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Employment

Brexit Endgame

Tuesday, April 2, 2019

What of the future of employment legislation in the UK post Brexit?  A topic worth reminding ourselves of as we enter into the final chapter of what has been a tortuous, protracted and fraught process.

In the event of an agreed deal with the EU a pre-arranged transitional phase, (which had been 29thMarch 2019 until 31st December 2020) would be invoked resulting in:

  • The free movement of EU citizens
  • UK to be bound by EU trade terms

 At the time of writing we don’t yet know what a final Brexit deal will look like.  We do know that the EU have agreed a two-week extension of the deadline to 12th April.

With a no deal or hard Brexit, there’s no transitional period, free movement ends, and the government would need to have its immigration arrangements in place to allow EU migrants to enter the country.  If faced with this scenario businesses would need to arrange transfers across EU borders which would involve dealing with the rules of each individual member state.

Free Movement of EU Nationals

An area that could have significant impact on organisational efficiency, productivity and basic functioning are the rules governing the movement of labour across borders.

Last year’s report from the Migration Advisory Committee (MAC), commissioned by the Government, evaluated options based on the loss of rights post Brexit. In the event of such potential restrictions the recommendations were to extend the existing migrant worker “points based” evaluation.  This would give priority to skilled workers but broaden the category to medium as well as highly skilled workers.

Additional features of the MAC report.

  • A cap for permits would be removed in the general (Tier 2) category.
  • Salary threshold of £30,000 would be retained.
  • The immigration skills charge (annually £364-£1000) dependent on size of employer, would remain payable by the employer for each eligible worker. If in any doubt over this charge you can refer to the ISC fee calculator.  See link: https://isc-fee-calc.visas-immigration.service.gov.uk/start
  • Over 140 additional occupations would automatically become eligible.
  • Employers not required to advertise non-shortage occupation roles within the UK for 28 days before offering the job to a foreign worker.
  • Agricultural sector to have its own lower-skilled worker scheme.

Whilst agriculture features in the report other sectors that rely upon low skilled migrant workforces; health and care, leisure, retail and hospitality   are missing and concern is growing that they may, as a result, be adversely affected by Brexit.

If there is a negotiated withdrawal from the EU we will see a transitional period from 12th April 2019 until 31 December 2020.  In this period EU nationals will continue to have freedom of movement as they have now.

Without a negotiated withdrawal, we lose the breathing space and there’ll not be a transitional period. In the event of a “no deal Brexit” freedom of movement ends as at 12th April 2019 requiring immigration rules to be ready to enable EU citizens to re-locate for work to the UK. In such circumstances, each individual member state would need to agree their own specific rules for the intra-company transfer.

Those EU nationals who are currently working in the UK have an opportunity to apply for “settled status” which they will be able to do if they’ve lived in the country for five years by 31st December 2020.

EU nationals who don’t qualify still have an option to apply for what is called “pre-settled status”, and if they remain in the UK stay long enough to qualify for the five-year marque and “settled status”.

The key here is to keep abreast of developments and ensure your organisation is prepared as best it can for life after 12th April.

Of course, each sector and those businesses within it are different and the use of information gathered, and due diligence priorities will reflect this.

If you’ve yet to consider the implications for your business and what you will need to action in light of a no deal Brexit you may wish to consider the following: –

  • Map out the areas of your business that Brexit “touches”; examples below
    • Strategic plans – growth of the business and impact on markets
    • Trade – tariffs export/ import / border controls/ domestic
    • Customer impact – vicarious effect on revenue e.g. housing market, Inflation
    • Suppliers impact – supply chain/ impact on service/ productivity
    • Recruitment – ability to source skilled labour
    • Contracts of employment – review of existing workforce and eligibility
    • Grant funding availability/other financial considerations
  • Once the scope of your plan is agreed, drill into each highlighted area to assess and quantify the likely impact
  • Through the above process pull out “High Priority” “Important” and “Watch list” items so at to allocate the appropriate level of resource and attention to each.
  • Identify those who need to be kept informed of developments
  • Disseminate information, giving time to ensure the message is clear and unambiguous
  • With an eye to the Brexit timetable ensure that resources and the management team are ready to implement plans in accord with known events and in line with the overall strategic plan of the business.
  • Despite the best laid plans, you cannot predict with certainty how Brexit will impact your business. It would therefore be prudent to adopt a system of check and balances on newly implemented measures should be engaged to ensure they are effective and to allow for adaptation or rethink if they are found to be failing.

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