UK: Immigration Rules After Brexit Could Disrupt Labour Supply In The UK Construction Industry Severely. What Are You Doing To Minimise This Risk?

Do you and your UK supply chain know how many EU workers you employ?

Do those EU workers know what action to take to continue working in the UK after Brexit?

Will you support your workers and supply chain in making the appropriate applications for residency documentation?

Panel session on 6 June 2018

We recently held a breakfast seminar on the impact of Brexit on the UK construction workforce.

Our experienced panel was chaired by Kirsti Olson, partner in our Construction team, and included Dentons' UK Head of Immigration, Jessica Pattinson, Joseph Dromey (of the Institute for Public Policy Research (IPPR)) and Fergus Harradence (construction sector lead at the Department for Business, Energy and Industrial Strategy (BEIS)).

Together, the panel presented some hard facts about the current make-up of the UK's construction labour force and flagged up issues that could lead to labour supply shortages after Brexit. For example:

  • a significant proportion of the overall UK workforce is over 35 – fewer, young UK nationals are entering the industry;
  • self-employed workers made up more than 40% of the construction workforce in 2016;
  • 54% of the construction workforce in London (in 2014) consisted of foreign-born workers. Many of them are skilled workers (e.g. 15% are carpenters; 8% are civil engineers).

A summary of what the government is doing about the issues was also explained, including a focus on procuring for better value, industry-led innovation and skills for the future.

What are the issues for employers and contractors?

Many European Economic Area (EEA) workers work for or as sub-contractors on projects across the UK. Some might be aware of the need to apply for UK residency but might not be in a position to make the application. For some, returning home or working elsewhere in Europe might be far simpler and more attractive than the hassle of complying with the UK's immigration procedures.

Given the substantial number of EEA workers employed on UK projects – particularly those based in London and the surrounding counties – employers and contractors in the construction industry cannot afford to ignore the potential effect of Brexit on their labour supply. The panel made clear that:

  • EEA nationals and their family members who arrive before the end of the Brexit transition period (31 December 2020), will be able to remain in the UK, but must apply for new residence documentation prior to 30 June 2021.
  • Applications for residence documentation under the "EU Exit Settlement Scheme" will open to non-UK workers later this year.
  • Employers and contractors (as well as SMEs themselves) have a role to play in ensuring that those involved in their projects comply with this process as soon as possible.
  • Contractors themselves might employ few EEA workers – but a high proportion of their SME sub-contractors could be either EEA workers themselves or employers of EEA workers.

If those sub-contractors fail to carry out the application procedures in time, they may find themselves without the necessary documentation to work legally in the UK from 1 July 2021. The consequent fall in the labour market is likely to cause potentially massive labour shortages, make the remaining workforce more expensive to employ and delay projects.

What can you do now?

The avalanche of Brexit information has led to overkill and many have, understandably, switched off from the issues. This is understandable but short sighted. As our speakers explained plainly, the potential effect on the construction labour market is likely to be significant, especially when combined with the impacts of having an aging workforce.

To find out more, read our summary of the panel session below, including some of Jessica Pattinson's useful tips on how contractors and employers can work with their EEA employees and sub-contractors to navigate the residency application process.

To appreciate the full extent of the issues that face the industry, we recommend you watch the recording of the session which is available on request by emailing: amy.clark@dentons.com or by contacting your usual Dentons contact.

The immigration status of your supply chain is not one of those Brexit-related issues that can wait until after Brexit. Commercial directors and human resources teams who act quickly and collaborate with their supply chains could make a significant difference to their operations and reduce the risk of costly delays.

How can we help?

Jessica Pattinson is Head of Immigration at Dentons and runs a UK-based team who are experts in immigration issues. They have spent the last year advising organisations on how to address Brexit-related immigration and visa issues. They can advise you on the risks for your business and/or facilitate seminars and clinics for your supply chain to ensure EU workers can, where possible, remain working in the UK – on your projects.

Request a copy of our immigration guide or the recording of the seminar

For more information or for a copy of our "Guide on Immigration and Brexit for UK-based EU nationals", get in touch with Jessica Pattinson or Kirsti Olson or one of the Construction team listed under Key Contacts. They can also provide you with a link to the recording of the event.

Overview of the panel session: the impact of Brexit on the UK's construction workforce (and how to manage it)

Fergus Harradence, Construction Sector Lead at BEIS and Joseph Dromey, IPPR

  • Construction is one of the sectors most heavily reliant on EU migrant labour (along with agriculture, health and social care). This is especially the case in London.
  • Migrant labour takes the strain caused by an ageing UK-born workforce (1/3 are over 50) that is not being replaced fast enough by young people coming in (who are also not always being taught the skills most in need).
  • If you apply the various proposed models for regulating immigration post Brexit to the current EU migrant construction workforce in the UK (as if they were new migrants):

    • on the most migration-friendly model (a points-based system), 67% of them would be excluded;
    • on the least migration-friendly model (the Tier 2 approach currently used for non-EU migrants), 93% of them would be excluded.
  • The fragmented character of the industry, in which a large proportion of workers are self-employed, makes events like Brexit and its impacts harder to manage.
  • Individual EU migrants – particularly the self-employed – are likely to decide whether to stay in the UK based on factors such as:

    • fluctuations in the value of sterling (and the consequent impact on the value of their earnings/remittances);
    • the costs and hassle factor of applying for post-Brexit residence documentation (which will be necessary if they are to retain the right to work in the UK after 30 June 2021).
  • In terms of construction sector policy, the government "has a plan", but it is a long-term one based around technology. (So, for example, it is planned that future new builds will include a much greater proportion of components made off-site.) Being a long-term plan, this will not show results for another 10 years or more.
  • The work being done by the independent Migration Advisory Committee for government on Brexit labour market impacts is important (and likely to be influential). Their final report is due in September 2018.

Jessica Pattinson, Head of Immigration, Dentons

  • Employers can help affected employees through the process of applying for residence documentation in the UK by:

    • alerting people to what they need to do and helping them with the application process;
    • paying the application fee (which is likely to be £75 per person, so quite expensive for families);
    • providing access to technology including Android phones (HMG's specially designed "app" does not work on iPhones so will be inaccessible to half the population).
  • It is important for employers to think about the range of employees affected. Many employers do not have systematic records of the nationality of their employees. Collating this information might not be a straightforward exercise: it will involve lateral thinking (for example, whether to include the Italian national seconded to Bahrain for two years).
  • It is in contractors' interests to help their sub-contractors navigate the application process.

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries. www.dentons.com.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions