HR Trends

The day after Brexit for HR

by Michael Custers

It has been difficult for anyone living, working, or with an interest in Europe to avoid the “Brexit” debate. As I write, there is only one certainty; after the vote on June 23, the UK will either be in or out of Europe. Even then, we will have no true view of the impact this decision will have for employers and their employees. It will be up to two years before the new set of relationship rules will be in place.

Should we stay or should we go?

This is not a question my colleagues and I at NGA HR can answer. What we can do is help HR and payroll professionals think about the changes if the vote goes in the favor of the UK exiting the EU.

NGA HR’s The Day After Brexit Guide considers the impact on two major areas of HR if the UK exits: The workforce and the law.

What should HR & Payroll professionals do now?

  • Take a little time now to understand the bigger picture
  • Drill down to the likely impact on workforce skills needs
  • Consider the legal landscape and which laws will impact your business most
  • Think about the questions your employees will ask you – and how you will respond. Employee communication and engagement is vital in times of change

What do we know?

Following is a snapshot, but to feel more informed about the possibilities that lie ahead, it is worth having a look at the guide.

1) The workforce

  • If the UK votes to leave the EU, the free movement of people to work anywhere in Europe could end
  • It is thought that anyone who arrived to work in the UK before the Brexit vote will be allowed to remain legally, and visa versa. The opportunities and rights for new migrants are not known, and could be restricted
  • There is no guarantee that the EU will block movement to the UK

2) The law

  • A vote for Brexit will give the UK the power to repeal or reshape current employment legislation. However, it is unlikely that a wholesale abolition of EU-based workplace law will be allowed
  • Working Time Regulations and the Agency Workers Directive are most likely to be revised
  • Union power and TUPE, bonus payments legislation and data protection laws are likely to see only modest revisions
  • Discrimination and family-friendly working legislation is less likely to be affected

3) The Euro and the Pound

  • UK has assurances that Eurozones will not discriminate against Britain for having the Pound
  • British money spent on bailing out Eurozone countries will be reimbursed

4) The City
Safeguards are in place for Britain’s financial services industry to prevent Eurozone regulations being imposed on it

5) The workforce
Low skilled workers wanting to move to the UK are most likely to be affected. This could have an impact on agriculture and other industries with a high percentage contingent workforce

6) Wages
Businesses will no longer be able to set-up bases, under “freedom of establishment” in countries where the wages are lower, e.g. a low-cost airline which set up in Latvia to take advantage of lower wages

Why is the UK an attractive proposition for European workers?

  • Low unemployment means plentiful job opportunities, in all sectors
  • Migrants from Western Europe tend to be university graduates. Those from Eastern Europe are more likely to hold vocational skills
  • The UK minimum wage is the third highest in the EU
  • 257,000 EU nationals moved to the UK over the last 12 months
  • 1 in 8 of the working population is from the EU

No one can be certain what will happen the day after Brexit, if anything, but it is good business sense to have considered the options and to have a plan in place.