By the end of 2016 one of the most important votes in recent years will have taken place and the results, which could have international impacts, revealed. No, I’m not talking about if Donald Trump will be moving into the White House but whether the UK will remain part of the EU.
The UK referendum on 23 June 2016 could see the UK leave the EU and a Brexit vote will have major consequences for employers and their workforce.
Under EU Law citizens of EU Member States have the right to move to, and work in, any other Member State. The April – June 2014 Labour Force Survey found that there are around 1.73million EU nationals living in the UK; 79% of whom are in employment. In addition British Consular Authorities estimate that 2.2million UK nationals live in other EU Member States. A Brexit result could, theoretically, remove this automatic right to move around, and work in, the Union.
What provisions would apply instead?
Eventually it is likely that special arrangements will be put in place between the UK and other EU countries to mirror the free movement provisions that currently exist. In the meantime though, presumably, the UK’s current immigration laws for non-EU citizens would take effect. All EU citizens who currently reside in the UK under their automatic free movement rights may need to apply for permission to continue to reside and work in the UK.
So what can you do in preparation for the Referendum?
All employers will wish to minimise disruption to their workforce whilst ensuring that their employees remain legally resident and able to work in the UK. Therefore now is the perfect time to complete a workforce audit.
Employers should look specifically at an employee’s right to work in the UK, see the guidance on the UK Home Office website. It should also be noted that employers can be fined up to £20,000 for each illegal worker they employ. Identify employees who would be affected by a Brexit result and consider if they are eligible to apply for permanent residency.
A Brexit could also impact on staffing levels. It may become more difficult to recruit and retain employees or transfer employees around the business into different countries. For example many manufacturing businesses are relocating key employees to new factories and offices in Eastern EU Member States where production and labour costs are much lower. In addition a Brexit could result in a skills drainage or skills gap. Think ahead, we will not leave the EU overnight and it will take time for new arrangements to be agreed whilst everyday business life will continue and business decisions will still need to be made.
The impact of a Brexit result, no matter how small or how short lived should not be overlooked. Voting day is closer than you think, now is the time to act.