Posted by: Sarah Westwood

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HR Directors’ Brexit Dinner

Oakleaf Partnership co-hosted this quarter’s HR Directors’ dinner last Thursday evening alongside Eversheds Sutherland. We were joined by HR Leaders from across the Midlands, as well as by Chris Hare, Economist from HSBC and Audrey Elliott, Employment & Immigration Partner from Eversheds Sutherland.

The consensus of the conversations that emerged from the dinner event was that we now face four likely scenarios with regards to the potential outcomes of Brexit negotiations. The first being Chequers Plus, and the most likely.

The central theme of the Chequers deal is that the UK will have free goods trade and facilitated customs arrangements. There are several problems that may arise because of this: Firstly,
facilitated customs arrangements rely on new technology and border checks – does the technology exist to achieve this? Secondly, will Parliament vote for it and will this then generate a general election as it would require full Labour Party support. If we did end up with Chequers Plus there is the feeling that the UK economic outlook would remain stable with the current growth rates at 3% wage growth and interest rates unlikely to change for the next 12 months.

The second likely scenario is “Norway”, or “soft” Brexit. This would result in open immigration and ongoing budget contributions. It would be a quick “off-the-shelf” solution which might improve business confidence, as well as improving the strength of the pound and take-home pay. Still, the question remains: does this reflect the will of the people, and therefore could this create further political instability?

The third likely scenario is “The People’s Vote”. If the government goes back to the people, is there enough time to organise another vote so that the Article 50 deadline would have to be extended? And what exactly would the people be asked?

The final scenario is that there is “No Deal”, which would mean leaving at the end of March 2019 and reverting to World Trade Terms. There may be short term arrangements in critical areas such as aviation, however, it is very likely that a “no deal” Brexit would create economic uncertainty, with the value of the pound dropping, increased inflation and the Treasury being forced to loosen fiscal policy. “No Deal” is the least likely scenario and if it did happen it would happen by accident.

In summary, the view is that the Chequers Plus is the most likely scenario to be adopted, and it would be something that we could all live with.

Our discussion then went on to talk about Immigration. The current situation is that any EU national who currently lives in the UK or comes to the UK before December 2020 can apply for Settlement Status if they have lived in the UK for five years plus. The Home Office will be launching an App which will allow individuals to apply for Settlement Status. The App is designed to be very user friendly.

The consensus is that the Home Office is taking a more “helpful” approach and encouraging people to apply for Settlement Status. The other positive effect of the App is that employers will be given access to employee details online, so that they can check their status online.

The potential challenges facing employers: Although EU migration into the UK is continuous, albeit at a slower pace, businesses need to start considering how this will affect resource planning after 2020. Additionally, as the Home Office has a poor track record with immigration change (e.g. Windrush), there is a degree of scepticism about how Settlement Status will play out and what employers can do when one of their employees do not receive Settlement Status.

Suggested next step for employers is to start looking at who in their workforce are EU nationals and to communicate with them around the application for Settlement Status. Employers can support staff and help them understand how to use the App and process their application. They can consider offering to pay for the application fee of £65 and provide them with the IT equipment to use the simple App when it is launched.

Finally, it’s always important to consider the effect the changes will have on your right to work documentation within your own policies, procedures and employment contracts.

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