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Brexit, employers and the hospitality sector

Hotel Business 8 August 2016
Brexit, employers and the hospitality sector
Laura Farnsworth

Laura Farnsworth

The referendum vote on 23 June in favour of the UK leaving the EU has created a great deal of uncertainty for many business sectors. This is especially true for the UK and international hospitality industry, says Laura Farnsworth, a partner in the employment team at the law firm Lewis Silkin LLP.

Like other employers, the hospitality sector and those it employs are affected by a bevy of employment laws originating directly from the EU. Leaving the EU means that the UK government could choose to repeal this legislation. This is, however, unlikely and EU law will most probably continue to exert an important influence on workplace rights in the UK post-Brexit.

There are various reasons for why this may be the case; not least because some EU laws simply confirmed protections that were already provided by UK employment law. It is very unlikely that the government would decide to cut back on such long-established legal entitlements. Many EU-derived statutory protections are generally regarded by both employers and employees as a good thing and removing these protections is unlikely to be well received. Indeed, maintenance of these protections may be central to any future trade agreement with the EU.

Disentangling the UK from its EU commitments will, of course, be a complex process. Depending on the terms that are agreed, the government might then be in a position to start rolling back EU-derived employment laws or modifying certain provisions to make them more palatable to UK businesses and indeed UK employees.

While it is unlikely that UK employment law will be transformed significantly there are certain pressing issues that businesses in the hospitality sector may need to navigate, not least issues arising from reported incidents of abuse against individuals perceived as non-British and businesses who employ them.

This is a sobering thought, and employers will need to remain alert to the potential risk, particularly regarding their customer-facing staff. Appropriate training for staff about their obligations towards others and protecting themselves if they face any offensive or abusive comments should be prioritised, alongside reminding managers of the organisation’s statutory responsibilities.

In the event that an ultimate Brexit withdrawal agreement results in the termination of freedom of movement between the UK and the EEA, visas will be required for EEA nationals to work in the UK. Although there may be a period of transition and it is unlikely that anything this drastic will come in quickly, this is a serious concern for the sector. For the time being the existing rules continue in force but there may be change coming.

A high proportion of EU nationals in the workforces of hospitality businesses may be engaged under casual or seasonal contracts. Businesses should be reviewing such contracts now to check they are appropriate. This is made doubly important if there are concerns about workers leaving the UK without warning, leaving the business without sufficient cover.

The period of uncertainty the UK is now entering is likely to prove worrying for employees as well as the businesses that employ them. Employers should, therefore, keep up-to-date during the negotiations over the UK’s withdrawal from the EU so they are in a position to respond to queries and plan effectively.