The European question: Post-Brexit employment

What will access to EU workers look like post-Brexit and what kind of systems are UK employers hoping for?

Where are we now? sang the late David Bowie several years ago. His haunting song referenced Berlin of the 1970s, divided into East and West by the imposing Wall. Today the separation at issue is not the divide between capitalism and communism but the UK’s parting from the European Union (EU).

Organisations are struggling to understand the implications Brexit will have for employment law. In an era of tremendous unpredictability many political promises have turned to dust, leaving employers to face the unsettling fact that they are building talent and broader strategies on shifting sands. Alongside ‘where are we now?’ HR directors are wrestling with the associated questions: ‘what’s likely to happen next?’ and ‘how should we prepare for various eventualities?’

Despite abundant uncertainties the future situation is beginning to take shape. It was announced on 19 March that EU migrants coming to the UK during the transition period – provisionally set to last until 31 December 2020 – would get the same rights to settle as those who arrived before Brexit. Greater clarification on other important matters should surface later this year. The Migration Advisory Committee is due to present its recommendations to the government by September, while the EU wants to see a final version of the withdrawal agreement by October.

“As a growing employer within a sector largely reliant on EU workers, it’s certainly good news for us that an agreement has been reached between the UK and the EU to guarantee the rights of EU workers already in the UK. We also welcome the fact that freedom of movement will continue throughout the transition period until at least the end of 2020,” comments Marco Galer-Reick, people director at ‘healthy’ fast-food chain Leon.

“That said, it seems that we keep kicking the immigration can down the road and are still waiting for any proposals about potential immigration rules after the transition period. Like it or not our sector and many others are relying on immigration right now, because of both skills and labour shortages, and we will not be able to overcome this overnight.”

Most agree that there are three broad potential immigration scenarios post-Brexit. These are: a relationship similar to Norway’s with the EU, where the country is a member of the single market so can trade relatively smoothly and its citizens are granted freedom of movement within member states; one similar to Canada’s relationship, with no freedom of movement but rather a visa system with a salary threshold and preference given to shortage occupations, or potentially a ‘points-based’ system; or a no-deal scenario that in theory means no freedom of movement.

Galer-Reick says his ideal outcome would be a Norway-style agreement. “Another option could be a sector-by-sector approach to control numbers, however I fear bureaucracy might get in the way of making this a practical reality, particularly for low-skilled workers. Plus there is a significant cost involved in such schemes that will need to be passed on to either the employer or the worker.”

In the absence of greater clarity on what will happen after the transition period there is one thing employers can do, and that is focus on retention. The availability of great people will continue to be a challenge for employers across sectors so it’s crucial to retain and nurture talent.

“EU workers and their families need reassurance from their employers: that’s why we launched the #LoveOurEUStaff campaign immediately after the referendum,” says Danny Mortimer, chief executive of NHS Employers. “We have also seen some fantastic examples of employer-supported peer support networks.”

Mortimer argues it’s vital to build EU workers’ confidence in the future, given the constant coverage of Brexit that tends to focus on problems in the negotiations rather than agreements reached. He says organisations must stay aware of relevant developments – including further news on the Settled Status application scheme due to launch in late 2018 – and help their EU staff do the same.

“Employers should also be alert to instances of harassment and be prepared to address cases promptly,” adds Mortimer. “Our Brexit ‘one year on’ data shows NHS Trusts are continuing to report incidents of bullying or harassment linked to racism or xenophobia.”

Mortimer is adamant that the UK cannot afford for its withdrawal from the EU to worsen the workforce challenges already faced by employers across the social care and health sectors. The worst scenario, in Mortimer’s view, would be an extension of the current immigration system for the rest of the world to include people from the EU. “This present system both caps permits and falsely conflates economic worth with higher salary, an intolerable position for our sector. We see significant numbers of much-needed medical staff unable to enter the UK because of this system,” he says.

For the health and care sectors the best-case scenario would probably be the introduction of a new immigration system to include both people from the rest of the world and EU countries, adds Mortimer. “The government would also have to take into account various models of immigration. These would likely range from the retention of free movement for EU nationals, to allowing entry to the UK with a job offer or authority to seek a job, or a work permit system allocated by sectors, or regional allocations.”

The higher education sector, like health andsocial care, is heavily dependent onforeign nationals. According to Paul Boustead, Lancaster University’s director of human resources and organisational development, of the academics teaching and researching at British universities about 55,000 (or 30%) are from outside the UK – including 32,000 from the EU. Evidence suggests modern languages, economics, politics, chemical engineering, mathematics and statistics will be subjects particularly hard-hit by a Brexit-inspired exodus of academics.

“The government’s announcements on Settled Status for individuals and family members is helpful,” says Boustead. “We need clear and decisive messaging as to what the process will be post-transition period as EU academics are turning down UK job offers. And we need the sector working constructively with the Home Office, Department for Education and Department for Business, Energy and Industrial Strategy on a longer-term immigration strategy if we are to attract and retain world-class talent in a globally competitive market.

“The UK has arguably the second-best higher education sector in the world and attracting talent from the EU as well as the rest of the world is critical to maintaining that standing. I would advocate that, rather than forming part of a points-based immigration system, overseas nationals appointed to academic posts at higher education institutions should fall into a specific category given preferential status,” he says.

This special category could, he adds, be further strengthened by the addition of a fast-track process for countries with which the UK has a close working relationship already, perhaps as part of a wider deal around science framework programmes.

The Recruitment and Employment Confederation (REC)’s Report on Jobs indicates that employers are increasingly turning to recruiters for help as candidate availability deteriorates, and recruiters say the task of filling vacancies is becoming more difficult. REC head of policy Sophie Wingfield says: “We want a future immigration policy that recognises and supports the need for staff to fill low-, medium- and high-skilled jobs in the UK. Post-Brexit Britain will need fruit pickers, waiters and warehouse workers as well as surgeons and engineers.”

Part of this, she explains, is ensuring post-Brexit immigration arrangements cater for temporary and seasonal workers. The government should not overestimate the potential for UK nationals or automation to solve problems caused by reduced access to EU labour, Wingfield concludes.

Jonathan Beech, managing director of immigration law expert Migrate UK, takes a similar stance. His favoured outcome is for EU migrants to qualify under the immigration rules, but under a heavily revised and simplified points-based system that takes into account industry-wide skills shortages. These skills shortages should be reviewed regularly: “In essence, the UK government would need to have continuous dialogue with business leaders to understand the current and future needs.”

His least-favoured scenario is continuation of the current points-based system where new EU migrants entering the UK for sponsored work purposes after the transition period need to undergo the “lottery” of the monthly quota system.

“The main determining factor in being successful under the quota is to have a recognised skills shortage or being paid a large salary. Over the last four months the quota has been oversubscribed and the qualifying earnings were pushed above £60,000 for the first time. The current work sponsorship system does not allow for workers to enter the UK unless they are taking a job at degree level. This is not realistic for a number of industries that currently have a skills shortage.”

Beech says that going forward sound HR practices will be key as it’s likely a licence of some type will be required for sponsorship of EU workers in the future. “Good practice includes accurate and timely record-keeping and reporting. It will be important to maintain the licence, so a regular audit of HR’s processes, records and reporting is essential.”