Most construction and energy industry companies are making that may result in them losing their EU migrant workforce this summer and how to fix them in 3 easy steps.

A guide for CEOs and CFOs of construction and energy companies.

This is the first of a two-part guide which focuses on the four biggest mistakes that the vast majority of construction and energy industry companies are making that may result in them losing their EU migrant workforce this summer. When you have learnt about the mistakes in this part one, part two of the guide (which will follow shortly) will show you how to fix them in three easy steps.

You Should Read This Guide If:

  • You are a CEO or CFO of a construction or energy company with overall responsibility for commercial strategy, finance or HR.
  • You use EU migrant labour.
  • You are concerned about the existing labour shortage (which will be exacerbated this summer), which will make projects more difficult, expensive, time-consuming or, in the worst-case scenario, impossible to deliver.

By The End Of This Guide You Will Know:

  • How the EU migrant labour shortage will impact your business in terms of the resourcing of your workstreams.
  • The four biggest mistakes that most construction and energy industry companies are making that may result in them losing their EU migrant workforce this summer.
  • What you need to do now to make sure you can continue to employ EU migrant labour this summer.

How The Skills Shortage Will Create Problems For You

Brexit has brought changes1 to the recruitment and immigration landscape which will have a huge knock-on effect on the resourcing of workstreams in the construction and energy industries.

The changes will affect your ability to recruit and retain appropriate labour and they will exacerbate the current skills shortage even further when EU citizens who do not have legal permission to remain in the UK will be obliged to return to their home country this summer.

The labour shortage may make some projects more expensive to deliver, projects may become more difficult to progress and completion dates may be put at risk. In a worst-case scenario, projects may become impossible to complete on time. All of this has the potential to affect your bottom line, particularly if LADs are levied.

The majority of construction and energy companies are currently making four big mistakes that will threaten their ability to continue to employ EU migrant labour after 30 June 2021.

These mistakes are as follows:

Mistake #1:Thinking "Brexit has been and gone and EU citizens are still here, so what's the problem?"

The problem is that there has been wholesale change in UK immigration law and brand-new immigration arrangements have been put in place that affect all EU citizens, their family members2 and their employers.

EU citizens who were already in the UK by 31 December 2020 should have made a formal application enabling them to remain in the UK under either: (i) the European Temporary Leave to Remain scheme (Euro TLR), or (ii) the EU Settlement Scheme.

From 1 July 2021, all employers will have to check, at the time of any new recruitment, that all EU citizens they employ have a valid UK immigration status, and not just an EU passport or national identity card.3 Valid UK immigration status will either be under the Euro TLR, the EU Settlement Scheme or sponsorship via the new Points-Based Immigration System.

Mistake #2: Believing there is no rush

It is extremely important to be aware of the fact that there is a cliff edge deadline by when your EU citizen employees or contractors must make a formal application to remain in the UK if they have not already done so. The key takeaway is that all EU citizens should apply to remain in the UK under the EU Settlement Scheme by 30 June 2021 if they do not already have permission to remain under the Euro TRL.

If you are employing an EU citizen who does not have Euro TLR and who does not submit a valid application under the EU Settlement Scheme by 30 June 2021, they will be classed as an illegal immigrant and they may be subject to removal from the UK. As their employer, you would be at risk of the draconian consequences of employing an illegal immigrant (for more on this see Mistake #4 below).

Mistake #3: Letting employees get on and do it themselves

In theory, you could leave your EU citizen employees and contractors to apply for permission to remain in the UK themselves, but this is a very high-risk approach not least because the UK's Immigration Rules are complex even for people who are born and bred in the UK and for whom English is their first language. In the case of the EU Settlement Scheme, for example, the official guidance on applications runs to 135 pages.

If your EU citizen employees or contractors: (i) failed to apply for the Euro TLR scheme prior to 31 December 2020,4 (ii) try and apply for the EU Settlement Scheme but miss the 30 June 2021 deadline, or (iii) hit the 30 June 2021 EU Settlement Scheme deadline but submit an incorrect or technically defective application (in which case there is a high chance it will be rejected), they will be an illegal immigrant and you will be employing them illegally. The risk of your EU employees and contractors getting it wrong is quite high and it is ultimately you who will bear the consequences of any mistakes they make.

Mistake #4: Taking the view that "my EU workers have nothing to do with me"

As an employer, you have legal duties, and there are serious consequences for you personally if your employees get it wrong and they do not obtain the required permission to remain legally in the UK after 30 June 2021.

As a director of the company, you would personally be liable for employing an illegal immigrant. The offence is a criminal one and liability will attach to you if you employ someone you know, or have reasonable cause to believe does not have the right to work in the UK. The penalty is an unlimited fine and a 5-year jail term.

In practice, you could be found guilty if you have any reason to believe that your employee:

  1. was not entitled to enter, or does not have permission to remain in the UK;
  2. their permission to remain has expired;
  3. they are not allowed to do certain types of work; or
  4. their papers are incorrect or false.

Given the changes to the new immigration system were announced before we left the EU in March 2019 and have been widely publicised since, it would probably be an uphill struggle for any director to try and argue that they were unaware of the new regime. This means that a guilty finding would be much more likely and you should take extra care to ensure you comply with the rules.

If you would like to learn more about the Three Steps that you need to take now to avoid making the mistakes listed above, then you can download the remainder of the guide at www.in-houselaw.co.uk/guide.

Footnotes

1. The changes are expected to be rigorously enforced.

2. EU citizen employees and contractors who are in the UK may be accompanied by their direct family members (such as their spouse, civil partner, or dependent children under the age of 18). These family members may also need to regularise their immigration status as the option to come to or remain in the UK must be a viable one for the whole family. Fortunately, permission for direct family members is typically granted in line with the main applicant which means that if the EU citizen employee obtains permission to remain in the UK, we would expect their family members to also obtain permission.

3.The latter two are no longer sufficient to prove they have the right to work in the UK.

4. When the Euro TLR scheme closed.

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.