UK: What Might Brexit Mean for Employment Law and Access to Skills?

By Jane Fielding © Gowling WLG September 14, 2018
UK: What Might Brexit Mean for Employment Law and Access to Skills?

Continued access to a pool of people with the right skills and experience is the single biggest HR concern for U.K. businesses preparing for Brexit. Employers are also concerned to know the impact of Brexit on the employment law regime in the U.K. Will they have more or less flexibility in managing people or will things stay the same as now?

This guide will help you understand what has and hasn't been decided on immigration and what the government's current position is on U.K. employment law. It also provides practical tips for what you can be doing now to prepare for the impact of Brexit on your current and future workforce.

Employment Law—Business as Usual?

Immediately after the referendum, David Davies, the then Brexit secretary, made it clear that he was not intending to cut the rights of working people in the U.K. The prime minister later announced that Brexit would not mean repealing workplace protections originating from EU law and consistent with that, there is no carve-out for employment law in the European Union (Withdrawal) Act 2018.

However, if the U.K. ends up in a no deal situation, the government may need to review that position, faced with having to compete globally as an individual country. There is no hint of that yet from the government, even in its white paper on the future relationship between the U.K. and the European Union published in July.

The white paper has many references to the government's aim of "protecting jobs and livelihoods." It deals at a high level with social and employment issues, stating the U.K.'s "belief in the importance of strong labor protections" while embracing opportunities arising from the changing world of work. It says existing workers' rights under EU law will continue to be available on the day the U.K. leaves the EU and that it proposes that the U.K. and the EU commit to the "nonregression" of labor standards and continuing to uphold International Labour Organisation commitments.

There will need to be some consequential changes to U.K. employment legislation to remove references to the EU where these no longer make sense and the current European Work Councils regime will need a reciprocal agreement in place for the U.K. and the EU if it is to continue in its current form. Otherwise, the government's current position is that it is business as usual from an employment law perspective.

This is consistent to some extent with the fact that many of the most valuable protections for employees in the U.K. do not derive from EU law anyway: unfair dismissal, whistleblowing and individual redundancy protections are all domestic. In some cases, the U.K. had what are now EU laws before they were introduced at EU level (e.g., race discrimination) and/or have voluntarily gone beyond what EU law required (e.g. expressly including outsourcing and insourcing situations within the scope of Transfer of Undertakings (Protection of Employment) or TUPE).

There are therefore areas where if the government wanted to in the future, it could row back the current level of protection regardless of Brexit. It seems unlikely that what are now established employment rights would be removed at any stage. For example, anti-discrimination laws are so entrenched in people's expectations of the workplace, that it is almost inconceivable they would be withdrawn. However, it may be that a future government would seek to reimpose the cap on damages for discrimination that was introduced by the EU and some commentators say leads to spurious claims. The Agency Workers Regulations introduced following EU legislation, have also created difficulties for some employers who would welcome their repeal, or at least reform, after Brexit.

If you are part of a European Works Council arrangement, you should be reviewing this for whether any changes are needed post-Brexit.

  • Look out for updates on whether there is any change in the government's position of leaving things as they are.
  • If there are aspects of U.K. employment law that you believe damage your business, there is potentially a new opportunity post-Brexit to lobby government for those aspects to be changed.

Retaining Your Existing EU Workforce

Until Dec. 31, 2020, U.K. and other EU citizens will be able to move, live and work on the same basis as now. If EU citizens already reside in the U.K. on Dec. 31, 2020, and want to stay and work in the U.K. after that date, they will need to register under the government's Settled Status Scheme. The Scheme is being rolled out to some priority areas first (not automotive) but the government plans for it to be fully open by the end of March 2019.

An application under the Scheme must be made by June 30, 2021. It is not clear currently what the fee will be to apply, but it seems likely that there will be some charge.

