FAQs as a result of the UK voting to leave EU

At times like these, employee engagement takes on the greatest of significance. At Beyond Theory we have developed FAQs from a briefing that I have received from the Chartered Institute of Personnel & Development (CIPD). The CIPD is the 'go to place' for advice and best practice of people management and development.

These FAQs will help you with deal with any concerns that you or your people may have regarding the immediate impact of the vote to leave the EU and employment. 

Glossary of terms used in the FAQs:

EU: European Union. Countries in EU are Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom.

EEA: European Economic Area. The EEA includes EU countries and also Iceland, Liechtenstein and Norway. It allows them to be part of the EU’s single market. Switzerland is neither a EU nor EEA member but is part of the single market - this means Swiss nationals have the same rights to live and work in the UK as other EEA nationals.

Frequently Asked Questions (FAQs):

The biggest immediate challenge is likely to be trying to reassure your employees that any significant changes in employment rights and rights to work in the UK are highly unlikely to happen in the short-to-medium term. It will be important to communicate clearly to your employees. Stress that there will be no imminent changes and that your business will keep everyone closely informed as the negotiation over the UK’s future relationship with the EU progresses.

Any major change can create uncertainty, stress and anxiety, which means all employers should be extra mindful of their duty of care to employees and ensure that appropriate support is available for those that are worried or are struggling to cope with stress. A key part of any response needs to be very clear and consistent communication about changes happening in the business. Also managers at all levels need to be equipped with the right information and where necessary provided with guidance and support to ensure they can respond appropriately to employee concerns.

2. What will it mean for the EEA nationals that I currently employ?

There is no significant threat to the rights of EEA workers already in the UK to live and work here so you should reassure your existing EU workers that they don’t face any risk to their job security. CIPD believes that it is likely that there will be a worker registration scheme introduced in the future for EEA nationals that are already in the UK to protect their right to continue to live and work in the UK. However, it is uncertain whether people from the EEA who enter the UK between now and the UK’s formal separation from the EU will have a permanent right to live and work in the UK.

The Government is likely to tread cautiously as any move against another country’s citizens would need to be carefully thought through and managed to avoid tit-for-tat measures, for example against British citizens enjoying retirement in Spain.

Looking further ahead, EEA workers that would like to come to the UK to live and work in the future are likely to be subject to the requirements of a points-based visa system that is likely to reduce their employment opportunities. See 5. below.

3. What are the implications for employees living and working outside the UK?

The ‘leave’ vote will have little or no implication for employees living or working outside the UK in the short-term. Subject to future negotiations over the UK’s relationship with the EU, there could be restrictions on UK nationals’ ability to live and work in the EU. Any changes will not happen quickly and even then, there are likely to be transitional arrangements.

4. Will there be big changes to employment law and/or workers’ rights?

A significant body of employment law in the UK derives from the EU, and over the past decades this has affected workers’ rights across the economy. In theory the leave vote could allow the Government to amend employment law if it could gain Parliamentary approval. The reality is that the legal framework under which EU-derived employment law is transposed into UK law is complex and will not be straightforward to dismantle. The future of EU-derived employment law will depend on the political and economic relationship that the UK negotiates with the EU.

Trade agreements such as the European Free Trade Area (EFTA) or joining the EEA could require the UK to still accept the majority of EU regulations. One point to bear in mind is that the UK already has more flexibility than is sometimes realised over employment law.

5. What is likely to happen to immigration policy?

The Vote Leave campaign pledged that the new immigration system would end the automatic right of all EU citizens to come to live and work in the UK. Following negotiations over the future relationship between the UK and the EU, the CIPD believes that it is highly probable that employers will in the future no longer benefit from free movement of labour within the EEA. It is also possible that EU citizens that enter the UK between now and the formal separation will not have a permanent right to live and work in the UK. These negotiations will take time so any changes to the status quo are unlikely in the short-to-medium-term.

The Vote Leave campaign advocated the benefits of an Australian-style points-based system and so it is possible a similar system will be introduced in the UK at some point. One option is for the Government to adapt the existing points-based immigration system for non-EEA workers and extend it to cover all migrants. Under the existing arrangements, entry to work for non-EEA nationals is limited to people identified to be of value to the UK economy, such as skilled workers in "shortage occupations". Migrants with sought-after skills gain more points towards their visa. Under this system, employers have to register as sponsors and pay various costs that will include a new immigration skills surcharge from April 2017. In addition, employers are subject to a rigorous compliance regime.

The current points-based system comprises several routes. Employers are primarily concerned with the Tier 2 Visa route, through which employers recruit skilled non-EU migrants because they cannot find people with the right skills and experience from the resident labour market. Points are awarded on the basis of age, earnings, work experience and qualifications.

One option is for the Government to activate the Tier 3 Visa route for un-skilled workers, which has not been used to-date because of the strong labour supply from EEA countries, to allow employers to fill specific temporary or seasonal labour shortages.

Another option available to the Government is to adopt Australia’s General Skilled Migration (GSM) approach. This system allows prospective migrants to lodge an Expression of Interest (EOI) through the Department of Immigration and Border Protect (DIBP's) 'SkillSelect' system. Applicants must meet the following criteria:

• Be under 50 years of age at time of invitation
• Have at least 'competent' level of English
• Plan to work in an occupation from the relevant skilled occupation list
• Have obtained sufficiently positive skills assessment for their nominated occupation.

A key difference between the current UK points-based system for non-EU workers and the Australian immigration system is that in Australia you do not need sponsorship from an employer, meaning you can find a job when you arrive.

6. What does a vote to leave the EU mean for other areas of UK employment and skills policy?

Aside from employment law and immigration policy, there are no expected changes to existing employment and skills policies that will be coming into force, such as the National Living Wage and the Apprenticeship Levy.

7. Where can I find out further information?

Our Government is expected to be making useful information available for employers so checking the Government website www.Gov.uk is highly recommended.

Source: Chartered Institute of Personnel & Development