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Issues for retail employers following the EU Referendum results

Submitted By Firm: Addleshaw Goddard

Contact(s): Michael Leftley, Sarah Harrop

Author(s):

Amanda Steadman

Date Published: 8/18/2016

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The Leave vote has sent significant shockwaves across our society. In this article, we consider the immediate risks, and the steps employers should take to prevent tensions spilling over into in the workplace.


Harassment at work

Retail employers should be mindful of harassment in the workplace following the vote to leave the European Union. In particular, employers should take steps to protect their EU migrant worker population from harassment on the grounds of nationality from colleagues and or third parties, such as customers. Since the referendum, EU nationals have reported a rise in xenophobic attitudes, for example, being asked by colleagues when they are planning to "go home" or how long they have been in the UK.

Employers also need to take steps to protect old workers from harassment on the grounds of age. The analysis of the referendum vote revealed a gap in the voting patterns of young and old. It is easy to ima gine how arguments about the Brexit vote might break out in the workplace and descend into age-related insults on both sides with the young dismissed as "naïve" and the old described as "out of touch".

It is also advisable to monitor the tone of discussions and behaviours connected with the Brexit vote, to avoid allegations of bullying or harassment associated with the worker's voting choice.

Continued and future employment of EU nationals

The retail sector relies heavily on EU nationals to meet its workforce needs, for example, in warehouses and depots. If the UK negotiates a deal which requires the continuation of free movement of persons (e.g. the Norwegian EEA model) then no material changes to the current rules are expected.

However, if free movement of persons is not part of the continuing relationship with the EU (e.g. if we opt for a Customs Union model or the "full Brexit" WTO model) then the impact on retail employers could be more significant:

  • In the short term, it is not yet clear whether EU nationals currently residing in the UK would be required to leave. This will ultimately depend on the deal which is struck with the EU. However, even the Leave campaign stated prior to the referendum that EU citizens who were "lawfully resident" in Britain should automatically be granted indefinite leave to remain.
  • In the long term, it would become more difficult for EU nationals to work in the UK. There could be a points -based system, which would make it harder for low-skilled EU nationals to work in the UK. This may make it harder for retailers to recruit sufficient staff. This may mean employers will need to recruit from outside the EU. It could also lead to upward pressure on wages in order to attract domestic job applicants.
Possible reforms to the UK's employment law framework following withdrawal from the EU

Could the UK Government repeal EU-derived employment law? If the UK negotiated a relationship with the EU along the lines of the Norwegian EEA or Swiss models, there would, in practice, be little scope to amend EU-derived employment laws. However, if the UK opted for a "full Brexit", adopting the WTO model, there could be some degree of change. Some of the key areas of interest for retailers are discussed below.

  • Discrimination: the Equal Treatment Directive is implemented in the UK by way of a primary act of Parliament, the Equality Act 2010. Protection from discrimination is now embedded within UK society and there is likely to be little support for a reduction in discrimination and equal pay protection within the workplace. One possible change is the introduction of a cap on compensation in discrimination claims, which would not be possible under EU law.
  • Working time: the Working Time Directive (WTD) was enacted in the UK by way of the Working Time Regulations 1998 (WTR). It is unlikely that we would see the complete deregulation of working time as such a move would be very unpopular with trade unions and employees. A more realistic prospect is that the Government would retain the WTR b ut repeal some of the more unpopular provisions such as: (i) the maximum 48-hour working week; (ii) record-keeping obligations; and (iii) provisions on calculation of holiday pay
  • Business transfers and outsourcings: the Acquired Rights Directive was implemented via the TUPE regulations. In theory, a full Brexit would mean that TUPE would fall away. However, it is unlikely that the Government would permit the complete deregulation of this area. Such a move would be very unpopular with trade unions and emp loyees. Further, many commercial outsourcing agreements have been priced on the basis that TUPE applies and/or will do so in future. A more realistic prospect is that the Government would retain TUPE, but would seek to amend it to make it less burdensome on business. One possible area of change would be to make it easier to harmonise terms and conditions of employment post-transfer.
  • Agency workers: the Temporary Workers Directive (TWD) regulates the working conditions of temporary workers by providing that basic working conditions for assigned temporary workers (i.e. agency workers) are no less favourable than for ordinary employees. The TWD was enacted in the UK by way of the Agency Workers Regulations 2010 ( AWR), under which agency workers gain these rights after they have completed a 12-week qualifying period. In the event of a full Brexit, it is possible that the Government would not retain the AWR, either in the current form or otherwise. This would reduce the burden on retail employers to equalise certain employment conditions for agency workers.
  • Family-friendly rights: different EU Directives establish the framework for "family-friendly rights" – for example, the Parental Leave Directive and the Pregnant Workers Directive. These rights are now embedded within our employment law framework. Indeed, the UK has exceeded many of the minimum EU requirements, for instance, when it introduced the system of shared parental leave in 2015. It would be an unpopular move to allow minimum protections to fa ll away. However, employers who enhance these rights (e.g. by providing enhanced maternity / paternity / shared parental pay) may seek to reduce these entitlements in the longer term.

