UK businesses need to resume preparations for no deal immediately as neither the UK nor the EU is ready for a no-deal Brexit on 31 October, the Confederation of Business Industry (CBI) has warned.
The lobby group said that although many businesses had spent billions on contingency planning in case the UK drops out of the EU without an exit arrangement, they had been “hampered by unclear advice, timelines, cost and complexity”.
The CBI said that if a no-deal Brexit happened, HR and internal comms teams needed to have processes in place to reach out to and reassure EU employees whose right to work status might be affected – and said it was important to have such communications prepared and signed off in advance of no deal occurring.
It added that while many employers had already taken steps to ensure that EU citizens in the UK had a route to settled status, there had been confusing messages about these processes, leading to workers “experiencing significant anxiety and uncertainty since the referendum”.
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The government has previously stated that, in the event of no deal, EU citizens already in the UK before exit day (currently 31 October) will be able to remain in the UK. They will have until 31 December 2020 to apply for status under the EU Settlement Scheme to protect their status.
In its report, What comes next? The business analysis of no deal preparations, the CBI put forward 200 recommendations for businesses, the UK government and the EU to help accelerate no-deal preparations – including calls for the government to work closely with employers to make information and technology more accessible to HR professionals, who will in turn be preparing employees for Brexit.
The CBI has been a vocal opponent of a no-deal Brexit, and alongside its calls for a step up in no-deal planning it has urged the UK and EU to work toward an agreement on a deal that would be a “catalyst for future growth and prosperity”.
Josh Hardie, deputy director general of the CBI, said businesses were “desperate to move beyond” Brexit, and that securing a deal would “open many doors that have been closed by uncertainty”.
But, he added: “Until this becomes a reality, all must prepare to leave without one. It’s time to review outdated technical notices, launch an ambitious communications campaign for every firm in the country and rigorously test all government plans and IT systems.”
The business group said firms were dependent on HR directors and their teams to find the capacity to develop no-deal contingency plans. While many larger companies, particularly those in regulated areas such as financial services, had well thought through contingency plans in place, the CBI said this was more difficult for smaller firms that often lacked a central HR function, meaning they were less well prepared.
Among the recommendations included in the report was a call for the government to provide more information on the proposed European Temporary Leave to Remain scheme, which would be enforced in the case of no deal.
Under the scheme, EU nationals arriving after a no-deal Brexit took place would need to apply for temporary leave to remain if they wished to stay longer than three months. The scheme was devised as a stop-gap to facilitate migration from Europe until a points-based system could be introduced.
The CBI said the government needed “simple, easy to understand” communication aimed at employers to help them plan and disperse information to relevant workers who may be affected by the changes.
Gerwyn Davies, senior policy adviser at the CIPD, told People Management that the CBI’s suggestions were sensible, especially around the European Temporary Leave to Remain scheme, “which many employers aren’t aware overrides the transitional period that would effectively allow free movement to continue until 2021”.
But he highlighted that the biggest Brexit-related concern facing HR was the “evident lack of preparation for the introduction of the new immigration system in January 2021”.
“Many employers, especially low-skilled employers, will be hugely affected by the new system and will be facing huge resourcing challenges if they do not take steps to offset the looming threat of labour and skill shortages,” Davies said.
“An audit of the workforce that identifies where EU citizens are employed should be undertaken alongside a strategic workforce plan to help identify risks and develop contingency actions.”
The CBI also said the government should take on some of the business community’s suggestions around improving accessibility of information in the technical notices being released as part of no-deal preparations.
The business group said the number of different documents available to read and act on could be “overwhelming and [lead] to disengagement” from employers.
It said it was sensible that businesses could filter advice by sector or area, but to be truly business-friendly it needed to focus on the “absolute essentials”. Additionally, the CBI said it should be possible to filter advice by role so that, for example, HR departments could access information about EU employees easily without worrying about other elements.
The CBI’s recommendations come as the new home secretary, Priti Patel, promised a “radical rewrite” of the UK’s immigration system. In an article for the Daily Mail, she echoed prime minister Boris Johnson’s previous pronouncements about the benefits of an Australian-style points-based immigration system.
And she said the government would be “urgently commissioning” the Migration Advisory Committee to review the Australian system and look at elements the UK can implement to make the system work. She added that such a system would “allow us to welcome talented individuals from all over the world”.