No Deal Brexit threatens manufacturers’ employment plans

Member News

A No Deal Brexit will leave manufacturers’ employment plans in disarray, a top employment lawyer has warned.

Julia Fitzsimmons is Employment Partner at law firm and Made in the Midlands Patron, FBC Manby Bowdler.

Here she offers her insight on some of the key employment issues facing manufacturers in the run up to the UK’s exit from the EU.

She began by saying that according to the Government White Paper published in July, Brexit will see no repeal of the EU employment laws.

This means legislation such as TUPE, Working Time Regulations, collective consultation requirements and much of the current discrimination legislation are here to stay, at least the foreseeable future.

Julia said this may not be the situation many manufacturers would have preferred but it did mean they were unlikely to face a myriad of new employment laws once the divorce from the EU was confirmed.

For businesses using migrant workers, Brexit has also meant consideration of EEA (European Economic Area) workers in the labour market.

“The manufacturing sector, in particular, has warned that the uncertainty over the Brexit process and what immigration rules might come into place once the UK is no longer a part of the single market, has already started to have an impact,” said Julia.

She said figures from earlier this year suggested that 17 per cent of manufacturers had already seen a fall in the number of applications from European citizens due to Brexit, with a further 13 per cent of firms in the sector seeing a migration of their European workers since the referendum.

The situation has raised concerns that skills levels within the industry will be diminished as a result of Brexit and that firms are worried about how they will sustained a skilled workforce.

Against this backdrop, she said the Migration Advisory Committee published its interim proposals looking at numerical limits on visas, minimum salary threshold for lower skilled roles and giving preferential treatment to those aged between 18 and 30.

The committee found that in the food and drink manufacturing sector, around a quarter of the workforce came from EEA migrants, whilst this fell to nine per cent across other manufacturers.

“The reasons for employing migrant labour given to the committee were largely unsurprising. Most employers did so because the applicant was the best or, sometimes, the only available candidate,” said Julia.

The committee is due to report its final conclusions on how EEA migrants will be treated in September – and the Government is saying nothing about what its final position on migrant labour from the EEA will be post-Brexit.

However, she said there still steps manufacturers could take to reassure their EEA workers ahead of next April.

“Perhaps most importantly, there is now a clear view on the status of EU citizens living in this country after Brexit,” said Julia.

“Those EEA citizens living here on December 31 2020 – and who have already been here five years – will be granted settled status, whilst those with less than five years residency will be given an interim status which can lead to settled status once they have met the five-year residency qualification.”

Under the Government’s new plans, more than three million EU citizens will now have to apply for documentation confirming their status by June 2021.

According to Julia, it is imperative that manufacturers employing EEA migrants make sure they are aware of the new requirements and keep a record of which members of staff have obtained the new status.

The Government has also pledged to provide a toolkit for employers with a range of practical advice on how to go about applying for settled status.

“Something they would do well to share with their EEA migrant workforce when it is published on the gov.uk website,” said Julia.

She added: “Of course, much of what the Government has said up to this point about how Brexit will impact manufacturers is based on the assumption that we will reach an agreement with the EU over the terms of our departure.

“But if the UK leaves the EU without a deal it is almost impossible to know what the implications for manufacturing – and the wider business community – will be.

“For that reason, it is still too soon to be able to paint a truly definitive picture of what form UK employment laws will take come March 30 2019.”