As arguments for and against Brexit are gaining pace ahead of the national EU Referendum on June 23rd 2016, consideration needs to be given to UK employers, the effect on them, and the knock on effect on UK Human Resources Departments and the Recruitment Industry. Whichever way the EU referendum goes, it will have consequences for UK employers.
A dominant swathe of those eligible to vote in the EU Referendum in June were not eligible voters back in 1973 when the UK entered the European Union. This has two-fold power. Firstly, this age group of voters are the current working generation, many responsible for business and with it recruitment and employment law and regulations. Secondly, these voters mostly won’t remember what Britain looked like on the outside of the EU looking in.
To understand the implications of Brexit and the EU Referendum now it is important to look at it within the social, political and economic political climate of the pre-EU days. In the heart of the Thatcher era, private business was king. With the entry in to the EU in 1973, the effects weren’t just apparent directly on the economy and trade, but also in a more subtle and slower way through the legal effect of EU treaties gradually making their way in to EU law.
The biggest implications of the EU on UK employers and therefore their Human Resources departments and the wider recruitment industry needs to be looked at within two key contexts: Employment Law and The Job Market.
Without a shadow of a doubt, the UK’s Employment Law landscape would look enormously different without the direct influence and implications of being part of the EU. The main Employment Law areas covered by EU legislation include:
On top of the above laws and regulations, the reach of the EU is completely intertwined with UK Employment Law. Europe is responsible for bringing us Maternity Leave Rights (protecting both the individual and the employer) Parental Leave rights, further pay equality than the UK’s own previous laws, Data Protection, Redundancy Consultation, TUPE (Transfer of Private Undertakings), Health and Safety, and Human Rights. All these areas of law are governed by, or largely affected by, EU directive.
All the while the UK remains in the EU then UK business has a voice in the shaping of these regulations. A worrying scenario would be if the UK went down the Norwegian route and the UK was still governed and restricted by these laws, but without the power to influence them going forward. At present, UK business has a strong voice in the EU. Remove this and UK business could find itself hindered.
The Office of National Statistics tells us that 942,000 Eastern Europeans, Romanians and Bulgarians work within the UK. However, these figures can’t be looked at in isolation. The UK plays host to a further 791,000 western European workers. But this figure still pales in comparison to the number of workers the UK has from outside of the EU – a whopping 2.93m, from places such as China and India. These figures need to be considered as a whole, and why the UK economy is currently reliant on non-UK workers.
Working in Human Resources or Recruitment yourself, you have likely been faced with skills shortages from within the UK market alone which you can more easily fill from abroad. This ability to recruit from beyond our own borders gives us economic power. Professor Adrian Favell, from the London School of Economics, says that limiting freedom of movement and employment would deter the brightest and the best that enter the UK from the EU.
Without this freedom of movement the UK employers may have to move to other lower cost, more competitive EU countries. The car manufacturing industry has already hinted at this possibly knock-on effect of leaving the EU. In a slightly different vein, UK farmers would struggle even further if EU subsidies were removed.
There are pros and cons for both camps. The reality is that even if we exited Europe, we aren’t operating in the political and economic climate of the 1970s. We’re now in the digital age, and it seems to remain competitive then we have to utilise Europe to the best of our advantage, whether that’s staying in or getting out. We’d love to hear your thoughts in the comments section below.