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Government publishes first set of technical notices on how to prepare for a ‘no deal’ Brexit

  • United Kingdom
  • Education - Briefings

29-08-2018

Introduction

On 23 August 2018 the Government published the first 25 in its series of technical notices setting out information to allow businesses and citizens to understand what they would need to do in the event that the UK leaves the EU on 29 March 2019 without a deal (a ‘no deal’ scenario) and to make informed plans and preparations. The Government has announced that it will publish more such notices during September and there has been speculation that there will be more than 80 in total.

The 25 technical notices (including an overarching framing notice) cover a number of areas and below we summarise those which are likely to be of most relevance to education institutions covering workplace rights, Horizon 2020, Erasmus+ and state aid.

Notably missing is a notice on citizens’ rights, although on 21 August 2018 Dominic Rabb, Secretary of State for Exiting the European Union, stated that, in relation to EU citizens, in the event of a ‘no deal’ it is “inconceivable we would do anything other than make sure that they are legally in a position where they're secure to stay" but that the Government needs to set out details of that in due course. Previously the Government has announced that the scheme under which EU citizens and their family members can apply for settled status after 5 years in the UK will be phased in later this year, and will gradually open more widely until it is fully open by the end of March 2019.

In each of the technical notices the Government states that it believes a ‘no deal’ scenario remains unlikely given the mutual interests of the UK and the EU in securing a negotiated outcome, although in the overarching framing notice it concedes that “It is only at the point that the UK Parliament has ratified the deal and the EU Council has obtained the European Parliament’s consent and adopted the decision to conclude the agreement, that we can be certain that the UK will not enter a ‘no deal’ scenario in March 2019”.

Workplace rights

Since the Brexit vote the Government’s stance had been that the exit from the EU will not result in a watering down of workers’ rights and this approach is maintained in the technical notice which states that the Government “firmly believes in the importance of strong labour protections”.

This notice concerns workplace rights derived from from EU law and refers in particular to the Working Time Regulations; family leave entitlements; certain requirements to protect the health and safety of workers; legislation to prevent and remedy discrimination, victimisation and harassment; the TUPE regulations; protections for agency workers and workers posted to the UK from EU states; legislation to cover employment protection of part-time, fixed-term and young workers; information and consultation rights for workers, including for collective redundancies, and legislation covering insolvency.

The notice points out that the provisions of the European Union (Withdrawal) Act 2018 mean that workers in the UK will continue to be entitled to the rights they have under UK law, including those aspects which derive from EU law. Whilst small amendments will be made to the language of the legislation to reflect the fact that the UK will no longer be a member of the EU, it is stated that these amendments will not change existing policy.

There are a couple of exception to this, where a ‘no deal’ scenario would impact on participation in agreed arrangements with the EU as follows:

• Employer Insolvency: in a ‘no deal’ scenario, people living and working in the UK for a UK or EU employer will continue to be protected under the same parts of the Employment Rights Act 1996 and Pension Schemes Act 1993 implementing the Insolvency Directive. On the other hand, any UK and EU employees who work outside the UK in an EU country for a UK employer may still be protected under the national guarantee fund established in that country but this will not always be the case, as there are variations in how each EU country has implemented the guarantee required by EU law. The Government advises that such employees should make themselves aware of the relevant implementing legislation in the EU country in which they work.

• European Works Councils (EWCs): the Government says it will ensure that the enforcement framework, rights and protections for employees in the UK EWCs continue to be available in a ‘no deal’ scenario “as far as possible”. This means that UK regulations would be amended so that provisions relevant to the ongoing operation of existing EWCs will remain in force and requests for information or to establish EWCs made before, but not completed by, exit date will be allowed to complete but that subsequently no new requests to set up an EWC can be made. The Government suggests that UK organisations with EWCs, and trade unions that are parties to EWC agreements, may need to review those agreements in light of there no longer being reciprocal arrangements between the UK and the EU.

Horizon 2020

The Government points out that in the event of a ‘no deal’ scenario, the UK’s departure from the EU would mean that UK organisations may be unable to access funding for Horizon 2020 projects after exit day. However, it refers to the announcements by the Chancellor of the Exchequer in August and October 2016 of the Government’s decision to guarantee funding for the full duration of the project for all successful bids submitted by UK participants before 29 March 2019 under the Horizon 2020 programme.

