Preparing for Brexit – what you need to be doing

Vikki Wiberg, senior counsel in the employment, pensions & mobility group at Taylor Wessing, on making plans for changes to immigration.

Vikki Wiberg

The end of March saw a step forward in the Brexit process following the triggering by Theresa May of Article 50 on 29 March, and the publication of the government’s White Paper on 30 March.

Whilst neither alters the continuing right of European Economic Area (EEA) nationals to live and work in the UK, the European right to free movement for those here, and those who may come to the UK in the future, will be a key area of negotiation over the next two years. Whilst any changes will impact EEA nationals directly, they will also affect construction businesses that rely on EU workers for some of their labour.

Depending on the outcome, the negotiations threaten to restrict access to the pool of European workers on whom the construction industry is highly reliant.

Recent ONS data shows that low-skilled sectors which traditionally recruit workers from the EU are already struggling to recruit with vacancy levels being particularly high. This may be directly linked to data showing a significant decrease in net migration from Europe – 12,000 more EU nationals from the 8 main EU countries left the UK in the year to September 2016 and arrivals almost halved from a quarterly average of 60,000+ (September 2015-June 2016) to 30,000 (June-September 2016).

This uncertainty sits alongside home secretary Amber Rudd’s ongoing commitment to reduce net migration to sustainable levels. Measures have included an ill-advised and quickly retracted proposal that companies keep a disclosable list of non-EEA workers, reducing the number of visas issued to non-EU students, tightening advertising rules to address gaps in the sponsored skilled labour market to prevent migrants “taking jobs British people could do”, and the introduction of a £140m fund to ease pressure on public services in high migration areas.

Businesses are also contending with tougher illegal working penalties under the Immigration Act 2016, increasing civil penalties (c£14m from April to June 2016), and from 6 April 2017 a new annual tier two £1,000 skills levy per sponsored worker.

In this environment what should construction firms, as an acknowledged vulnerable industry for illegal workers, which is reliant on EEA national labour, be doing?

1. Engage with the Home Office

The Home Office is actively working with companies to target factors which are often behind illegal working – money laundering and people trafficking. Reaching out to your Home Office sector contact and establishing a good relationship with them can provide support and access to training and resources.

2. Audit your workforce

Construction firms often have a highly transient workforce which makes managing right to work (RTW) checks challenging. RTW checks must be completed pre-employment for all employees regardless of nationality and refreshed, where appropriate, before visa expiry.

This provides a statutory defence criminal sanctions and a possible £20,000 civil penalty per illegal worker. Regularly auditing workforce files identifies issues in advance.

3. Refresh RTW training and support

Forged identity documents, particularly EEA identity cards, are increasingly sophisticated. It is important to ensure that those responsible for carrying out checks have up-to-date knowledge and anti-forgery training. 

4. Immigration champion

If your workforce operates from a number of sites you could appoint a central “immigration champion” with specialist knowledge to oversee RTW.

5. Consider recruitment and training

Alongside fewer EEA nationals entering the UK, studies have shown that many EEA workers in the UK, particularly in low skilled roles, would not meet new skilled visa conditions introduced by the government.

Now is the time to consider your training offering to plug existing skills gaps and future needs. Can you use the next two years to train up more local workers? Could you, for example, offer additional apprenticeships under the Apprenticeship Levy scheme in place from April 2017?

6. Build in costs of Brexit related workforce changes to your contracts

Any requirement for EEA nationals to obtain UK visas to work is likely to impact on project costs. If you are negotiating future contracts do consider building in flexibility to take cost rises into account.

Guidance to businesses published alongside the White Paper to the Great Repeal Bill on 30 March notes that the way in which UK businesses will be able to employ EEA nationals following Brexit is a matter for discussion in negotiations. It states that although Theresa May has been clear that securing the future status of EEA nationals currently in the UK and UK nationals currently in the EEA is a priority, it is not clear how this will play out. “Constructing solid workforce foundations” now will help you shore up protection against future immigration changes.