HR and the UK EU Referendum
The UK EU Referendum on 23rd June 2016 returned a result in favour of leaving the European Union.
- 1 The Effects of Brexit on Human Resources
- 1.1 Visas
- 1.2 Data Protection
- 1.3 Currency
- 1.4 Employment Legislation
- 1.5 EU Subsidies
- 1.6 Scotland
- 1.7 Government Contracts
- 1.8 Conclusion
- 2 Further Reading
The Effects of Brexit on Human Resources
Update: The UK Referendum on 23rd June 2016 returned a result in favour of leaving the European Union. The effects, even now, are not entirely clear. The treaties in place mean that:
1: The EU treaty states that a member state goes through its own constitutional process to determine it wants to leave. The EU Referendum was the first part of this, the second is likely to be an Act of Parliament. This might take some time as most MPs were not in favour of leaving.
2: The second requirement is then for the official notification of leaving. The date of this will be important as it starts a countdown clock of 2 years to the negotiation of the terms of leaving.
3: This period of negotiation can be prolonged if EU and UK government agree. This could give a temporary continuance, but it is unlikely that this situation could be stabilised for any length of time.
I think the most likely scenario is that the official notice is given in April 2017, after draft trade agreements have been signed in principle with 20 or so non-EU countries.
Theresa May is now the new Prime Minister and has given David Davies the job of organising and negotiating Brexit.
Under this scenario, the date for the final exit of the UK from the EU would be April 2019.
With this in mind, let's revisit the areas of impact:
Movement of people has been a contentious part of the debate. In the short term (2 years in our scenario), little will change. Unfortunately for individuals and families involved, the medium term future is much less certain.
Visas for EU Nationals in the UK
It is likely that the UK Government would want to keep the status quo even in 2019, and so it is likely that EU workers already in the UK will be allowed to remain. However, workers arriving after the referendum date (or some nominal date) may begin to require visas in 2019.
Visas for UK Citizens Working within the EU
However, the same would not necessarily be true of EU member states who may apply non-EU visa rules as soon as they can - which would probably be 2017.
Effects on Non-EU Citizens Working in UK
The UK government will want to provide stability and so the most probable scenario, at least in the short term, is maintaining the current arrangements.
Effects on UK Citizens Working in Non-EU Countries
Where a country has specific agreements with the EU rather than the UK, the visa arrangements may change depending upon the relationship of the UK with that country. It is likely that status quo will apply with most countries.
Longer Term Effects
Immigration is one of the main factors in the referendum. This implies that a government post-Brexit would have pressures to curb immigration. A points system, such as the Australian one, could provide a more sound and stable footing for immigration policy. However, such a system would take time to set up, and there would be many other trade topics requiring attention.
There are a few Acts of Parliament that cover data protection. Some parts of these acts have been European and internationally inspired. In the interests of stability, changes to these acts would be widely discussed and consulted prior to being changed. However, the status of the UK will be changing and so building mitigations may well need to be considered.
It is a good idea to do some leg work prior to the vote to ensure you are ready to act.
Actions of the U.K. Government
The UK government need to act on negotiating the UK as a safe haven for both EU and US data based on our stringent data laws (rather than self management as under safe harbour which was ruled against in 2015).
Where is Your Data Stored?
I have to state up front that I am not a lawyer and for the issues covered here, you may need to seek legal advice. In general, the data covered by these Acts is personally identifiable information - people data. There are three regions your data could be stored in:
- Within the UK
- Within the EU
- Outside the EU
The UK will change from being inside the EU, to being outside the EU. This could have effects on agreements written to cover EU countries and may require new agreements and processes for data held within the UK.
Where is Your Data Processed?
The UK Data Protection Act covers both where data is held and who processes the data, so the places where the data are being accessed also needs to be considered.
Who do You Hold Data About?
Which nationalities and territories data are being held? This may imply that further measures are required if data held or processed in the UK.
Particularly in the time prior to the referendum, the currency markets will be fluctuating wildly. Great for speculators, not so great if you are managing the costs of a multi-currency payroll and multi-currency contracts.
Effects of Uncertainty
The currency markets are jittery at the moment. The level of the pound is currently bouncing around, largely due to speculators and the large banks running their trading floors on a 24/7 shift basis. My belief is that this will settle down to a point marginally below the position just before the referendum.
One of the cited #Brexit advantages would be that the UK can start to undo unwanted EU imposed legislation. However, unpicking the good from the bad would take time and would not give any short term results.
If your company currently gains EU subsidies or benefits from European schemes then you may need to start planning what to do without the subsidy.
For instance, if you have French VIE interns, it may be worth considering alternatives for new hires and plan what to do with your current intake.
The SNP have announced their desire to hold a re-run of the Scottish Independence referendum, so that Scotland would be free to rejoin the EU. If this is held unilaterally, there would be no obligation on the UK government to recognise its validity.
EU governments are currently obliged to consider all EU based tenders for contracts. If the UK leaves, these contracts are in jeopardy as the EU government would no longer be obliged to choose a UK supplier in preference to their own supplier. Replacing leavers with temporary staff would be prudent at this time.
On the flip side, after 2017, the UK government would no longer need to consider EU contractors above homegrown talent any more.
The EU's disastrous trade deal with the US will no longer apply. This will reduce the bureaucratic and financial burden on local authorities in particular.
The short term impacts of #Brexit need to be mitigated by business and government working together. We can then concentrate on taking advantage of the huge opportunities that an independent Britain will have.
Background information about the EU:
How to find useful information within the PeopleSoft system: