Brexit is effective but there is still time to manage the impact on HR

Posted on: 22nd Feb 2021 by: Demos HR Solutions

Brexit HR implications by Demos HR Solutions
Demos HR Solutions Brexit HR Blog

Five years after the UK voted to leave the EU, the Brexit deal has now been done. At Dêmos HR Solutions, we’ve been updating employers about the potential HR implications over the past two years, and now that we have further clarity on the implications of Brexit (with Covid-19 thrown into the mix!), please see our up-to-date blog with all the details on legislation and potential HR implications to your business.


EU Settlement Scheme

UK industries which employ a large number of EU nationals are likely to be the most vulnerable to a Brexit workforce shortage. Industries like the public sector, construction, manufacturing, hospitality and farming industries could be left with a smaller talent pool and difficulties filling vacancies, especially around more seasonal roles. That is why the Government has set up the EU settlement scheme which offers a transition period for current EU national UK residents who were living in the UK before 31st December 2020, allowing them to apply for ‘Settled Status’ before 30th June 2021 if they have been continuously resident here for 5 continuous years between 6 months in any 12-month period. Settled status will allow these individuals to stay and work in the UK for as long as they like.

If EU nationals have been continuously resident for less than 5 years, they’ll get ‘Pre-settled Status’ which will give them a further 5 years to stay in the UK, subsequently allowing them to convert to Settled Status – again this applies to EU nationals that we’re living in the UK before 31st December 2020. EU citizens who are awarded settled or pre-settled status will be able to continue their role in a company, helping to prevent the loss of valuable employees. 

It would be prudent to support your employees in applying for Settled status or Pre-settled status (for example, have the correct ‘right to work’ documentation) – please click here for the full information from HMRC.

As of 1st January 2021, there is no requirement for work permits for individuals travelling from the UK to the EU for short business trips (freedom of movement), however, there is no such agreement in place for individuals travelling from the EU to the UK for the same reason, and a visa will normally be required to undertake paid work.


Points Based System (PBS)

The Points Based System has been designed to further support employers manage the implications of Brexit, by treating EU and non-EU citizens in exactly the same way with the overall goal of attracting skilled workers who have had a job offer from an approved employer sponsor to take up employment in the UK.

There are certain requirements for jobs that are offered and candidates that apply via the PBS as follows:

  • Minimum required skill level of RQF3 or above (similar to the standard of A-Level)
  • Jobs must offer a salary set to at least the relevant salary threshold by the sponsor (whichever amount is higher of either the general salary threshold of £25,600 or the going rate for the job). Workers that earn less than this figure, but more than £20,480 per annum may still be able to apply via the PBS under different criteria, for example, if they hold a PhD relevant to the role, or being offered a job in a shortage occupation.
  • The candidate will need to be able to speak English to a certain standard.

A number of PBS rules have changed since the Brexit deal was confirmed including:

  • EU citizens would have previously been able to move freely within the European Union, including to and from the UK, however, as of 1st January 2021, this is no longer the case.
  • Employers no longer have a general route to recruit from outside the UK, at the minimum wage which is likely to have major implications on a number of industry sectors such as farming and agriculture.

For further guidance on how to become an approved employer sponsor and on the PBS, please visit Gov.uk here. In the meantime, it may be helpful to explore different avenues for finding new sources of labour, for example, it may be worth considering the advantages of making connections with local prisons or ex-offender services, which could mutually benefit the community whilst replacing lower-level skilled workers at the same time.


EU HR Legislation

The UK now has the freedom to deviate from future EU laws, and in relation to employment law specifically, UK employment rights will not be weakened or reduced beyond the level they were at on 31 December 2020 as the UK has agreed to non-regression and rebalancing provisions. Due to this provision (which also means that the EU will have the right to apply tariffs that ensure the UK doesn’t gain a competitive advantage over EU-based employers by working to less onerous employment standards where there is definitive evidence that EU trade or investment has been negatively impacted), the likelihood of changes being made, and the scope of potential changes is probably going to be limited.

Existing EU-derived employment law such as TUPE and the Working Time Regulations, are unaffected and will remain as they are currently observed. However, the Court of Appeal (CA) and Supreme Court (SC) no longer need to follow existing pre-2021 decisions by the European Court of Justice (ECJ) and, if they consider it appropriate, can depart from them. This may potentially result in previous holiday pay rulings being overturned which have in the past have proved problematic for UK employers.

As soon as we have further information on the EU laws that have already started to be implemented and due to be effective by August 2022, we will provide further details. These include:

  • Whistleblowing Directive
  • Transparent and Predictable Working Conditions Directive
  • Work-Life Balance for Parents and Carers Directive (due August 2022)

Whilst there is still some uncertainty around the continuation of EU employment law, the Brexit agreement does state that both the UK and the EU will continue to improve their labour protection laws.


General Data Protection Regulation (GDPR)

GDPR has been retained in the UK alongside the Data Protection Act 2018, however employers will need to consider the potential impact of the UK now being deemed a ‘third

country’ by the EU. For example, if you are a UK arm of an international organisation handling and processing global employee information.

If you have not already done so, it would be wise to undertake an audit to determine where and how your employee or customer personal data is kept and transferred to, particularly if you recruit and employ EU workers or your business trades with customers in the EU.


The Recruitment Process (affected by Coronavirus)

Lockdown and travel restrictions as a result of Covid-19 have meant temporary changes being made to the way you can check documents for a job applicant's right to work including asking for documents digitally, making checks on a video call, and what to do if someone cannot provide any accepted documents.

We don’t know how long restrictions will be in place, however, if you need support on managing your recruitment processes and ensuring you are adhering to new laws as a result of Brexit, please visit Gov.uk on how to check documents for an job applicant's right to work.


If you require support with workforce planning or developing a strategy to limit the impact of Brexit on your workforce, speak to Debbie at Dêmos HR Solutions on 07974 695 365, or complete our enquiry form, for professional advice in times of uncertainty.

Tags: Brexit, recruitment, GDPR, employment law, EU settlement, Points based system, ,