With the British public voting to leave the European Union, Partner and specialist in employment law Aneil Balgobin discusses how the break from the EU could spell uncertainty for employees.
In the immediate aftermath of the leave result, global markets reacted negatively, with the FTSE falling to levels comparable to previous global market crashes and Sterling falling to its lowest rate against the Dollar in decades.
It is expected that markets will regain some sense of stability once traders settle down and the full effect of the vote is taken on board, however in the immediacy where does the result leave employees?
Overnight price fluctuation for Sterling pointed to the uncertainty of the effect of Brexit and while it is expected that UK businesses will be battered by volatile markets and a falling currency, Aneil explains that they will have planned for most possible outcomes:
“Most companies will have had contingency plans in place in the event of a vote to leave the EU, so they won’t be thinking of making any rash decisions. Instead businesses are likely to wait to see how things settle down (or get worse) over the next few days before putting into place plans such as restructuring exercises.”
“The next few weeks and months will be very interesting times for companies as they monitor not just the performance of their own plans, but also their competitors and suppliers. Often there can be a “domino effect” requiring emergency action and businesses will be mindful of this.”
The full extent of the effect of the vote for employees will only be revealed when exit negotiations begin; with David Cameron announcing his resignation as Prime Minister, it remains unclear who will be at the table to negotiate Britain’s exit.
The uncertainty of the exit negotiations could be the biggest factor affecting employees, as job market changes could depend on how – or even if – Britain retains access to the single market.
In the immediacy, the fall in Sterling is likely to undermine employees’ personal finances, as a devalued currency could cause an increase in the cost of living and would hold negative connotations for savings and pensions.
While the ultimate effects of these factors are subject to speculation, Aneil explains that employees are less likely to have planned for the result of the referendum, which could cause the greatest implications:
“Unlike businesses and employers, employees are less likely to have looked at how the direct aftermath of the vote will affect them.”
“What this means is that employees may now be looking at the full effect of the vote, and this likely would have been the same even if “Remain” had won the majority.”
“Whether it’s looking at overarching effects on the job market 4 or 5 years down the line, or it’s as simple as individuals not exchanging currency for foreign holidays before the vote, it’s a lot less likely that employees would have sat down and made a contingency plan for how either vote in the referendum would have affected them. Furthermore, many employees would be unaware of their employer’s own contingency plans and they can therefore not have prepared for the unknown. “
“In the direct aftermath of the vote any employees who are unsure how they will be affected by Brexit should seek advice from experts, who will be able to break down the effect of the vote and provide advice on the best steps moving forward.”
If you are unsure of how the EU referendum vote will affect you and your family, get in touch with one of the expert team members at Simpson Millar, who will be able to give you tailored advice on how Brexit could affect your employment.
With decades of experience, our employment team are on hand to explain the complexities of Brexit in an accessible, jargon free tone, which will outline what you can expect moving forward from the leave vote.