What Brexit means for HR
Tue, January 10, 2017
Author: Guest Blog – Chris Tutton at Constantine Law
The free movement of people is one of the key battlegrounds in the negotiations over Britain’s exit from the EU.
EU leaders have been uncompromising on free movement; if the UK wants to stay in the single market, it must accept the free movement of people. From a UK perspective, however, winning controls on EU immigration seems to be a political necessity.
Given these diametrically opposed positions, the UK is almost certainly going to have to come out of the single market (a so-called “Hard Brexit”) in order to curb EU migration. Following Theresa May’s speech on 17 January, this has now been confirmed as the government ‘s intention. Many employers are now asking their HR function to plan for the impact of a Hard Brexit on staffing.
The primary impact of a Hard Brexit for HR, will not be changes to UK employment law. Any changes to legislation are likely to take place over many years and to be fairly limited, relatively speaking. Of much greater significance is how courts and tribunals will interpret our legislation, once we cease to be bound by the European Court of Justice. Much of our existing employment legislation has been interpreted heavily in light of European decisions, often in a very employee-friendly way. Once we come out of Europe, those past decisions may be open to challenge, and new case law will develop to reflect a UK-only interpretation of our legislation.
Leaving aside the changes to legislation and case law however, the greatest challenge for HR is likely to be how employers still access and attract foreign talent when we lose access to workers in the EU bloc.
Many businesses are heavily reliant on EU talent. A survey of just over 320 businesses conducted by Macmillan Davies, showed that EU nationals (not including UK staff) comprised more than 20% of the overall workforce of respondents. In some cases it is much higher. Curbs on EU immigration are likely to place huge pressure on industries as diverse as construction and leisure to tech and financial services. I expect the UK skills shortage will become more acute as a result of Brexit.
Currently, the government does not favour a points-based-system, despite this being championed by Leave supporters during the referendum campaign. Instead, it looks likely that a work permit system will be implemented. Given that the position on free movement of people is so intricately bound up with the wider terms of any Brexit however, it will be many years before businesses have any clarity on the future immigration status of their EU workers.
Theresa May confirmed in her speech on 17 January that once the government exercises Article 50, it intends to quickly seek agreement in relation to the status of EU migrants already in the UK, in return for guarantees about UK citizens working in the EU. How quickly the UK will be able to do so, however, remains unclear, particularly given that the timetable for exercising Article 50 has been thrown into doubt as a result of the Supreme Court’s decision on 24 January.
In the meantime, to reduce the chances of losing a proportion of EU workers, HR teams are encouraging EU staff to formalise their immigration status. This can mean staff obtaining a registration certificate, or applying for permanent residence or citizenship if they have been in the UK for 5 years. There are however, a number of pitfalls for the unwary in calculating this 5 year period so advice should be taken. These include, for example, the requirement that any time spent as a student will only qualify if the individual had comprehensive medical insurance in place. Many employers are taking an active role in educating and informing staff about their immigration rights and offering training, workshops or access to independent advice.
The Macmillan Davies survey found that 29% of employers were concerned that EU staff working in the UK would be reluctant to undertake international assignments. This reflects the fact that undertaking a 6 month posting abroad could reset an EU migrant’s period of continuous residence in the UK and effectively prevent them from obtaining indefinite leave to remain in the UK. However, it is critical that HR are aware of this, as it would be disastrous for employee relations if EU staff lost their right to remain in the UK following an international posting.
The survey also showed that 26% of businesses were concerned that they would no longer be able to attract top talent from abroad as a result of a Brexit. According to Macmillan Davies’ Managing Director, Angela Franks, this concern is unsurprising. In Franks’ view “many EU nationals working in the UK are highly mobile and the uncertainty around free movement of people could make the UK a less attractive option”.
In summary, HR has a key role to play in reassuring EU staff through the uncertain negotiations ahead, and planning how to retain staff and avoid the negative impact of an acute skills shortage.