Retail employers should monitor the Government's proposals in these areas and lobby appropriately for desired changes.

Employment laws which are not derived from EU law would be unaffected by Brexit (e.g. the right not to be unfairly dismissed, protection for whistleblowers, the right to be paid in accordance with the national minimum wage etc). That said, retail employers may wish to lobby to have such rights pared back given the financial uncertainty that accompanies a post -Brexit economy.

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Altra Industrial Motion Inc.

Altra Industrial Motion Inc. has multiple locations in the U.S., as well as Central America, Europe, and Asia. The Employment Law Alliance has proved to be a great asset in assisting us in dealing with employment issues and matters in such diverse venues as Mexico, Australia, and Spain. We have obtained excellent results using the ELA network for matters ranging from a multi-state review of employment policies to assisting with individual employment issues in a variety of foreign jurisdictions.

In one instance, we were faced with an employment dispute with a former associate in Mexico that had the potential for substantial economic exposure. The matter had been pending for over a year, and we were not confident in the employment advice we had been receiving. I obtained a referral to the ELA counsel in Mexico, who was able to obtain a favorable resolution of the dispute in only a few days. Based on our experiences with the ELA, we would not hesitate to use its many resources for future employment law needs.

American University in Bulgaria

In my career I have been a practicing attorney, counsel to the Governor of Maine, and CEO of a major public utility. I have worked with many lawyers in many settings. When the American University in Bulgaria needed help with employment litigation in federal court in Syracuse, New York, we turned to Pierce Atwood, the ELA member we knew and trusted in Maine, for a referral. We were extremely pleased with the responsiveness and high quality of service we received from Bond Schoeneck & King, the ELA's firm in upstate New York. I would not hesitate to recommend the ELA to any employer.

David T. Flanagan
Member of Board of Trustees 

Arcata Associates

I really enjoyed the Conducting an Effective Internal Investigation in the United States webinar.  We are in the midst of a rather delicate employee relations issue in California right now and the discussion helped me tremendously.  It also reinforced things that you tend to forget if you don't do these investigations frequently.  So, many, many thanks to the Employment Law Alliance for putting that webinar together.  It was extremely beneficial.

Lynn Clayton
Vice President, Human Resources

Barrett Business Services, Inc.

I recently participated in the ELA-sponsored webinar on the Employee Free Choice Act.  I was most impressed with that presentation.  It was extremely helpful and very worthwhile.  I have also been utilizing the ELA's online Global Employer Handbook.  This compliance tool is absolutely terrific. 

I am familiar with several other products that purport to provide up-to- date employment law information and I believe that this resource is superior to other similar compliance manuals.  I am delighted that the ELA provides this free to its members' clients.

Boyd Coffee Company

Employment Law Alliance (ELA) has provided Boyd Coffee Company with a highly valued connection to resources, important information and learning. With complex operations and employees working in approximately 20 states, we are continually striving to keep abreast of specific state laws, many of which vary from state to state. We have participated in the ELA web seminars and have found the content very useful. We appreciate the ease, cost effectiveness and quality of the content and presenters offered by these web seminars.  The Global Employer Handbook has provided our company with a very helpful overview of legal issues in the various states in which we operate, and the network of attorneys has helped us manage issues that have arisen in states other than where our Roastery and corporate headquarters are located in Portland, Oregon.

Capgemini Outsourcing Services GmbH

As an international operating outsourcing and consulting supplier Capgemini has used firms of the Employment Law Alliance in Central Europe. We were always highly satisfied with the quality of employment law advice and the responsiveness. I can really recommend the ELA lawyers.

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Stephen HirschfeldAs an employment lawyer based in San Francisco, I work closely with high tech clients with operations around the globe. Last year, one of my clients needed to implement a workforce reduction in a dozen countries simultaneously. And they gave me 48 hours to accomplish this. I don't know how I could have pulled this off without the resources of the ELA. I don't know of any single law firm that could have made this happen. My client received all of the help they needed in a timely fashion and on a cost effective basis.

