EU workers – the challenge for UK employers

24 January 2017

Towards the end of last year one of our engineering clients told me that he was having difficulty in fulfilling his customers’ orders due to a shortage of skilled welders and machinists, in spite of running an apprentice scheme. In December the problem was solved by the recruitment of two Polish immigrants who had the appropriate skills and were highly motivated.

Those who voted for the UK to leave the EU will expect immigration, especially from Eastern Europe, to be stemmed. So how will employers who are heavily dependent on the EU for their workforce be affected? There are about 2.2 million EU nationals living and working in the UK. This amounts to 6% of our working population. In the manufacturing industry the proportion is 10% and in retail, hotels and restaurants it is 8%.

We have recently had confirmation that this country will leave the Single Market, so the freedom of movement of people will end, probably within two years of the declaration under Article 50. Those businesses who rely on labour from the EU therefore have about two years to consider their recruitment and employment strategies.

Unless a special agreement is reached we can assume that after our departure from the Single Market those coming to work here will all be subject to the rules that apply to job-seekers from the rest of the world.

This is the points-based system, which enables employers to sponsor individuals to work for them in the UK. The system replaces the previous work permit and entry regime and is administered by UK Visas and Immigration. There are five tiers, each one consisting of a list of points which are allocated for specific attributes, mostly related to age, experience, qualifications and language skill. There is an emphasis on taking in skilled as opposed to unskilled migrants, so that currently non-EU immigration effectively excludes all except graduate-level jobs. This might be reassuring for employers involved in scientific and medical research, for example, but is less easy for such sectors as retail, hospitality, care and vegetable-growing.

Government pressure on employers who recruit illegal workers has increased since the introduction of the Immigration Act 2016. Penalties now include up to five years in prison for employers and six months or an unlimited fine for the illegal employees.

At this stage it is impossible to predict the outcome of the UK’s negotiations with the EU, although assurances have been given that EU citizens currently working in the UK will be able to retain their status. Their status is in any case guaranteed by EU law until such time as the UK formally leaves. In the meantime there is a range of possibilities, including on the one hand that there could be a rush of EU immigrants seeking to get in before the door closes, and on the other that many EU workers will return home as a result of uncertainty or even public hostility.

For the time being, however, EU workers who have been in the UK for more than five years are entitled to apply for permanent residence, and those who have been here for at least six years can apply for British citizenship. Those who have been here for less than five years have the right to apply for a Registration Certificate as evidence of their entitlement to live in this country. If you employ EU citizens it would be good to advise them of this.

Other actions you should take are:

  • Ensure that your business plan factors in the costs of not being able to recruit EU workers – these might include increasing your investment in training or improving automation to reduce the reliance on people; and
  • Ensure that all your current employees have a right to work in the UK, and that you have procedures in place to identify illegal workers at the recruitment stage.

If you have any issues related to the employment of foreign nationals, or indeed any other employment law problems, you should contact me or your usual UHY adviser who will, where necessary, signpost you to a relevant expert.