It has been confirmed that the majority of the people in the UK voted to leave the European Union (EU). Obviously, leaving the EU could mean significant changes for employment law in Great Britain. But how does this impact Ireland and Northern Ireland? The aim of this bulletin is to provide an update on what the Leave vote means for employment law.
NORTHERN IRELAND
Does a Leave vote mean that current laws in NI no longer stand?
No. Any UK laws incorporating EU laws will remain in place until the legal process is undertaken to change them. Obviously, UK laws which do not stem from the EU are not affected by the vote.
When will laws change?
Should the UK Government decide to change laws now that it is no longer governed by the restrictions of EU law, it will be some time before this happens.
Generally, countries are given two years to negotiate their exit from the EU. This means that the actual exit is likely to take place in 2018 at the earliest. Consequently, there will be no changes to laws because of the Leave vote until 2018 at the earliest. Once the exit is complete, the Government will need to go through the normal process for changing laws which, again, is not an overnight thing.
Which employment laws could change?
Essentially any employment law that stemmed from EU Directives or Regulations is up for debate. However, it seems quite likely that the first laws that would be considered for amendment would relate to annual leave and holiday pay entitlements, and agency workers.
What happens to workers from the EU working in NI now?
Nothing, for now. EU workers may still continue to work throughout the UK as normal. Any changes to immigration laws will probably only affect those who want to enter the UK after the exit actually happens (probably 2018 as mentioned above). It is likely to be more difficult to employ anyone from the EU in the long term but exactly what happens to those currently in the UK depends on the exact terms of the exit. If new laws require existing EU workers to obtain permission to remain in the UK, there is likely to be a long phase in period.
IRELAND
Does a Leave vote in the UK have any bearing on Irish employment law?
No. Ireland remains a part of the EU and is not directly affected by the ‘leave’ result. Accordingly, all employment laws in Ireland will be unaffected.
What will be the likely effect on the Irish workplace?
Whilst Ireland is not directly affected, the knock-on implications could be significant, particularly from an economic perspective. Minister for Transport, Tourism and Sport, Shane Ross, has stated that he expects that Ireland “are in the worst position of any country in Europe" when it comes to the impact of Brexit. The likely economic effects could be as follows:
- The Department of Finance announced that a ‘leave’ result could lead to a reduction of up to 1.6% in Irish GDP.
- Anglo-Irish trade accounts is valued at circa €1 billion per week. This may be severely impacted by the ‘leave’ result.
- Irish exports to the UK will be less competitive due to a drop in the value of the sterling making UK products cheaper to buy.
- As sterling drops, the likelihood of Irish consumers seeking to purchase UK products will increase.
- Minister Noonan had previously indicated that there would be up to €1 billion available in the next budget for increased capital spending, increased public sector pay, and for general reductions in tax rates. However, in view of the above, this is now doubtful.
NORTHERN IRELAND & IRELAND: CROSS-BORDER CONCERNS
It is unclear what measures will be introduced in respect of the Ireland / Northern Ireland border given that this will also become an EU / Non-EU border. As such, the following important matters are up in the air:
- Will passport control be required at the border?
- Will employment permits be required for Northern Irish workers working in Ireland and conversely for Irish workers working in Northern Ireland?
It is not uncommon for an Irish employee to work in Northern Ireland, and vice versa. Also, it is very common for field based employees, such as those in sales, to cover both Ireland and Northern Ireland areas. The above issues could greatly impact such arrangements and we will ensure to keep on top of these developments and update our members accordingly.
The economic impact will likely be keenly felt by employers in Ireland and Northern Ireland and employers are encouraged to consider what contingency measures they can introduce in respect of the workplace to meet any potential difficulties head on.
CONCLUSIONS
Employers should carry on business as usual for now; the detail on the exit will be announced over time so for now we simply must wait and see how the UK Government handles it and what the fallout will be for the economy. Remember – there will be no practical changes to laws in Northern Ireland for some time, but the uncertainty could greatly business.
