a number of businesses have already been gearing up for changes and setting up structures to minimise any damage arising from Brexit. Other businesses are planning to take advantage of the opportunities that will flow from the UK leaving the EU.

In general terms, whilst the US has flexible employment laws (weighted in favour of the employer) the EU is the opposite with the employees enjoying much wider protection. The UK seems to have a better balance sitting in the middle of the US and EU jurisdictions.

Post Brexit, businesses wanting to continue to trade within the EU will want to consider whether or not they can request (or require) employees to move their normal place of work elsewhere in the EU countries. We hear of bankers being moved to Paris /Frankfurt. But can employers lawfully do this and what rights do the employees have in objecting? The answer lies in how well the mobility clause in the contract of employment is drafted. Subject to reasonableness test, employers may well be able to insist on employees moving their base from London to the EU. However, if there is no mobility clause, an employee should be able to resist any request from an employer to move their normal place of work. An employer will have to incentivise the employee to move or possibly pay redundancy.

Employers should also give careful consideration to the jurisdiction clause in a contract of employment. For example, contracts of employment governed by German or French (rather than English) Law are generally more favourable for the employees.

So, do you run the risk of shooting yourself in the foot? It may well be that ‘Remain’ is better than ‘Leave’!

Do not hesitate to contact Raj Dhokia to discuss: at r.dhokia@fgdlaw.co.uk  or on 020 7625 6003.