Posted 15 March 2016
Many established UK industries rely heavily on migrant workers to support the economy. The upcoming European Union referendum (dubbed Brexit) will have a big impact on immigration law, which will directly affect UK businesses and their HR policies. Here are 5 potential ways:
1) Increased pressure on recruitment
One likely change is the requirement for EU citizens to obtain a visa to work in the UK on the same basis as a non-EU citizen. Temporary, fixed-term visas for existing migrant workers provide a grace period, but mass emigration is likely to follow. This places great pressure on recruiters to fill the gap with new talent, and on HR teams to handle complex shifting workforces. High-skilled workers are likely to benefit, while low-skilled workers are more likely to see widespread job losses. Sponsoring work visas also adds an additional cost to businesses.
2) Slower growth through reduced trade
Without access to the EU’s Single Market and European Economic Area (EEA), UK businesses will face difficulties in trade. Workers in the Financial Sector would lose the right to ‘passport’ services through EU member states, which protects the freedom to establish branches in other countries and provide cross-border services. There are also concerns that the EU may impose economic sanctions, either punitively or to prevent the UK from competing with EU states in some markets.
3) Stricter right to work policies
Changes to the legal framework surrounding work eligibility policies would need to be rethought so as not to become irrelevant or inappropriate. Stricter policies regarding the right to work means more background checks and a more pressing need for a secure and reliable way to manage right to work documents. Ensuring documentation around eligibility is kept in a secure, backed-up database on an HR system would considerably simplify this demand.
4) More relaxed policies regarding working hours
Many businesses would welcome the repeal of the EU’s Working Time Directive, which specifies maximum 48-hour working weeks. A Brexit would also give the UK more freedom in calculating statutory holiday pay: commission and overtime, for example, could be excluded from holiday pay calculations. Online holiday and absence management software helps HR teams make calculations like these much easier. Changes to anti-discrimination laws and restrictions on maternity/paternity leave may also be on the horizon, as both are protected by the Equality Act 2010 and other EU legislation.
5) Direct benefits to the UK working population
On the plus side, we would see more jobs for UK residents as the overall talent pool reduces relative to the size of required workforce. Greater demand for UK talent could also lead to an increase in wages, and UK citizens might also enjoy greater access to public services due to increased availability.
Employment law hasn’t been one of the government’s priorities in negotiation, and the likelihood of a trade agreement means it’s improbable that the UK will gain complete freedom to rework employment law. It’s possible that a ‘yes’ to Brexit could leave us within the scope of the EEA and EU employment law. Even if the legislation doesn’t see massive upheaval, however, the direct social and economic effects of an exit from the EU would have an enormous impact on UK employers and the HR teams who manage their workforces.
Make sure your business is 'Brexit-proof' by managing your employees and right to work policies in one integrated HR system.