Brexit – What could the implications be for small businesses and their employees?

It is the talk of the nation – Brexit. Following weeks of speculation, a 51% deciding vote to Leave preceded David Cameron announcing his resignation, the crash of the FTSE 100 and the value of the Pound plummeting. It was inevitable that, in the event of the Brexit, the nation would be subject to economic and political uncertainty, but now the votes have been cast, what are the next steps for the UK?

There has been a vacuum in reliable information since the vote, a volatile political landscape, with both main parties seemingly imploding, and a lack in leadership in what happens next.

The very first thing to take stock of is that now that the votes have been tallied nothing will happen immediately. There will be a period of time, before Article 50 of the Lisbon Treaty, where the United Kingdom will negotiate its future relationship with the European Union (EU), is invoked.

That is if Brexit happens at all! Talks of a veto by Scottish MP’s angry at the vast regional differences in voter opinion, petitions for a further referendum and suggestions that Article 50 cannot be invoked whilst there is such turmoil, or even if there is the Political will from the current Parliament.

What is certain… is that the uncertainty will continue for a while yet.

Brexit And Business – Where Do We Go Now?

Should things progress along the path laid out by the winning side of the referendum there are certain areas of influence that are likely to change. One of the fundamentals of EU law is the celebrated principle of freedom of movement of goods without import duties, or equivalent. Small, and large businesses alike will therefore suffer the imposition of tax, duties or equivalent charges when trading with clients and partners on the continent.

If such added costs cannot be either passed on or absorbed, the logical step would be the termination or suspension of existing contracts. This will depend upon the Force Majeure, the provisions within the contract that covers the circumstances beyond the parties control, and whether they will allow suspension and eventual termination, and whether the parties involved agree that the ‘Brexit’ is such an event.

This may not come about however, as realistically, there’s a good chance that the UK will negotiate an agreement on the free movement of goods. Precedence with other non-EU European nations suggests that the free movement of labour will be insisted upon in exchange for the free movement of goods, which is good news for businesses with a workforce already including EU nationals.

In the absence of any such agreement, employing workers originating from the EU could become far more difficult. If British law, as it currently stands, is applied they would likely undergo the points based system applied to non-EU nationals, and could be subject to quotas.

There is a fear that any workers from the EU who are already employed by your business in the UK may have to surrender their positions and go back to their native countries. Again, there is likely to be a pragmatic approach. There are many UK citizens working in other EU countries, so it is not easily foreseeable that a reciprocal arrangement may be agreed upon.

Taking into account these two issues alone, it seems that as a result of ‘Brexit’ the chances therefore of a mass exodus any time soon are slim, it could take years for the details of a new arrangement to be finalised, and even when this occurs, many things are likely to remain at least similar to how they were.

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