The Scheme covers two groups of people and in summary has the following effect:

  • Those EU citizens, and their family members regardless of nationality, who have been resident for five years in the U.K. on Dec. 31, 2020, will be entitled to apply for Settled Status. This means they will continue to live and work in the U.K., be entitled to benefit from public services and, if eligible, apply for British citizenship.
  • Those EU citizens, and their family members regardless of nationality, who have been resident in the U.K. on Dec. 31, 2020, for less than five years will be entitled to apply for Pre-Settled Status—they will be allowed to stay to accrue the five years' residence needed for Settled Status.

Further details about the Scheme are in this briefing pack issued by the government earlier this summer.

Practical Steps to Take Now

You cannot insist on an individual employee telling you whether he or she plans to apply for Settled Status. However, to help with workforce planning you can take the following steps:

  • If you have not done one already, do an audit of your workforce to see how it would be affected if material numbers of EU employees left rather than apply for Settled Status. What skills would you be losing; how easy would they be to replace; and at what cost?
  • Register for the alerts from the government on the Settled Status Scheme so that when the Scheme is open to all, you can let your staff know so that they can submit their applications in good time.
  • Consider offering loans to staff eligible for British citizenship to apply for it now.
  • Encourage your EU workforce to stay with you by making clear that they are valued members of staff and make sure you put this into practice by dealing effectively with any harassment or bullying between staff members due to disputes over immigration.

Access to Skills—Contingency Planning Needed

After Brexit, the government will have control over immigration from the EU in the same way as it has currently over immigration from non-EU countries. Apart from the Settled Status Scheme, what the immigration regime will look like post-Brexit is currently unclear. The government has said in its white paper that it intends to design a system that works for all parts of the U.K.

We are currently awaiting a report from the Migration Advisory Committee (MAC), the independent public body that advises the government on migration issues. The report will provide information about patterns of EU migration within the U.K. and the role of migration in the U.K. economy. Using that data, the government will then set out details of its wider immigration policy.

Its stated aim is to continue to attract the "brightest and best" from the rest of the world to support and enhance the U.K.'s attractiveness for research, development and innovation. It recognizes that part of this will be to aim for continued mutual recognition of professional qualifications gained in the U.K. and EU. This would allow EU professionals to practice in the U.K. without the need to spend time and money retraining or re-qualifying. In the last 30 years, there have been around 142,000 EU qualifications recognized in the U.K., including engineers who are vital to the automotive sector.

Practical Steps to Prepare for Brexit

The U.K. already has a skills gap (in industries such as construction, IT and engineering) as numerous industries are struggling to find suitably qualified individuals that have the requisite skills to meet the current demands.

Here are some practical ideas to address the skills gap, which may be exacerbated by Brexit:

  • Apprenticeships—These are already an established part of the workforce in many automotive businesses but it's worth reviewing whether more could be done to take advantage of the apprenticeship levy scheme.
  • One-million shades of grey—Adopt Aviva's U.K. boss Andy Briggs's plea for one-million shades of grey. His pitch is simple: if Britain hires an extra 1 million staff aged between 50 and 69 in the next five years, gross domestic product could be boosted by an extra £88 billion or $115 billion.
  • Invest more in existing staff to improve retention—This could be by way of investing in training; more attractive benefits packages; improved people management skills and well-being to improve productivity; reviewing retirement practices; and retention of maternity returners to retain qualified staff. This could result in an employer being the employer of choice for its target recruits.
  • Artificial intelligence (AI) and automation—In the short term you may need the very people it is harder to find to develop the AI systems that can help you reduce the need for as many people in the medium to long term. This may be a longer-term solution, but as the automotive sector generally is investing heavily in AI, it is better-placed than many to find targeted AI solutions to complement skills gaps.
  • Immigration opportunities—Keep up to date with the government's wider immigration strategy once published so you can focus on the most likely routes to bring people into the U.K. with the skills you need. For example, visas for highly skilled workers will still likely be part of the immigration regime consistent with the aim of bringing in the brightest and best.

Jane Fielding is an attorney with Gowling WLG in Birmingham, U.K. © 2018 Gowling WLG. All rights reserved. Reposted with permission of Lexology.


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