3 BREXIT changes that impact both your Business & Employees
Updated: Apr 10
The Covid-19 pandemic is and remains very real and the government, business leaders and HR colleagues continue to do their best to keep society going.
This post aims to drive focus on another ongoing change with real impacts on businesses and employees - BREXIT!
Below are three key business and employee related changes triggered by BREXIT. I encourage you to read on - it may be the one read you need to make that critical decision.
1. Will 48-hours per week still define FTE (full time employees)?
EU Working Time Directive (WTD): Stipulates that full-time employees work an average of 48-hours per week however, as part of the UK business department review of employment law in relation to BREXIT, deliberations are ongoing with regards to a repeal of this working time directive.
Although deliberating ministers continue to give assurance that businesses and workers interests will be catered for, a reduction on weekly hours will likely see low-paid employees earn less and may have to work multiple jobs while employers may have to recruit more heads to make up for man-hour shortfalls in addition to increased administrative costs and efforts to update employee contracts, terms and recalculation of holiday and work-time related entitlements.
Change to Employee Holiday Pay Calculation
The UK government is also considering reviewing how employee holiday pay is calculated.
Under the current rules, employers pay employees a week’s pay for each week of statutory leave consumed. It’s important to mention that the week’s holiday pay should include required pay for regular overtime.
Again, depending on the change, employees may be worse-off pocket-wise and this may impact employee morale, engagement and even employer loyalty as there may be increased job shopping, seeking organisations with the ‘best’ total reward package. Employers on the other hand, are currently subject to a lot of claims due to wrongly calculated pay; further changes may lead to increased claims despite good intensions and best efforts on the parts of employers. This situation is particularly important for workers with irregular work patterns and schedules. Employers also need to be aware that holiday pay has always been a sore point of engagement in unionised environments
3. UK - EU: Freedom to Roam as Home?
From the 1st of Jan 2021, workers moving into the UK from EU countries are required to satisfy the same immigration as workers from non-EU countries such as China, India or Africa.
In addition, citizens from the EEA (European Economic Area) who were living in the UK as at the end of December 2020, will not be subjected the above migration restrictions on the condition that by June 30th 2021, they have had a successful application to the EUSS scheme (European Union Settlement Scheme)
Likewise, the European commission has stated that UK citizens travelling to the EU and Schengen area, they will be treated as non-EU nationals and as such, subjected to immigrations conditions as agreed with their respective country governments. However according to Schengen Border Code, UK nationals will not need visas if they intend to visit (Not for work purposes) EU countries for up to 90 days within any six-month period.
There were an estimated 29.33 million UK nationals working in the UK, a record high and 227,000 more than a year earlier.
There were an estimated 2.31 million EU nationals working in the UK, 36,000 more than a year earlier.
There were an estimated 1.34 million non-EU nationals working in the UK, 49,000 more than a year earlier.
Facts source: ONS as at December 2019
There is a growing challenge for organisations with regards to keeping up with, understanding and being able to comply with the trend of legislative changes brought about by the COVID-19 pandemic and more silently, BREXIT. There is also a rising trend of employment tribunal cases – further increasing existing backlogs of yet-to-be attended cases. Organisations need to either review their HR capacity/capability or engage the services of experienced 3rd party HR practitioners to keep afloat of the choppy employment law waters to avoid organisational performance dip as well as commercial and reputational risks via litigation.
For those non-UK based companies who may struggle with the challenges and administration of the points-based option provided by the government to find and hire employees from the EU, an option for them is to employ the services of an Employer of Record. This will help circumvent the need for having their workforce transition into the United Kingdom.
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