Employer-related Brexit Queries

by Ailbhe Dennehy, Associate in A&L Goodbody’s specialist Employment Practice Group

Ireland has a unique position in the midst of the Brexit debate.

• From a geographic perspective, Ireland’s 499km border with Northern Ireland (with hundreds of crossings) is the only land border between the UK and the European Union.
• From a political perspective, the 1998 Good Friday/Belfast Agreement removed the physical border between Northern Ireland and the Republic of Ireland.
• And finally, from a historical perspective, long before either Ireland or the UK were members of the EU, there was the Common Travel Area (the CTA) which permitted citizens of Britain and Ireland to enjoy reciprocal rights including freedom to live and work in their respective states.

Logistically for employers, Brexit has the potential to cause huge issues, particularly where employees’ roles require frequent travel across the EU. We have set out below the top five issues that we have identified as being key for employers.

Top 5 Issues for Employers

1. Documentation
Employers may need to review their existing contracts of employment – for example, do restrictive covenant clauses need to be amended to ensure they have accurately defined the “restricted geographic area” if employees are being relocated. Employers will also need to consider the continued viability of existing jurisdiction and governing law clauses. For example, if the restrictive covenant related solely to the European Union then would it continue to include the UK or not?

2. Immigration
Will EU citizens in the UK be subject to quotas, need employment permits or visas or vice versa? For now, the current position is that the status quo will be maintained – but for how long? Recently the Common Travel Area was placed on a more formal footing when the UK and Irish governments entered into a Memorandum of Understanding.

3. Data Protection
Another key consideration for employers will be the potential risk of breaching the GDPR (and Data Protection Act 2018) where employees’ personal data is being transferred to and from the UK in circumstances where the UK is no longer part of the EU. Employers will need to consider what safeguards should be put in place to protect the processing of personal data in such circumstances.

4. Setting up in Ireland
According to a recent report, as of November 2018, some 27 financial companies have committed to moving staff or activities from the UK to the Republic of Ireland since the 2016 Brexit referendum. The Central Bank of Ireland has also reported it has received more than 100 Brexit related applications for authorisation.
Ireland has an established history of demonstrating a pro-business open door approach to welcoming FDI. However, the Central Bank, like the approach taken by Regulators in other EU states, is clear that a post-box or brass plate approach for firms looking to keep a foothold in the EU by setting up in Ireland will not be tolerated. The CBI’s key principle is that any applicant firm must have a head office or principal place of business in Ireland which is the location of the firm’s “mind and management”.

5. Relocation
Post-Brexit and depending on the nature of the industry, certain employers may look to relocate from the UK to a EU member state which may give rise to concerns around retention of talent and key people. Apart from the cost of any relocation packages that may be on offer, employers will need to look at other considerations – such as tax equalisation and the potential impact on existing long-term benefit/incentive plans or pension schemes.

About the author
Ailbhe is an Associate in A&L Goodbody’s specialist Employment Practice Group in Dublin, Ireland. She advises both private and public sector, domestic and international clients in relation to a variety of contentious and non-contentious employment law issues. On the non-contentious side, Ailbhe regularly advises employers on the drafting of contractual documentation and policies, as well as guiding employers through complex employee management issues. Ailbhe frequently provides strategic and practical advice to clients in respect of individual and collective redundancy procedures and employment aspects in the context of corporate restructurings, outsourcings, mergers and acquisitions. On the contentious side, Ailbhe has acted for a range of clients in respect of unfair dismissals, discrimination, personal injuries, and employment-related injunctions and has represented employers before all fora. Ailbhe has also participated in a number of alternative dispute resolution scenarios. Ailbhe has advised and supported clients in crisis situations involving strikes and other industrial action.