“Taking back control of our laws” was a key Leave campaign battle cry. But, now that the Brexit transition period has ended, what are the legal implications for UK SMEs?
The post-Brexit era begins
On 24 December 2020, the EU and UK signed a post-Brexit agreement, just days before the UK transition period was due to end. The UK actually stopped being a member of the European Union (EU) on 31 January 2020. The transition was intended to smooth the UK’s departure for all concerned.
Then on Christmas Eve 2020, the UK and EU finally agreed a trade deal, hailed by the UK government as: “Preserving the UK’s zero-tariff and zero-quota access to the bloc’s [EU’s] single market”.
The agreement, which details new rules for “living, working and trading together”, is more than 1,240 pages long and has many provisions. So, what legislative changes should your small business be aware of and what will stay the same?
What will the UK government do about EU legislation?
The European Union (Withdrawal) Act 2018 “cuts off the source of European Union law in the UK by repealing the European Communities Act 1972 and removing the competence of European Union institutions to legislate for the UK.”
While the Act’s introduction ends the supremacy of EU law over legislation passed by the UK Parliament, it establishes a “mechanism to retain, for the time being, the corpus of EU law which presently applies to the UK.”
The entire body of EU legislation will be copied over into “the UK’s post-exit statute book”. EU-derived rights and legislation the government intends to retain and preserve in UK law post Brexit is called “retained EU law”, but the Act gives the government the right to amend this legislation.
What will happen to GDPR when the UK leaves the EU?
The GDPR is the EU General Data Protection Regulation. When introduced in May 2018, it was described as the most important change in data privacy regulation in 20 years.
The aim was to better protect EU citizens from privacy and data breaches, because the previous EU regulation (Directive 95/46/EC) was 20 years old, created when the world was very different to the data-driven place in which we now live.
The GDPR will no longer apply directly in the UK come the end of the Brexit transition period. But UK businesses will still need to comply with the GDPR’s requirements, as the Data Protection Act 2018 enacts these in UK law.
As of 1 January 2021, EU trade marks no longer protect trade marks in the UK. On the 1 January 2021, the Intellectual Property Office (IPO – the UK government body responsible for intellectual property) created a comparable UK trade mark for all right holders with an existing EU trade mark. This is the UKCA mark (see below).
If you’re a UK business with an EU trade mark, it will still provide protection in EU Member State countries and UK businesses can still apply to the EU Intellectual Property Office for an EU trade mark. There will be no changes to UK-registered trade marks as a result of the UK leaving the EU.
Visit government website GOV.UK for more information on post-Brexit trade mark protection. Similarly, registered Community designs (RCDs) and unregistered Community designs (UCDs) are no longer valid in the UK. They were automatically replaced by UK rights.
What about CE marking?
CE marks appears on a wide range of products traded on the single market in the European Economic Area. They indicate that the manufacturer has made sure that its product meets EU safety, health or environmental requirements or complies with EU legislation.
According to GOV.UK: “You [ie British businesses] can use the CE marking if you’re placing certain goods on the UK or EU market until 1 January 2021.” No other guidance is given at this stage on what happens after this date.
What about the UKCA mark?
As explained on GOV.UK: “The UKCA (UK Conformity Assessed) marking is a new UK product marking used for goods being placed on the market in Great Britain (England, Wales and Scotland). It covers most goods that previously required the CE marking. The UKCA marking alone cannot be used for goods placed on the Northern Ireland market, which require the CE marking or UKNI marking.”
Will Working Time Directive requirements end in the UK?
The government has repeatedly stated that it has no intention of changing workplace rights when the UK leaves the EU. Post transition, if that remains true, working time rules in the UK will remain the same. As explained on GOV.UK, by law (ie the EU Working Time Directive or under working-time regulations), UK employees do not have to work more than 48 hours a week on average (normally averaged over 17 weeks), unless they opt out.
The Working Time Directive also gives workers the right to at least four weeks’ paid holidays each year (pro rata for part-time workers), as well as rest breaks and rest periods of at least 11 hours in any 24. It also restricts excessive night work and gives workers the right to a day off after a week’s work.
The Directive was introduced to combat excessive working hours, cited by some to be a major cause of stress, depression and illness.
Which businesses are the most likely to be affected by legislation following Brexit?
The simple answer is that all businesses are likely to be affected by post-Brexit legislation.
In this article, we’ve looked at some of the key EU-influenced legislation. However, according to Thomson Reuters: “a total of 52,741 laws have been introduced in the UK as a result of EU legislation since 1990.”
That’s a lot of laws that are likely to impact your business if they all disappeared tomorrow. The government’s plan, though, is to create a new category of legislation to provide continuity:
Retained EU law would give continuity to businesses, individuals and public bodies because the law regulating many areas of the UK economy would remain in place even in a no-deal scenario.
The UK government may choose to deviate from the EU in the future and drop these laws. This a major point of discussion in the trade negotiations. The less regulatory alignment, the less scope for frictionless trade.
The businesses who will be most affected are those whose typical operations are dependent on regulatory alignment – e.g EU-UK trade, workforce regulation, patents, copyright and health and safety standards.
Even, if you think you won’t be directly affected too much, consider your supply chain and how this might impact on their operations.
Where else can I get Brexit-based legal advice?
The information above is far from comprehensive. It merely explains how things could or will change in some areas from 1 January 2021. If in any doubt, always seek professional legal advice tailored to your business’s specific needs.
Government website GOV.UK contains some information about how rules, regulations and legislation will change in the UK from 1 January 2021, but because negotiations between the EU and UK are ongoing, many questions remain unanswered. For general advice, you can ring the government’s Business Brexit Helpline on 0300 2000 900 (Monday to Friday, 9am to 6pm).
End of Article
Share this content
Brought to you by:
Revolut Business is the one platform for all your business finance needs. Enjoy a business account that’s a joy to use – with low fees, total transparency, and easy admin at any scale.