Stephen J. Hirschfeld
Partner 

Hollywood Entertainment Corporation

As the Vice President for Litigation & Associate General Counsel for my company, I need to ensure that we have a team of top-notch employment lawyers in place in every jurisdiction where we do business. And I want to be confident that those lawyers know our business so they don't have to reinvent the wheel when a new legal matter arises. With more than 3400 stores and 35,000 employees operating in all 50 U.S. states and across Canada, we rely on the ELA to partner with us to help accomplish our objectives. I have been delighted with the consistent high quality of the work performed by ELA lawyers. I encourage other in-house counsel to use their services, as well.

Ingram Micro

Ingram Micro is the world's largest technology distributor, providing sales, marketing, and logistics services for the IT industry around the globe. With over 13,000 employees working throughout the U.S. and in 35 international countries, we need employment lawyers who we can count on to ensure global legal compliance. Our experience with many multi-state and multi-national law firms is that their employment law services are not always a high priority for them, and many do not have experts in many of their offices. The ELA has assembled an excellent team of highly skilled employment lawyers, wherever and whenever I need them, and they have proven to be an invaluable resource to our company.

Konami Gaming

Our company, Konami Gaming, Inc., is growing rapidly in a very diverse and highly regulated industry. We are aggressively entering new markets outside the domestic U.S., including Canada and South America. I have had the recent opportunity to utilize the services provided by the ELA. The legal advice was both responsive and professional. Most of all, the entire process was seamless since our Nevada attorney coordinated the services and legal advice requested. I look forward to working with the ELA in the future, as it serves as a great resource to the legal community.

Jennifer Martinez
Vice President, Human Resources

Nikkiso Cryo, Inc.

Until recently, I was unaware of the ELA's existence. We have subsidiaries and affiliates throughout the United States, as well as in Asia, the Middle East and Europe. When a recent legal issue arose in Texas, our long-time Nevada counsel, who is a member of the ELA, suggested that this matter be handled by his ELA colleague in Dallas. We are very pleased with the quality and timeliness of services provided by that firm, and we are excited to now have the ELA as an important asset to help us address employment law issues worldwide.

Palm, Inc.

The ELA network has been immensely important to our company in helping us address an array of human resources challenges around the world. I strongly encourage H.R. executives who have employees located in many different jurisdictions to utilize the ELA's unparalleled expertise and geographic coverage.

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Former Senior Director of Human Resources

Rich Products

As the General Counsel for a company with 6,500 employees operating across the U.S. and in eight countries, it is critical that I have top quality lawyers on the ground where we do business. The ELA is an indispensable resource. It has taken the guesswork out of finding the best employment counsel wherever we have a problem.

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Ricoh Americas Corporation

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Roberts-Gordon LLC

Our affiliated companies have used the Employment Law Alliance in connection with numerous acquisitions, and have always been extremely pleased with our ability to obtain the highest quality legal advice on due diligence issues from jurisdiction to jurisdiction. We have found the Employment Law Alliance firms to be not only first rate with respect to their legal advice but also responsive and timely in assisting us with federal and state law issues critical to our due diligence efforts. We consider the Employment Law Alliance to be an important part of our team.

Rockwell Collins, Inc.

We have partnered with many ELA firms on the development and execution of case management strategies with very positive results. We have been very pleased with the legal advice and counsel provided by the law firms we have utilized who are affiliated with the Employment Law Alliance. The ELA firms we have worked with are customer focused, responsive, and thorough in their approach to handling labor and employment law matters.

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Assistant General Counsel

Sanmina-SCI

Sanmina-SCI has facilities strategically located in key regions throughout the world. Our customers expect that we will provide them with the highest quality and most sophisticated services in the marketplace. We have that same expectation for the lawyers with whom we do business. With operations in 17 countries, we need to be certain that we have a team of lawyers working together to address our employment law needs worldwide. The ELA has delivered exactly what it promised-- seamless and consistent high quality services delivered in each locale around the globe. It has quickly become a key asset for our human resources department.

Starwood

We own, manage, and franchise hotels throughout the U.S. and in more than 90 countries. With more than 145,000 employees worldwide, ensuring that we comply with the complex web of local labor and employment laws in every one of these jurisdictions is a daunting task. The Employment Law Alliance has served as an important resource for us and we have benefited greatly from its expertise and long reach. When a legal dispute or issue has arisen in some far-flung place, Employment Law Alliance lawyers have always provided responsive, practical, and cost-effective assistance.

Wilmington Trust Corporation

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General Counsel