Brexit update - economic and social impacts

Brexit update - economic and social impacts

The Migration Advisory Committee (‘MAC’), the independent non-departmental public body that advises the Government on migration issues, will be reporting on the economic and social impacts of Brexit in September 2018. 

Employers will be monitoring the outcome carefully since the decisions that are subsequently made by Government will directly affect their businesses and the pool of talent from which they can recruit.  We look at whether there is anything UK employers can do now to protect their ability to retain and recruit key talent.  

Continued uncertainty

It is still unclear what UK immigration regime employers will face post-Brexit.  However, we can discern some of the Government’s thinking from a variety of sources.   For example, Theresa May’s offer to the EU back in June 2017 talks about EU nationals and their family members who have been resident for 5 years applying for ‘settled status’, a new form of indefinite leave.  Those who have not yet been resident for 5 years would be able to apply for continued residence to stay until they’re in a position to apply for settled status. However, those arriving after the ‘specified date’ (which is not specified) would be given a grace period to remain for a further 2 years to allow them to either apply under another category of UK immigration law or return to their home country.

We then had the draft immigration paper that was leaked to The Guardian in September, which favours an immediate end to the current free movement provisions, and provides for a regime that would deter all but highly skilled EU migrants from coming to the UK by introducing minimum skill levels and salary thresholds.  After an envisaged 2 year ‘implementation period’ following Brexit, EU nationals would then be subject to the full spectrum of UK immigration laws.

Theresa May’s subsequent speech in Florence in September 2017 talked about a period of implementation ‘of around 2 years’ during which the status quo is maintained and free movement continues.  However, new arrivals from 29 March 2019 would be subject to mandatory registration.

Via a Facebook post in mid-October 2017, Theresa May sought to reassure EU citizens living in the UK that those who already had Permanent Residence would be able to ‘swap’ this for settled status in a process that would be as streamlined as possible.

How will employers continue to attract and retain talent in the UK?

  • Current workforce

For those employers with an EEA workforce, being in a position to be able to continue employing their EEA nationals (or family members) after the UK has left the EU is clearly a concern.  Employers should encourage their EEA national workers and their family members who have already been in the UK for 5 years to consider applying now for Permanent Residence.   Despite the Government exhorting EEA nationals not to bother with this process, it is still worth individuals obtaining Permanent Residence since many may be in a position to apply for naturalisation as a British citizen after having obtained the Permanent Residence documentation.  Secondly, simply obtaining the Permanent Residence documentation should at least make any ‘settled status’ application more streamlined in the future.

For those EEA national workers who have not yet spent 5 years in the UK, it is recommended they and their family members seek advice to ensure that they are in the best position possible to be able to remain here post-Brexit.

  • Future recruitment

Employers will also be anxious to ensure that they will be able to continue recruiting the talent and skills they need post-Brexit.  Will an EU national recruited in early 2018 have the right to work in the UK by the time they are due to start their employment?  This is particularly difficult for employers since they also need to ensure they are not discriminating against applicants on the basis of their nationality.

It is advisable for UK employers to ensure that any employment contract makes the UK employment conditional upon the individual being able to provide evidence of their right to work in the UK at any stage during their employment.

If, post-Brexit, EEA nationals no longer enjoy free movement rights and there is no specific provision for them (such as allowing those with definite job offers to enter for work) UK employers would then need to sponsor them under Tier 2 of the Points-Based system. 

UK companies must first obtain a Tier 2 sponsor licence from the Home Office to sponsor an individual in a skilled role.  If not already in place, obtaining a sponsor licence is something for UK companies to start considering to ensure they continue to be in a position to recruit key talent in the future.

Overall comment

There are practical steps, as outlined above, that employers can take now to help protect their current EEA workforce.  It is also worth employers considering what they can do now to protect their ability to attract and recruit key talent going forwards, particularly if the UK is faced with a hard Brexit.

As the debate over the future of EEA migration continues, UK employers need to be ready to react and adapt to any future immigration regime.

Contact our experts for further advice

View profile for Jackie PenlingtonJackie Penlington

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