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Three key areas for Irish employers to be aware of in advance of the UK's departure from the EU

AUTHORs: Deirdre Crowley Date: 18/12/2020

Introduction

In this article we highlight three key areas of note for HR practitioners and employers in Ireland who are preparing for the UK’s final departure from the European Union on 31 December 2020.  The three areas are (1) the transfer of Personal Data to the UK from Ireland, (2) Immigration, and (3) Employment Contracts,

The transfer of HR and Personal Data to the UK from Ireland

The Irish Council for Civil Liberties (“ICCL”) wrote to the European Commission on 12 October 2020 to convey why, in its view, the UK should not achieve adequacy status after its departure from the EEA on 31 December 2020.  The ICCL letter was also copied to the EU’s chief Brexit negotiator, Michael Barnier, and other senior EU figures.

Digital transfers between the UK and the EU amounted to 13% of the UK’s total global exports in 2018, so the stakes are very high for the UK and unfortunately, in turn, for us in Ireland.

The UK government has written the GDPR into UK law so that, after the Brexit transition period, a “UK GDPR” will apply.  Any Irish organisations that process the data of UK employees or customers will need to know how the regime under the new UK GDPR will differ from that under the current EU GDPR.  Prime Minister Johnson has said there will more than likely be “separate and independent policies” in the area of UK data protection.  There is much change afoot therefore for Irish organisations processing personal data in the UK.

In the absence of any change between now and 31 December 2020, from 1 January 2021, the UK will be considered a non-EEA country for the purposes of European data protection law.  This means that the legal mechanisms already in place for personal data transfers to non-EEA countries will also apply to all personal data transfers from Ireland to the UK.

An agreement known as a Model Clauses Agreement (MCA) is the most common legal mechanism used to transfer data from Ireland (and the EEA) to non-EEA countries.  An MCA is what we are typically advising clients to use as the legal basis for data transfers in the context of the UK’s departure from the EU on 31 December 2020.  Other mechanisms include a country adequacy decision and binding corporate rules.  The UK’s preference is to seek an adequacy decision, but it is increasingly unlikely that this will be granted ahead of 1 January 2021.

The long-running Max Schrems line of cases resulted in a significant decision being published by the Court of Justice of the European Union in July 2020 which had key implications for the transfer of personal data from Ireland to the UK by employers / controllers using MCAs.  Some of the more significant are that employers / controllers must:

Provide contractual mechanisms for access by data subjects to dispute resolution solutions regarding data transfer issues.

Understand and guard against the unlawful processing of personal data by third-party UK government agencies, and also understand the legal protections available to data subjects in the UK.  They should also consider whether the protections are adequate from a GDPR point of view.

Audit, and if necessary enhance, the information security measures in place to protect against unlawful processing of personal data in the receiving country.

Immigration

Subject to a number of limited exceptions, as of 1 January 2021, EU and non-EEA nationals looking to work and live in the UK will be required to obtain a visa. 

One important exception is Irish nationals working in the UK, or UK nationals currently working in Ireland, who will be exempt from this requirement where the Common Travel Area (“CTA”) continues to apply.  Under the CTA, Irish citizens are not considered to be ‘foreign nationals’ in the UK including Northern Ireland.  Likewise, UK citizens, including those in Northern Ireland, are not considered to be ‘foreign’ in Ireland.  As a result, immigration requirements do not currently apply to cross-border workers travelling between the UK, Northern Ireland and Ireland for work.

In May 2019, the British and Irish governments signed a Memorandum of Understanding (“MOU”) reaffirming their commitment to maintaining the CTA in all circumstances.  It is likely that under the terms of this MOU, the Protocol on Northern Ireland / Ireland and the Withdrawal Agreement, the CTA will continue to exist as of 1 January 2021.  As such, the right of Irish nationals to work in the UK, and of UK nationals to work in Ireland, should not be impacted by Brexit.  In effect, this continues to allow UK and Irish nationals to work visa-free in either country and to travel freely between them.

The impact of Brexit on how professional qualifications will be recognised post-Brexit is a key area of concern.  Under the terms of the Withdrawal Agreement, a person who had his / her professional qualifications recognised in the country (an EU Member State or the United Kingdom) where he / she currently resides or works, will be able to continue to have their existing professional qualifications recognised as before.  However, professional qualifications issued by UK bodies after 31 December 2020 may not automatically be recognised in Ireland, and this particular issue is still under consideration.

If the free movement of workers between the UK and the EU ceases with a hard Brexit, and in the unlikely event that the CTA ceases to exist, a UK national seeking to live and work in Ireland would be subject to the usual immigration rules that apply to non-EEA nationals entering Ireland to work.  This would mean that a cross-border worker would need an employment permit, and potentially an entry visa, before being permitted to work in Ireland.

Employment Contracts

Generally, subject to immigration considerations, employment contracts between Irish employers and UK employees will be unaffected by Brexit.

One area to watch is post-termination non-compete / non-solicitation clauses that are restricted to EU countries only.  Irish employers may need to decide whether or not to include an amendment specific to the UK market after 1 January 2021.

An obvious but material consequence of the UK’s departure from the EU is that EU employment and human rights law won’t apply to employment contracts governed under the UK law after 31 December 2020.  We are working with clients to audit their contracts of employment to determine if those contracts should fall under Irish law, or whether they should such be amended to explicitly refer to the applicable EU law.  This type of audit is crucial to avoiding any jurisdictional uncertainty in a contractual dispute.  A preliminary dispute about jurisdiction will delay the resolution of the commercial and employment issues in play and could add significantly to the time it takes to reach hearing or settlement.

What should employers consider?

We recommend that employers undertake a full employment law compliance audit as soon as possible, in order to assess any Brexit-related employment and data protection compliance issues on and after 1 January 2021.

Note: A shortened version of this article appeared in Business & Finance magazine’s online edition in November 2020.