08 July 2016

Brexit and business immigration: what is likely to happen

The recent results of the EU Referendum have brought a lot of uncertainty in many areas.

One of the biggest concerns and most talked-about areas relates to immigration, and specifically in relation to EU workers currently working in the UK. Whilst MPs from all political parties have recently united to demand that EU citizens currently living in the UK have the right to remain, there is no guarantee of this and much will depend on negotiations with the EU over the next few months.

According to the Financial Times, there are 2.1m EU nationals currently working in the UK, accounting for 6.8% of the workforce. As a result of Brexit, it is likely (although there are other suggested routes) that the UK will come completely out of the EU, and whilst borders will not necessarily be closed, the free movement of EU workers into the UK will be restricted. It is envisaged that newcomers will have to apply for the right to work in the UK via a points system, similar to the one currently in place for non-EU nationals.

What does this mean for UK employers and for individuals wishing to work/continue to work in the UK?

There are 3 categories of workers to consider:

  • EU employees who have been living and working in the UK for 5 years or more:  these individuals will be able to apply for the right to remain in the UK and for permanent residency.

  • EU employees who have been living and working in the UK less than 5 years: whilst the situation is more uncertain, it appears from recent political statements that those who are already living and working in the UK will be allowed to stay. Moreover, it will be at least two years before Britain’s formal departure date from the EU, adding to the length of time those employees will have been in the country.

  • EU nationals wanting to work in the UK after the official leaving date: stricter immigration controls will be put into place; it is possible that EU nationals will be treated similarly to non-EU nationals and will be subjected to the same point-based system currently in force in the UK. Employers may also be required to apply for a sponsor licence from UK Visas and Immigration (UKVI) if they wish to employ skilled EU workers after the leaving date. Again, there is uncertainty over this; however it seems likely that this will be required.

What should an employer do?

In spite of the uncertainly, there are several action points that an employer should consider making to ensure its position is protected:

  • Assess what proportion of your workforce comes from the EU, and what skills those workers have. Could you find alternative personnel in the UK, should those workers not be allowed to remain in the UK, and are there any financial implications associated with this?

  • Could you apply for a sponsor licence ahead of the UK’s formal departure date from the EU? Bear in mind that there is likely to be an increase in applications for a sponsor licence following the UK’s departure date, which will, no doubt, lengthen the time it will take for UKVI to process applications.

  • Employers should also consider meeting with EU workers individually to discuss the position regarding their right to live and work in the UK and to indicate that, whilst there are no guarantees, it is likely that they will be allowed to stay in the UK as a matter of Government policy. Otherwise, employers may find that their EU workers are making other arrangements to leave the UK or are working unproductively due to the uncertainty surrounding their future.

  • This is particularly important with senior employees / executives as companies will, no doubt, want to retain their key staff.

Are there any other issues to take into consideration?

From a business point of view, a tightening of immigration borders might potentially restrict employers’ choice in terms of recruitment. The costs involved in applying for a sponsor licence and/or a visa might dissuade many workers from coming to work in the UK, thus further restricting the pool of available workers. It may also affect the number of EU students coming to study in the UK, which will again mean less choice in terms of graduate recruitment.

Following the UK’s exit from the EU, it is likely that businesses will come under greater scrutiny from UKVI. Employers should therefore carry out full audits across their entire workforce to check that each employee has the right to work in the UK and has provided the correct documentation to support this. It is extremely important to ensure that you are compliant with immigration regulations, as it is unlawful to employ an individual who does not have the appropriate right to live and work in the UK. Any company who falls foul of this is likely to face a large fine and/or imprisonment.

Further information

For any further information, and if you want to discuss how Brexit could affect your business in terms of employment, please contact Alan Kennedy on 0113 297 7718 or at akennedy@shulmans.co.uk.