Why Scotland’s employers face unique Brexit employment challenges

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Dependency on EU workers is particularly acute in some sectors

A month on from the EU referendum, many Scottish employers are still wondering what the ‘new world’ will look like, and how this will affect their ability to fill jobs given the potential changes in immigration laws. Many are asking whether Scotland’s businesses can flourish if they lose access tothe three million EU workers currently in the UK.

The ability to live, work and study anywhere within the EU has been an integral part of EU membership for decades. Access to a large pool of EU workers (without costs, admin or visa fees) has provided Scottish employers with a far greater pool of labour than they would otherwise have had, and has compensated for the London brain drain.

At present, it’s unclear whether the principle of free movement of workers will remain part of our arrangements with the EU following Brexit. European leaders have indicated that the UK cannot access the single market without recognising free movement, while Theresa May has indicated that controlling EU migration is critical.

Although her government is still formulating the UK’s position, some recent press comments have hinted that ‘freedom of movement’ for those who have a job may be an achievable compromise. But nothing is certain and as negotiations on the terms of the UK’s exit from the EU will not commence until 2017, it appears that employers will be in the dark for months to come.

If free movement is restricted, it is inevitable that fewer migrants will come to Scotland. That could result in recruitment difficulties, particularly for lower-skilled jobs that are harder to fill. In some parts of Scotland almost a quarter of jobs in specific sectors are currently filled by EU workers. The needs of the Scottish economy have always been distinct from other parts of the UK and, with a falling working age population, it may not be in Scotland’s interests to close its doors further to immigration.

The prospect of a second independence referendum adds an extra layer of uncertainty for Scottish employers. Will they be able to attract sufficient overseas talent when Scotland’s relationship with the UK could be up in the air once again?

In the meantime, employers must deal with some immediate employee relations issues as a result of Brexit. Existing EU workers have been left in the unsatisfactory position of ‘hoping’ that they will be allowed to stay in the UK. Theresa May has indicated that assurances will not be given to EU workers in the UK until reciprocal arrangements have been agreed for Brits in the EU, so it may be some time before those EU workers can rest easy.

Although employers cannot give assurances, it would appear likely that some sort of arrangements will be negotiated to protect these employees’ position. EU workers who have been working in the UK for five years are likely to have permanent residence rights and employers might want to encourage such employees to apply for a document to certify their residence rights to give them added comfort.

Looking forward, it does seem likely that recruitment will become trickier for employers in certain sectors. It is possible that we may see a broadening of the points-based immigration system to cover EU workers and also lower-skilled jobs if there are gaps in the labour market. Employers who have a sponsor licence should take care to ensure that any compliance obligations are met as the licence may become more important than ever in the future once the pool of EU workers’ contracts.

All that is certain is that there will be change – and the sooner it happens, the less the impact will be. In employment terms, there will be an enormous job to do unpicking the fine print, but it is likely that ways will be found for EU workers already in Scotland to enjoy a similar status as at present. In the meantime, it’s the short-term impact of more uncertainty that is most concerning for employers.

 

Story via – http://www.cipd.co.uk/pm/peoplemanagement/b/weblog/archive/2016/08/02/why-scotland-s-employers-face-unique-brexit-employment-challenges.aspx

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