Brexit chaos forces employers to increase payouts?

1st July 2016

Brexit chaos forces employers to increase payouts?

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The vote is in and there is no turning back, we are told. We would not dare to try to predict what the future of employment legislation will look like in a Post EU Britain, particularly in relation to the Working Time Regulations, TUPE or the Agency Workers Regulations. However, we are already feeling the effect of the Brexit chaos.

In less than a week and in the light of the political and economic chaos generated by the referendum, we have already seen some of our corporate clients open head offices on EU soil to avoid the next 2 or more years of uncertainty. There are also considerable fears over the impact of reduced markets for goods and services.

But the main impact we are seeing at the moment is with employees who are worried about their ability to bounce back, when faced with the termination of their employment. This has already had an impact on the way we practice our job. The reason for it is that when employees wish to challenge the termination of their employment, the bulk of their compensation will be made out of net loss of earnings between the time the employee loses their job and the time they find another paid at the same or similar level.

When the economy is strong, the consequences of poor employment practices are small for employers in comparison with other commercial factors that may affect their decision. If the dismissed employee is likely to bounce back, the value of their claim will be small, and the case is likely to settle.

For employers not wanting to comply with the many EU and UK employment legislation traps put in the way, offering a couple of months tax free on top of the contractual and statutory minimum under a settlement agreement has, up until now, been a relatively safe tactic. Since Friday, it may no longer be the case.

We already have had several negotiations were the employee has refused a small ex gratia payment. The argument is simple: if you had made this offer last week, it would have been a good offer. This week, it’s not. There are too many uncertainties about the future to be reassured that the package offered will see me through to my next job.

Until the chaos ceases, employers may want to consider paying more attention to best employment law practices. Employees who are offered a settlement agreement without a strong case for their dismissal should negotiate.

For more specific information or to discuss your requirements please call either Amanda Galashan or Julie Calleux at EmployEase on 0333 939 8741, or email us at info@employease.co.uk.

This blog does not constitute legal advice on any particular situation you may have.

© EmployEase 2016

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