Our Blog

Brexit

Published: 24 June 2016
Area of Law: Employment

We know the outcome – the UK has chosen to leave the EU

Today for employers and individuals nothing changes and the rules stay the same.  However, as the process begins, employers and employees will be wondering what will change and, more importantly, what needs to be protected.

Any new trading arrangement between the UK and the EU could be conditional upon some existing employment legislation remaining in place, particularly in the short term.  Furthermore, if the UK is required to give any period of notice to the EU prior to exit, the status quo will surely have to remain until that notice period ends.

There has been a great deal of frustration, primarily from employers, over some of the more controversial decisions coming out of Europe, such as the decision that non-guaranteed overtime be included in the calculation of holiday pay, and the agency worker regulations, which are likely to be repealed in a post Brexit world. However, it cannot be ignored that the EU’s influence has improved work conditions for the better, e.g. controlling working hours, breaks, holidays etc.  Therefore, it is unlikely that anything will change significantly; otherwise this could lead to increased and high profile employee relations issues.  

The subject of business immigration is complex.  A primary issue being how to legislate to secure the UK’s borders and to cease positively discriminating against EU citizens, in order to comply with the requirement for free movement of labour between EU member states.  This requires a complete overhaul of the system, particularly in relation to evidencing the immigration status of all EU citizens coming to work in the UK.

This could make it a less attractive base for highly skilled migrant workers. In addition, there could be difficulties filling the skills gap that is currently filled by EU workers, so a balance must be struck.  Organisations will also need to ensure they are investing in their own UK based talent and grow organically.  Alternatively, they could seek to recruit more highly skilled migrants from outside the UK if the current Points Based System is extended to cover EU citizens. This could arguably lead to higher skilled migration.

The greatest impact however, is likely to be seen in the low skilled labour market, which has boomed over the last few years with low skilled EU workers willing to fill roles that UK workers do not want to fill.  A shortage of low skilled workers should force organisations to recruit for those roles in the UK, thus increasing wages, which should help kick start the economy.  That said, this could lead to higher prices for the consumer and more cases of illegal working, as those unscrupulous organisations seek to continue to recruit cheap labour and undercut the UK labour market, which could lead to increased modern slavery issues.

As I said at the beginning it’s complex, and whoever negotiates the deal needs to strike the right balance.  We’re just at the beginning.

For more of our thoughts around Brexit read here.

"This is exactly why we like to work with people who understand the industry and can identify potential issues and create solutions."

Jon Saltinstall, Senior HealthCare Banking Consultant, Lloyds Bank