Legal implications for businesses after the transition period

Covid-19 and its implications have dominated 2020, Brexit has until now taken a bit of a back seat. Still, come the end of the year, when the transition period ends, there are some implications for all businesses.

Impact of Brexit on employment law

A significant proportion of the UK’s employment law comes from the EU, including discrimination rights, family leave and working time regulations, to name a few.

Most EU-derived employment legislation will remain applicable in the UK immediately after the end of the transition period unless and until altered by the appropriate UK legislative body. As we understand it, the government is committed to ensuring that the UK workers’ rights remain aligned with EU employment protection. The reason for this being that not to do so would, in many cases, be controversial. So, for the time being, there are no anticipated changes to employment law.

Data protection and GDPR in a post-Brexit world

After the Brexit transition period ends on 31 December 2020, the EU GDPR will no longer be law in the UK. However, the UK government intends to write the GDPR into UK law so, from all practical perspectives, GDPR will continue to apply.

The government has said that transfers of data from the UK to the EU/ EEA will not be restricted. However, from the end of the transition period, the UK will be a “third country” in the eyes of GDPR. The transfer of personal data from the EU/EEA to the UK will only be allowed if ‘appropriate safeguards’ are in place. The action required will vary according to whether there is a deal or no deal. If there is a deal, then it is likely that the EU will make an adequacy decision which will allow for the free flow of personal data from the EU/EEA to the UK.

However, if there is a no-deal, then GDPR transfer rules will apply to any data coming from the EU/EEA into the UK and organisations will need to consider what GDPR safeguards should be put in place to ensure that data can continue to flow into the UK.

Our Advice: understand your international flows of personal data, so you are best placed to take any action in January 2021 if necessary. The key transfers to identify will be from the EU/EEA to the UK.

Impact of Brexit on your workforce: Freedom of movement

From January 2021, there will be a new immigration system. From this date, there will be no free movement into the UK for EU/EEA/Swiss nationals.

EU/EEA/Swiss nationals who have lived in the UK lawfully for a period of time on or before 31 December 2020 (the end of the transition period) can apply for “settled status” to stay indefinitely under the EU Settlement Scheme if they have lived here for 5 or more years or “pre-settled status” if they have lived here for less than 5 years. This will allow them to continue to work in the UK. The deadline for submitting applications for settled or pre-settled status is 30 June 2021. Organisations should inform and support employees with registration.

Irish citizens will continue to enjoy free movement into the UK. They do not need to apply for settled or pre-settled status.

Any business that wants to employ (or continue to employ) an individual who is not British and has neither settled nor pre-settled status or indefinite leave to remain, must have a Sponsor Licence in place.

UK based British Citizens who work in multiple EU Member States will need to plan their travels carefully; as freedom of movement will cease to apply, they may need to obtain multiple work permits, visa and/or residence permits to work at EU sites/ offices.

Our Advice: carry out an audit of your workforce to understand what their right to work requirements are, and make sure both you and your workforce are aware of your obligations.

Brexit and contracts

Some of the terms in existing contracts may no longer be relevant post-Brexit or may raise legal or practical questions in the future.

If your contracts, for example, terms of business, sale of goods or employment contracts make reference to the UK being a member state of the EU or rely on EU regulation, they will need revising.

Our Advice: start reviewing what contracts you have in place.

This article was written by Claire Berry, an Employment Solicitor at Price Bailey If you are unclear on any of the upcoming changes or any of the potential changes that are on the horizon, Price Bailey is well placed and highly experienced to provide you or your business with advice and assistance on any of the issues covered in this update. Please get in contact with the team if you would benefit from a discussion of the next steps for your business. If you have any questions or require any assistance, you can contact Claire and the employment team on the form below.

We always recommend that you seek advice from a suitably qualified adviser before taking any action. The information in this article only serves as a guide and no responsibility for loss occasioned by any person acting or refraining from action as a result of this material can be accepted by the authors or the firm.


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