UK Election and Brexit – what happens next?
The UK general election has just taken place and has produced a more decisive result than expected, with Conservative Prime Minister Boris Johnson gaining a substantial majority of seats in the House of Commons. This has immediate implications for Brexit.
It means, first of all, that there is little chance now of a second referendum on whether the UK should leave the European Union (EU). Instead, the UK is likely to withdraw from the institutions of the EU as early as 31 January 2020.
Also important is the manner in which the UK will depart the EU. Throughout much of 2019 there was widespread concern that the UK would leave without a Withdrawal Agreement. Now the new version of the Withdrawal Agreement negotiated by the Prime Minister in October is likely to be ratified by the UK and EU parliaments before the end of January.
The Withdrawal Agreement includes among other things a transition period, during which the UK will be treated as a member state for most practical purposes. This should end on 31 December 2020, unless the transition period is extended, which the government has vowed not to agree to under any circumstances. So for the coming year, at least, there will be almost complete continuity in terms of EU laws governing, for example, data protection, banking, dispute resolution, public procurement and the regulation of state aid in the UK.
The main purpose of the transition period is to allow time for the UK and EU to negotiate a long-term trade agreement. Whether that can be achieved within the time available is open to question. However, the transition period serves another purpose too, which is to allow the UK and EU to negotiate fall-back arrangements in specific areas should the long-term agreement not be comprehensive or ready in time. These are the kinds of arrangements that any ‘third state’ (country outside the EU) can benefit from if its laws broadly meet EU standards. They cover data protection, for example, as well as banking regulation and market access under so-called ‘equivalence’ rules. The EU has refused to negotiate these arrangements while we are still technically a member state.
Dispute resolution will also benefit in the longer term from the UK entering the Withdrawal Agreement with the EU, because it provides that UK court judgments can be enforced in the remaining member states (and vice versa) at any time, providing proceedings are commenced before the transition period ends. Arbitral awards are not directly affected by Brexit and will be enforceable in the EU in any event.
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Feeling Overwhelmed by Brexit? We’re Here to Help.
Are you still confused about Brexit after three years of debate? Is the uncertainty surrounding Brexit impacting your workforce? Are you fully prepared to meet your obligations when Brexit finally enters into force? What happens to your business in the unlikely event that Brexit fails and the UK remains a member of the EU?
We understand how all this uncertainty over Brexit can have real consequences for your business. We appreciate that employers throughout Europe are concerned about the sustainability of their operations, especially when they are confronted with an abundance of complex and far-reaching changes to the rules, regulations, policies, obligations and industry practices that govern the workplace.
L&E Global’s Brexit Exchange Forum is our latest interactive knowhow platform created to help clients confront the challenges posed by Brexit, informatively and effectively.
Brexit in a Nutshell
The term ‘Brexit’ (a portmanteau of “British” and “exit”) refers to the withdrawal of the United Kingdom (UK) from the European Union (EU). On 23 June 2016, a referendum was held in which voters were asked, “Should the United Kingdom remain a member of the European Union or leave the European Union?” When the results were announced the next day, nearly 52% (per cent) voted in favour of leaving the European Union, compared to 48% (per cent) who voted in favour of remaining a member of the EU.
Following the vote, the Government of the UK invoked Article 50 of the Treaty on European Union (Article 50, enacted by the Treaty of Lisbon on 1 December 2009, introduced for the first time a procedure for a member state to withdraw voluntarily from the EU), initiating the formal withdrawal process, which, consequently, launched negotiations to reach an agreement that would set forth the relationship that would eventually exist between the UK and the EU after the withdrawal. The UK was scheduled to cease being a member of the EU at day’s end on 29 March 2019. However, in order to allow for negotiations to continue, an extension has since been granted until 31 October 2019.
Finding Certainty in Uncertain Times
Discussions are currently underway regarding the impact of Brexit on labour law and on UK companies in Italy and across the EU, the right of British citizens to reside and work in Spain and the Netherlands, as well as the employment law implications for employers and employees as a result of Brexit. With its momentous effect on immigration, will Brexit ultimately bring an end to the free movement of workers? Similarly, if such restrictions lead to a substantial reduction in the number of skilled labourers available for hire (e.g. affecting the construction industry), there would a sizable spike in skilled labour wages, with fewer workers able to fill the steady demand of assignments, which in turn could lead to projects going over schedule and increasingly over-budget. Labour market inflation would therefore be the inevitable result of Brexit’s influence over the legal and economic interests of a shared, global marketplace.
Many businesses have already made so-called “hard Brexit” contingency plans. Still, there is no “one size fits all” for Brexit preparedness for businesses. While much of the UK is already underway with contingency planning, exploring new strategies now could help to avoid disputes later on. The same is also true of her closest regional and international trading partners.
L&E Global’s labour and employment law specialists worldwide are carefully monitoring the ongoing deliberations between the UK and the EU, studying, researching, and analysing the latest legal trends as they develop, exploring opportunities and devising strategies to help employers successfully meet the multitude of challenges that the transformative brunt force of Brexit demands. As the negotiations progress and we near the UK’s exit from the European Union, L&E Global will continue to provide you with updates concerning employment law matters affected by Brexit.
Brexit Working Group
L&E Global’s Brexit Working Group is made-up of a core team of dedicated lawyers who have developed an acute expertise on Brexit, specifically as it relates to employment, labour and immigration law developments and the implications of such measures entering into force and the impact that would have on businesses, especially multinationals operating across borders.
+44(0)207 876 5000
+44(0)20 7876 4317
+44(0)207 078 7008
Senior Immigration Advisor
+44(0)207 876 6345
+44(0)20 7876 4328
+33 01 56 62 30 00
+49 (0) 30 2062953-0
John L. Sander
+1 (212) 545-4050
+31 20 34 46 100
+39 (0) 2.30311377
+32 2 644 05 11
Brexit in a Flash
UK Election and Brexit – what happens next?
BREXIT: some thoughts on employment law implications
Impact of Brexit on EU Referendums applicable to UK Employment Law
Impact of Brexit on Italy
New Law Outlining The Transitory Discipline In Case Of Brexit-No-Deal Entered Into Force
Spain: Residence and work permits for UK’s national members in the case of a “no-deal” Brexit
The Netherlands: Brexit and the consequences for employers and employees working in the Netherlands
UK: Brexit Bill – Royal Assent expected soon
UK: No-deal Brexit: workplace rights technical notice
For additional Brexit-related resources, including articles, blogs, special reports, bulletins and more, we invite you to explore Brexit: Navigating the unknown a centralised database for clients, courtesy of L&E Global’s member firm in the United Kingdom Clyde & Co.