By Gurpreet Duhra, Lisa Hodgson and Matthew Jeavons (Sheffield and Birmingham)

The recent Brexit outcome has led to a degree of uncertainty in UK consumer markets. How will the Brexit decision impact future UK employment prospects?

In the fashion industry, retailers could be affected by such issues as the free movement of workers, potential changes to EU derived employment laws and potential changes to business decisions. Clearly, Brexit will significantly impact the UK fashion landscape for years to come.

Free movement of workers

The multinational and multicultural nature of the UK fashion industry is unique – one of its main advantages and business assets compared to other global industries. The diversity of the workforce allows for a greater exposure of ideas and experiences which promotes creativity and innovation. Consequently, many employers are asking what can be done to ensure that, in a post-Brexit age, businesses are still able to continue resourcing talent from across Europe.

Importantly, until the UK formally triggers the Brexit process by invoking Article 50 of the Lisbon Treaty (which Prime Minister Theresa May has said will be triggered by the end of March 2017), there will be no change to the status quo. However, it is important for employers to take practical steps now, so they are not caught out when negotiations have been finalised and the terms of Brexit are certain. Such steps include:

  • evaluating the current workforce: be clear about the current immigration status of your workforce so you can identify any areas where you may rely heavily on migrant workers and are prepared for all possible contingencies.
  • auditing compliance with existing immigration rules: ensure that you are fully compliant with all existing immigration rules in the UK.
  • keeping up to date with developments: the issue of free movement is likely to be a main discussion point throughout negotiations.
  • understanding the parameters and time limits for business visitors to the UK: this is particularly relevant for the fashion industry, where regular worldwide travel is commonplace.

As for sending British employees to Europe, British talent has moved freely in and out of European fashion houses for years and, for the immediate future, this is unlikely to change.

Changes to EU – derived employment laws

Another question pertinent to the fashion industry is Brexit’s impact on employment law deriving from the European Union and how any subsequent changes will impact both employers and employees.

The reality of the matter is that much of the EU-derived employment laws are deeply embedded into UK domestic legislation and it would be difficult for the government to scale back the body of law that is currently in place to any significant extent.

However, we can speculate on some possibilities.

Taking one example, TUPE legislation is unlikely to see considerable change, as it has been part and parcel of normal business practice for an extended period of time. However, it would not be surprising if aspects of TU PE were reconsidered, including a relaxation of the rules regarding harmonisation of employee terms and conditions, and less stringent information and consultation requirements.

We could also see discussion around holiday pay. Over recent years, as a result of decisions by the Court of Justice of the European Union, the obligations on UK employers have increased as the meaning of what constitutes holiday pay has widened. Provisions that could be subject to change include obligations on UK employers to include elements other than basic pay, such as overtime and commission, when calculating holiday pay and paying holiday pay during periods of sickness and absence.

Short-term impact

For now, employers should be cautious in relation to issues arising from employees making remarks about the outcome of the Brexit vote to fellow colleagues, particularly derogatory comments around immigration status and employees’ right to remain in the UK . This gives rise to the risk of potential discrimination and harassment claims.

As it stands, the post-Brexit picture for the fashion industry is unclear. The industry’s ability to adapt and be creative in its approach to economic change will be fundamental in keeping large European fashion houses and the best of the European designers in the UK for years to come.