Brexit – now what?

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The British public have voted to leave the European Union. What happens next is not as clear as the government has not given notice to the European Union of its intention to leave enabling negotiations for withdrawal to begin as required by Article 50 of the Treaty of Lisbon.

Since Britain’s membership of the European Union our legal system has been developing in parallel and absorbing various measures as negotiated and adopted at European level. The basis of our membership is the European Communities Act 1973 (ECA). As a result of this certain measures from the European Union such as treaties and regulations have had direct applicability in our legal system, whereas others such as directives have required secondary legislation to be introduced to ensure applicability in the British legal system.

Providing Brexit is finalised, it is likely that the ECA would be repealed and this could impact a range of secondary legislation that has been introduced and has been in force since the ECA. If Britain post exist does not maintain membership of the single market then it is likely that any rights contained in treaties or regulations would terminate at that point or soon thereafter.

Post Brexit to ensure participation in the single market the options include:

  • remaining a member of the EU;
  • become a member of the European Economic Area (EEA) and the European Free Trade Association (EFTA) retaining access to the single market (the Norwegian model); or
  • join EFTA but not the EEA and relations with the EU governed by bilateral agreements (the Swiss model).

If retaining membership of the single market is not deemed important then the options would be to join the EU Customs Union, access the EU market under World Trade Organisation rules or negotiate a free trade agreement.

Brexit is likely to impact on key areas where legislation developed at European level has been implemented in Britain including:

  • Data protection;
  • Employment law;
  • Health and safety;
  • Public procurement.

Data Protection

The Data Protection Act 1998 (DPA) is the key legislation in the UK providing a framework for protection of personal data and implementing the relative directive. The European institutions have recently agreed and passed a General Data Protection Regulation (GDPR) which is due to enter in force in 2018.

If Britain were to remain, this would result in changes being made to the DPA to align it with the GDPR. If Brexit became a reality and if the Norwegian model were adopted protections similar to those in the GDPR would have to be introduced to comply with obligations. Alternatively, the government may choose unilaterally to introduce equivalent protections as not being in the EU or EEA would increase burdens for any business that has access to or shared personal information of European citizens.

The ICO has already issued a statement that businesses need to be vigilant and prepare for the GDPR because if Brexit is realised, UK businesses trading or wanting to trade in the single market would have to show that an adequate regime was in place before they could do so.

Employment law

Whilst areas of employment law are established outside the scope of EU regulation, many others are influenced by directives developed at EU level and court decisions. In the event of a Brexit some of the areas that may be affected include:

  • the Equality Act 2010 particularly provisions making it unlawful to discriminate on certain protected characteristics;
  • TUPE provides a framework when transfer of a business or outsourcing of a service takes place and how rights of employees are to be protected including consultation of employees;
  • Working Time Regulations which provide for a maximum working week subject to an opt-out, minimum holiday entitlement, minimum rest periods; and
  • protection for agency workers including basic employment rights similar to those enjoyed by permanent employees;

The changes that are likely are to be made very much depend on the model that Britain adopts post Brexit. For instance if the Norwegian model is adopted enabling access to the single market would mean that Britain would continue to be subject to most aspects of European employment law.

Health and safety

Health and safety at work is governed by the Health and Safety at Work 1974. Parts of the Act are free standing UK legislation, whilst others were introduced to implement European rules.

There are also other pieces of legislation that are relevant such as the Construction (Design and Management) Regulations 2015, which focus on ensuring safety in construction work and were introduced to implement a European directive, and product safety law which is largely influenced by European law.

The Loftsted Review in 2011 found that health and safety measures in the UK were effective so it is unlikely that those rules emanating from Europe would be repealed en masse. However, as is the case with other areas of law, what action is or can be taken very much depends on the relationship that the UK continues to have with the EU. For instance access to the single market may mean that Britain would be required to continue with its compliance.

Public Procurement

The European Procurement regime is established through a number of directives. In the UK this has been implemented through secondary legislation including the Public Contracts Regulations 2015, the Utilities Contracts Regulations 2016 and the Concessions Contracts Regulations 2016.

If or when Brexit happens and the ECA is repealed this would raise questions as to the legality of these measures. This doesn’t mean that they would be repealed automatically or in their entirety since parts of these regulations are free standing UK rules. It also important to note that if the Norwegian model is adopted then the justification for their implementation would change but they would continue to apply as this is one of the preconditions for participation in the single market.

Whilst the British people have advised to leave the EU, how that advice is to be implemented by the government is not clear. In the short term there may be more clarity as to how Britain’s relationship with the EU is to be settled. It will only be after Brexit is effective in 2 years’ time or longer or if a different model is adopted that it will become somewhat clearer. In the meantime, it’s business as usual and European law continues to apply until the government decides otherwise.

As advised by different regulators such as the Information Commissioner’s Office, businesses and other organisations should be vigilant in ensuring compliance with the law in force and prepare for future changes as necessary.

If you have any questions or concerns in relation to the impact of Brexit on your business or organisation, please contact Daniel Milnes.

 

Nat Avdiu

About Nat Avdiu

Nat Avdiu is a Paralegal in the Contracts and Projects team at Forbes Solicitors. Nat provides updates for clients on a range of issues including: governance, data protection and freedom of information, procurement and charity law.
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