All quiet on the Brexit front – a November employment law update
3 November 2020
The end of the Brexit transition period on 31 December 2020 is now only 9 weeks away.
Coronavirus has stolen the headlines, with recent figures showing that British employers planned 500,000 redundancies in the first five months of the coronavirus crisis. It is therefore hardly surprising that despite the UK's imminent uncoupling from the EU, Brexit employment related developments have attracted relatively little attention despite the potential consequences for employers and employees. Grappling with the new and complex immigration rules may well be giving rise to sleepless nights not just for employees who may be affected by these rules, but also employers who could find they are on the receiving end of a prosecution simply because they have not been able to keep up to date with this ever changing situation. It is important employers ensure they are not taken by surprise and have time to take the necessary steps to ensure compliance with the new legislation and other employment related issues arising out of the uncoupling. Therefore over the coming months in addition to our regular updates we will be updating and providing guidance on the impact of Brexit on employment but also immigration - see our immigration expert's article on this here.
So far there have been two recent developments which we outline in this article. The first relates to professional qualifications and services and the other the Modern Slavery Act 2015 (MSA 2015). These developments have attracted relatively little attention but are important not just because in the case of professional qualifications the time it may take to ensure compliance, but the fact it could impact on an employee's ability to legally provide services to their employer or its clients. In the case of MSA 2015, as will be seen from what we say later, the effect of Brexit and the new immigration rules could have a detrimental effect on the UK's ability to stamp out the exploitation of foreign workers. It is also worth bearing in mind that if changes proposed by the Government are not addressed, they could not only affect the reputation of the organisation but could give rise to legal proceedings. British American Tobacco may be facing a modern slavery legal challenge brought on behalf of 350 child labourers who work on tobacco crops in Malawi. The potential implications of this case on supply chain monitoring and compliance with the Act are significant.
Mutual Recognition of Professional Qualifications
The Professional Qualifications and Services (Amendments and Miscellaneous Provisions) (EU Exit) Regulations 2020 came into force on 24 September 2020. These regulations bring to an end the provisions of the Recognition of Professional Qualifications Directive which formerly allowed professionals from one EEA state (or Switzerland) to have their professional qualifications recognised in other EEA states (or Switzerland).
For example management accountants are regulated by the Chartered Institute of Management Accountants (CIMA). From 1 January 2020, those who come to the UK with a management accountancy qualification from an EU member state will have to apply to CIMA for recognition of that qualification if they wish to practice in the UK.
There are also specific rules for certain other professions such as healthcare workers or those who are involved in financial and professional services. These rules should be checked to ascertain whether and how they apply. Architects, for example, will be subject to rules after 1 January 2021 which are similar to the current system of automatic recognition (i.e. on the basis that the qualifications meet the minimum training conditions), provided that the applicant has access to the profession in their home state. They will therefore not be affected by the withdrawal of mutual recognition. However, if their qualification is not currently recognised, they will have to apply to the Architects Registration Board.
While these new regulations do not themselves represent a substantive departure from existing policy, and simply amend other pieces of legislation to bring them in line with the withdrawal agreements made between the UK with the EU and EFTA states, businesses who employ professionals from EEA countries who require a professional qualification in order to work or provide services should check to see whether any steps need to be taken to ensure those professionals can continue to work without being in breach of the law or regulatory practice after the transition period. The consequences of any breach of the law or regulatory rule may not only have legal consequences, but could give rise to censure of the individual by the relevant regulator as well as the loss of any indemnity insurance that is in place.
Generally speaking, those professional whose qualifications have been formally recognised before 31 December 2020 need not take any action. Those whose qualifications have not been formally recognised before the end of the transition period will have to apply to the relevant regulator for recognition under the new system. It is therefore important that employers liaise with their professional employees who gained the necessary qualifications in an EEA country to establish whether recognition needs to be sought from the relevant UK regulator. Given the administration delays Covid-19 has created for many organisations steps should be taken now to do whatever is necessary to ensure recognition of the relevant qualification. Even where recognition has already been granted, the employer should adopt a cautious approach and check the date formal recognition was given.
Under the new system, UK regulators will:
- have to recognise EEA and Swiss qualifications which are equivalent to the UK qualifications;
- no longer have obligations to offer compensation measures or partial access where the qualifications are not equivalent; and
- not have to make provisions for the temporary and occasional provision of services.
Modern Slavery Statements
Businesses with an annual turnover of £36 million have to produce a yearly statement to confirm what steps they have taken to ensure that neither they, nor anyone in their supply chain, are involved in slavery.
On 22 September 2020, the Government announced their intention to make a number of changes to these statements. Under the proposed changes, the information which the statements were previously advised to address will now become mandatory, and if an organisation has taken no steps in one of these areas, they must state so clearly and should provide a reason. There is no date set for when these changes will be implemented, with the government stating that they will introduce the changes to the Modern Slavery Act 2015 "when parliamentary time allows". While this suggests there is time to do whatever is necessary, bearing in mind the delays, travel and other restrictions brought about by Covid-19, organisations should not delay in taking the necessary action to ensure compliance. This is particularly important given that the Government also plans to launch a reporting service for organisations to publish their modern slavery statements on, which is intended to allow consumers to choose between different companies based on their approach to modern slavery.
The requirement for increased transparency is, of course, welcome in combatting modern slavery. However, this approach may be treating the symptom whilst neglecting the underlying cause. According to Anti-Slavery, an international human rights organisation, the UK's membership of the EU has played a 'considerable role' in its efforts to tackle modern slavery. The greater difficulty for lower skilled migrants to enter the country under the new points based system has raised concerns that there may be an increase in the number of migrant workers entering the country illegally after the transition period who may be more vulnerable to exploitation by criminal groups. There are also concerns that the lack of an information sharing agreement with the EU will reduce the UK's access to EU intelligence on modern slavery, such as the European Criminal Records Information Service.
If you or your organisation require employment advice, Brexit-related or otherwise, please contact the Employment Team or your usual Wilsons contact.