In July 2018 this guarantee was extended to cover funding for successful bids where UK organisations are able to participate as a third country in competitive EU grant programmes. This extension runs from exit day until the end of 2020. However, third country participation does not extend to some Horizon 2020 calls (including European Research Council grants and some Marie Sklodowska-Curie Actions) and the Government says it is considering what other measures may be necessary to support UK research and innovation in a ‘no deal’ scenario.

Furthermore, the guarantee only covers the funding for UK participants and not that of organisations from other countries who are in consortia with UK participants. The Government says it is aware of some cases where UK participants lead a consortium and are responsible for distributing funding to the other participants and it is seeking to discuss with the European Commission how this situation could best be addressed in a ‘no deal’ scenario.

In any event the Government’s guarantees only extend, in relation participation as a third country, until the end of 2020. Beyond that date, the Government states that it remains committed to ongoing collaboration in research and innovation and wants to work with the EU on a mutually beneficial outcome having proposed to form a cooperative accord with the EU on science and innovation.

In relation to the actions to be taken, the Government says that UK Research & Innovation (UKRI) will be developing systems to ensure payments to beneficiaries of Horizon 2020 funding can continue and that current UK recipients of Horizon 2020 funding will soon be invited to provide initial data about project(s) on a portal hosted on the Government’s website. The purpose of the portal is to ensure that UKRI has information about projects and participants so that it can deliver on the Government’s guarantees where they apply. The portal will remain open after the UK leaves the EU so that UK applicants can continue to register as and when they are informed that their bid has been successful.

Finally, the Government has updated it’s Q and A document on UK participation in Horizon 2020 and that document can be found here.

Erasmus+

In the technical notice on this topic, the Government comments that it values international exchanges and collaboration in education and training and that the joint report on progress during phase 1 of negotiations between the UK and EU states that, following exit from the EU, the UK will continue to participate in the EU programmes (including Erasmus+) financed by the Multiannual Financial Framework (MFF) 2014-2020 until their closure. Consequently, under the terms of the Withdrawal Agreement UK organisations would remain eligible to apply for Erasmus+ projects for the duration of the current programme, and EU funding for UK participants and projects would be unaffected for the entire lifetime of projects, including those that extend beyond 2020.

In a ‘no deal’ scenario, the Government’s guarantee referred to above will cover the payment of awards to UK applicants for all successful Erasmus+ bids submitted before the UK exits the EU, even where participants are only informed of their success, or sign a grant agreement, after the UK’s withdrawal from the EU. In such cases, the Government has committed to underwrite funding for the entire lifetime of the project.

The Government goes on to say that it will need to reach agreement with the EU for UK organisations to continue participating in Erasmus+ projects and it is seeking to hold these discussions with the EU but that, if discussions with the European Commission are unsuccessful, it will engage with member states and key institutions to seek to ensure UK participants can continue with their planned activity. Where UK organisations are eligible to participate in the Erasmus+ grant programme from 29 March 2019 until the end of 2020, they will also receive funding from successful bids in a ‘no deal’ scenario.

In the interim, the October 2018 call for bids will take place as usual.

State aid

This technical notice points out that:

• the rules on state aid are set out in the Treaty of the Functioning of the European Union and associated European legislation

• the rules are enforced by the European Commission

• as long as the UK is part of the EU, state aid rules have direct effect without the need for domestic implementing legislation

• there is no specific UK legislation related to state aid regulation but it is possible to bring a claim in the UK courts to force aid givers who have not notified aid (to the European Commission) to stop giving aid until they have done so

On the face of it, therefore, exit from the EU will mean that the provisions on state aid no longer apply in the UK. However, the Government says that it strongly supports a rigorous state aid system as it believes this is good for taxpayers, consumers, and for businesses.

Therefore, if the UK were to leave the EU on 29 March 2019 with no agreement, the Government will create a UK-wide subsidy control framework to ensure the continuing control of anti-competitive subsidies and the EU state aid rules will be transposed into UK domestic legislation under the European Union (Withdrawal) Act 2018. This will apply to all sectors and will mirror existing block exemptions as allowed under the current rules.

The Competition and Markets Authority would take on the role of enforcement and supervision for the whole of the UK at that point. To achieve this end the Government intends to pass secondary legislation under the Withdrawal Act in autumn 2018 which will replicate the existing state aid framework, with only technical modifications to ensure the regime operates effectively in a domestic context. After the legislation has been passed, the Competition and Markets Authority will publish its own guidance explaining in more detail how it will operate its state aid regulatory function.

For more information on the technical notices or the potential impact of Brexit on institutions please contact us.

 

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