Brexit – we’re in it for the long haul

Last week I attended London HR Connection meeting, where the topic was Brexit. The panellists were an employment lawyer, a high-end recruiter / head-hunter and a People Management magazine editor. All three gave their impressions of Brexit so far and predictions for the future.

Employment law unlikely to change much

One of the reasons some voted to leave the EU was to be rid of the burden of EU regulation. It is unlikely that the UK will change much when it comes to employment law, however. In many areas, UK already had legislated for many workers’ rights before it was made compulsory on an EU level. A lot of rights, like statutory annual leave, for example, have been independently legislated in the UK above the EU minimum requirement.

Unpopular regulations may be scrapped

In the case of a ‘hard Brexit’ where UK would not be bound by EU demands in order to access the single market, we may see the back of some EU law. What may change are the less popular regulations. For example, agency worker and age discrimination regulations might be scrapped. The rules around TUPE transfers and requirements for collective consultations for redundancies might also change. The rulings of EU courts on holiday pay have also been hugely unpopular and costly to UK employers and they would likely be repealed. There is also a new cap on bonuses that is coming into effect in January 2017, which might not stay in force very long after Brexit.

Key elections in Europe will delay Brexit

All changes are likely to be far in the future, though. It was mentioned that the current appetite for pushing full steam ahead with Brexit is not very strong. The French are electing a new president in May 2017 and Germany is holding a general election in October next year. Proper negotiations about the form of Brexit can’t begin until these new key EU leaders are in post. Some have also suggested that the Conservatives might wait until after the next UK general election before making binding changes in the relationship between UK and the EU.

Corporate world is waiting and seeing

From an executive level recruitment perspective things are very much business-as-usual. The main concern here is the length of the period we will spend in the current ambiguity and uncertainty about the future. The sooner some definitive steps are taken so that companies and individuals can plan and prepare for the changes, the better.

Manufacturing and services will be hardest hit

Rob Jeffery from People Management had the most pragmatic take on Brexit. He was more in-tune with the UK industry and Brexit’s impact to low-wage workers. This is the area that is likely to be hardest hit with Theresa May’s anti-immigration drive. In many manufacturing and service industries more than half of workers are Eastern European. If that recruitment pool is no longer available to employers, wages are likely to rise followed by consumer prices. Small employers are already seeing a reduction in applicants for jobs, where previously it was easy to recruit from within the migrant workforce. One challenge will be in building skills and appetite among young British workers to pick up the slack.

Zero hours contracts can cause a problem

Many employers of skilled workers are considering sponsoring their key staff for British citizenship, if they fulfil the 5-year residency requirement. That won’t be the case for minimum wage employees, though. Replacing staff on zero hours contracts may prove difficult. Employees on these casual working arrangements can also very easily move to another country if pressure in the UK mounts and they no longer feel welcome.