April 4th, 2017 | Sterling

The “Official” Start to Brexit in the UK

London red phone booths

UK Prime Minister, Theresa May officially signalled Britain’s exit (Brexit) from the European Union (EU) on Wednesday 29 March 2017, nine months after the UK citizens voted for Brexit. This action starts in motion a series of negotiations between the UK and the remaining 27 EU Member States, represented by the European Commission. There is a two-year deadline for these negotiations, which will cover everything from trade to immigration to employment laws. If no agreements are made, trade between the countries, and no decisions are taken to extend negotiations, the UK’s relationship with the EU will revert to the rules of the World Trade Organization, which could greatly affect Britain’s current trading position. Regardless of the agreement process, the impact will be significantly felt by many UK employers, with those in HR watching especially closely.

The next two years as Britain works through the separation plan could enact a number of significant economic changes. According to the New York Times, “Britain has put in jeopardy its trading relationship with Europe, its largest customer for exports while imperiling London’s status as banker to the planet.” As mentioned in the same New York Times article mentioned above, some financial institutions have started preparing to move jobs out of the UK to other financial capitals in Europe while other industries are waiting to see what will happen to start making plans.

The UK will introduce The Great Repeal Bill before Parliament during the course of negotiations which will come into effect on the day the UK leaves the EU (currently set for 29 March 2019). The Bill would transfer all currently applicable EU laws (known as the ‘acquis’) on everything from workers’ rights to environmental issues into domestic UK law. These laws can then later be amended by Parliament as it sees fit. This is one of many preparatory steps over the next two years.

What Should Companies Do Now to Prepare for Brexit?

The UK government triggering Article 50 of the Treaty of the European Union does not itself bring immediate changes, but businesses need to start planning now for changes to come. Pending the negotiations, the UK will continue to be a member of the EU and must abide by EU law. Therefore, EU nationals will still continue to be able to move freely, work and live in another member state, including the UK. The Chartered Institute of Personnel and Development (CIPD) lists three key areas of employment action that companies need to start now to prepare for changes that could come about because of Brexit.

  • Risk Analysis – Brexit-related changes could have a major influence on staffing levels and an organisation’s ability to meet its productivity and goals. Industries such as hospitality, agriculture, retail, health, social work, construction and manufacturing which employ 56% of the 2.26 million non-UK EU nationals could be adversely impacted by Brexit changes. Companies need to create a business and communications strategy to discuss the Brexit changes with all employees.
  • Recruitment proposition – Exit from the EU could lead to heavier migration restrictions in the future, reducing the number of overseas workers available to UK companies. UK businesses will be competing for a reduced group of available skilled workers. This will require organisations to make recruiting propositions as appealing as possible with available resources.
  • Brexit Management Capability – It is still too early in the Brexit process to see what employment legislation will be affected by the changes. Companies should set aside HR personnel and other resources to implement Brexit changes and manage the transition for their businesses.

Brexit Effect on Background Screening

Although the outcome of Brexit is far from certain, there is likely to be an impact on immigration and recruitment of foreign-born workers in the UK, which could potentially make the country less competitive by restricting the talent pool. Employment and immigration laws are bound to change due to Brexit, but it is still uncertain how it will affect background screening. Reach out to your background screening provider and legal advisor to receive the latest on how Brexit will impact background screening. Keep up-to-date with the latest changes in the background screening industry by subscribing to newsletters or webinars, such as those provided by Sterling.

This publication is for informational purposes only and nothing contained in it should be construed as legal advice. We expressly disclaim any warranty or responsibility for damages arising out this information. We encourage you to consult with legal counsel regarding your specific needs. We do not undertake any duty to update previously posted materials.