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Getting Ready for the End of the Brexit Transition Period: Four Issues for UK Employers

The Brexit transition period, which has largely maintained “business as usual” for employers since the UK left the EU at the start of this year, is coming to an end on 31 December 2020. While the COVID-19 pandemic has largely usurped the headlines over recent months, there are now just four weeks to go and planning for the changes that the end of the transition period will bring needs to take centre stage. This is particularly challenging when there is still so much uncertainty around whether a Brexit trade deal will be reached and, if so, what exactly it will contain. With time running out for a deal, preparing for business continuity in the event of a no-deal is essential. This article highlights four key issues for employers to consider in the coming weeks to ensure they are as ready as they can be for the end of the transition period.

  1. Can your employees work and live where you need them to?
    From 1 January 2021, the right of free movement for UK nationals in the European Economic Area (EEA), and for EEA nationals in the UK, will no longer exist. It is therefore vital that , prior to this date, employers have carried out a workforce audit to establish which employees might be affected and have implemented any necessary steps to ensure they continue to work (taking specialist global immigration advice as required). Employers should also look to the future and consider and plan for how new restrictions might affect recruitment and talent attraction going forward.
  2. Check your data transfers
    Employers who process the personal data of any individuals (including employees, contacts, customers and suppliers) in the EEA should review their data transfers and mechanisms and consider what action may need to be taken to ensure these are still compliant with relevant data protection legislation from 1 January 2021. In general, outbound transfers from the UK to the EU will be unaffected due to the UK adequacy decision. For EEA to UK data transfers, however, unless the EU Commission makes an adequacy decision, the UK will be considered a “third country” and the transfer rules under the EU General Data Protection Regulation (GDPR) will apply to any data coming from the EEA into the UK. As a result, GDPR safeguards (e.g. EU standard contractual clauses) must therefore be put into place to ensure that data can continue to flow. Privacy notices should also be updated to reflect any change in approach. The ICO website contains useful guidance and resources for organisations after the transition period ends.
  3. Review your European Works Council arrangements
    From 1 January 2021, any existing European Works Councils (EWCs) governed by UK law (either because their central management is located there, or because a third country, e.g. USA, headquartered group has chosen UK law to apply to the operation and functioning of the EWC) will need to be transferred to another member state. For EWCs which are not governed by UK law, the default position is that UK employees will no longer be entitled to have representatives on the EWCs, and a new representative agent based in an EU member state should be designated or assigned.
  4. Do employment contracts or policies need to be updated?
    Contractual provisions with geographical restraints linked to the EU or the EEA (for example, restrictive  covenants) should be updated to expressly include the UK, if this is intended. Similarly, employers should check contracts and policies for references to EU law and clarify these as needed, for example so that they also cover ‘retained EU law’ .

To discuss any questions arising from this alert or for specific legal advice on particular circumstances, please contact our Partners Beth Hale or Zulon Begum, and Associate Harriet Riddick.