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Employers urged to start considering Brexit implications immediately

Employers are being advised to assess the full impact of Brexit on their workforce and future skills planning, as experts begin to ponder the fallout from the decision to leave the European Union, and 3.3 million non-British EU citizens living in the UK face personal uncertainty over their jobs and future in Britain

“The impact of a ‘leave’ vote is much bigger than simply changing the political landscape of the UK,” said Peter Cheese, chief executive of the CIPD. “It stands to have a significant impact on the world of work and future planning within organisations.”

The CIPD considers it likely that EU citizens currently working in the UK will retain their right to stay in the country, potentially through a worker registration scheme, but it is unclear how this will work in practice or whether any rights would be extended to those who enter the UK after this point.

But others said there was little certainty over how EU workers would be treated. Jules Quinn, a partner at law firm King & Spalding, said HR professionals ought to begin assessing the impact on their workforces right away: “Companies should be undertaking an employment audit of current staffing in the UK and the EU to plan for the new systems and reduce potential risks.” These include the possibility of employees having to apply for a work permit if there is a repeal of the current EU immigration rules, she added.

While the full implications of the decision to leave the EU won’t become clear for some time, Jonathan Beech, managing director of legal firm Migrate UK, said: “Thousands of EU migrants, currently in UK company roles, will potentially have to exit in the future if they fail to qualify under the current points-based system that we use for workers outside the EU.”

A proposed points-based immigration system –  which could be implemented once the UK withdraws from EU treaties governing immigration – is geared towards attracting skilled migrants. Michael Leftley, head of employment at law firm Addleshaw Goddard, said it would essentially put EU and non-EU workers on the same footing in future, which would prove costly to businesses.

“Globalisation is about to get much more expensive and complex, whatever the negotiations we go through in the upcoming months and years,” he said. “But I’d be very surprised if anything changes for those EU workers who have been here for a number of years. They will most likely be ‘grandfathered’, either by being able to apply for British citizenship or be granted an indefinite leave of stay, thus allowing them to continue to live and work in the UK.”

Mark Quinn, head of Mercer’s talent business in the UK, said: “It’s likely that restrictions will be placed on EU workers within the UK workforce so companies should review their workforce plans… particularly retail, leisure and services employers that employ a large number of EU citizens.

“New bilateral agreements may be required for those organisations offshoring from the UK into the EU, and we will also have to wait and see if non-UK multinationals will think it still appropriate to have their European headquarters remain in London.”

While debates in the run-up to the vote warned of skills crises for the hospitality and agricultural industries, which rely on the EU’s free movement of workers to bolster their workforces, Leftley said banking and financial services would suffer in the long term.

“If you look at the make-up of the financial services industry, particularly in London, which is one of the financial capitals of the world, it relies on a very diverse workforce – heavily reliant on EU nationals and skills,” he said. “Big American banks like Goldman Sachs and Morgan Stanley view London as a stepping stone into Europe and we’ve already heard that JPMorgan has warned staff of possible restructures and role relocations to other European cities.”

Organisations still face great uncertainty until the UK’s ‘exit strategy’ is defined and trade negotiations with the EU are completed, and some campaigners have called for a halt to some legislation currently making its way through parliament until the UK’s future becomes clearer. However, Mark Dawe, chief executive of the Association of Employment and Learning Providers, said delaying the April 2017 start for the apprenticeship levy was not an option.

“If anything, the referendum result means that a skilled British workforce will be needed more than ever, so the target of three million apprenticeship starts by 2020 takes on a new significance,” he said.

“All sectors, especially construction, hospitality and care, are and will be heavily dependent on having good-quality training in place, so it is vital that government investment in skills programmes is maintained and backed by the levy.”

Cheese praised the UK’s labour market for its flexibility and urged the government to consider this in any renegotiations. “The UK’s flexible labour market already strikes the right balance between providing flexibility for employers and employment rights for workers,” he said.

“Our flexible labour market enables employers to access or bring in skilled and unskilled workers from outside the UK to help support business growth and address labour shortages in our public services. It is important that this is not forgotten in any reform of the immigration system.”

Added: 28-06-2016

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