SOLICITOR IN ENGLAND AND WALES
AVOCAT AT THE BAR OF PARIS
MONKAM SOLICITORS advises and assists companies to reorganise their business during the Brexit.
Indeed, Wednesday 29 March 2017 will remain a major date in the History of the European Union because it is that day that the UK Prime Minister, Ms Theresa May sent the letter triggering article 50 of the Treaty on European Union to Mr. Donald Tusk, President of the European Council. In other words, Great Britain will be out of Europe within the coming 24 months maximum. That historic event has a serious meaning for the companies doing businesses in the UK, i.e. they should reorganise or restructure their activities within this short time limit.
No important changes would be brought to the current UK employment law during that 24-month period. The UK government has published a Great Repeal Bill whose purpose is to transfer most of EU laws into UK laws when the Brexit is effective.
There are various options that would allow the companies established in the UK to restructure their business:
- First option said 'soft': the company may warn its employees that it wishes to amend certain elements of their employment contracts, e.g. the place of work. The positions would be transferred to other places or sites in the European Union. Such amendment cannot be unilateral and requires the acceptance of the relevant employees.
The employer should obtain easily the acceptance of the employees who are mobile such as the executives, the top managers, the engineers who speak various languages. A simple addendum to the contract of employment should suffice with possible financial compensations and help to move from countries. However, the employees with few qualifications and who can hardly move might refuse such proposal to amend their contracts of employment.
- Second option said 'hard': the company starts a procedure to collectively dismiss the employees. It should be noted that the law requests a specific procedure where the employer considers to dismiss no fewer than 20 employees within a 90-day period.
The unions recognised in the company (or employees' representatives elected specifically) should be consulted in good times and no later than 30 days before the effectiveness of the redundancies. That period is extended to 45 days where no fewer than 100 employees are dismissed in one establishment. Further, the affected employees should be consulted individually and they should be offered alternative employments or redeployments.
- Third option said 'mixed': the company sells or transfers its business to another investor or purchaser. That is called the Transfer of Undertakings (Protection of Employment). It should be noted that the relevant employees might object to the transfer and resign from the company with no employer's liability (provided the law has been complied with). The new investor has to take over the contracts of the employees relating to the business transferred. However, the investor has a legal right to adapt the purchased entity, especially if it invokes that the change is justified by an economic, technical or organisational reason (ETO reason) that renders necessary a change in the workforce
Regardless of the option chosen, it is essential that the employers who reorganise their activities work closely with the work unions or employee representatives in order to introduce the changes and lower the risks of industrial actions. Further, it is advisable to start the restructuring as soon as possible because the countdown of 24-months has started and is really short.
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