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What is the Impact of Brexit on Employment?

In the June 2016 referendum, the UK voted to leave the European Union. Since then there have been many concerns about the impact of Brexit on employment.

Our blog will help you become more informed about the potential changes in the UK job market post Brexit.

Post Brexit Employment

The vote divided the nation. It caused 1 in 8 people to fall out with family and friends. One of the main arguments within the debate was the effect Brexit could have on employment. Many suggested that  leaving the EU would lose the UK millions of jobs. Brexiters argue that a Brexit vote would lead to an employment boom.

No-one knows what the future holds for employment in the UK. An article by The Huffington Post describes the future for employment post Brexit.

Although Brexit has had a lot of negativity, employment in the UK has actually increased. In fact, it has been a real success story in recent years. Recent statistics show employment rates at its highest and growth at its fastest. Household earnings have also been rising. This is because more people are finding work and working more hours.

The article goes on to mention 4 reasons why everyone’s outlook on Brexit isn’t more optimistic:

  1. Average incomes have risen, but it has happened at a slow pace. Also, not everyone has benefited from these raised incomes.
  2. People are working more but this isn’t reducing poverty. Most of those in poverty are now in working households, and poverty rates haven’t come down.
  3. High costs, slow earnings and cuts to benefits leave many struggling to afford the basics.
  4. Some parts of the country lag on employment rates, as well as pay. The Government needs a plan to boost growth and living standards in poorer areas of the country.

Recruiting for Jobs After Brexit

Brexit has put significant pressure on recruitment. Business expect to find an increased difficulty in recruiting more senior/skilled staff. The labour market shows this to be true as they have found applications have fallen a lot. There has been a difficulty in recruiting during 2018. The hard-to-fill vacancies has continued to grow.

There have been plenty of concerns expressed about Brexit on employment. Yet, employers looking to increase staff vs looking to reduce staff has recovered. There is an indicator for continued growth, and it is likely there will be a constant demand for labour.

The free movement of goods is good because of trade and trade means jobs. If you’re wondering how EU trade affects the UK and jobs, here are a few facts;

  • Exports from the UK to countries outside the EU support 3,250,000 jobs in the UK
  • Another 722,000 Brits are in jobs linked to exports from other EU countries to countries outside the EU
  • This means 1 in 8 jobs in the UK depends on EU exports
  • British exports to countries outside the EU also support over 335,000 jobs in the rest of the EU

What effect does Brexit have on employability?

One of the main effects of Brexit is limiting the free movement of people across UK borders. This means well educated, intelligent students from the EU will leave the UK after Brexit. With them they take their skills and qualifications. This drains a proportion of the UK’s skilled workforce. 127,000 of the students in higher education in the UK are from EU countries. The UK has 4 of the world’s best ranked universities in the top 10. It attracts many overseas students and academic staff.

It could be discouraging for EU students to apply.  As part of Brexit negotiations, MP’s want overseas students excluded from migration figures. Once they have graduated, they can stay and work in the UK.

Brexit has not damaged employers’ interest in Employing EU migrant workers. Most employers do not consider nationality when hiring. They choose the best candidate for the job.

Yet, there has been a drastic 95% fall in EU nationals joining the UK workforce.

Impacts of EU Membership on Employment Rights

In the UK, employees do not have a right to a written contract of employment. Thanks to the EU directive, employees must get a written statement. The statement sets out their pay and working conditions within 28 days of starting work.

The Working Time Directive introduced a 48-hour working week (averaged over 17 weeks) a daily rest period of 11 consecutive hours, a weekly rest period of 24 consecutive hours and rest breaks during the working day.

Human Rights Act 1998 covers the right to a fair and public hearing; freedom of assembly and association; freedom of expression; freedom of thought, conscience and religion; respect for private and family life.

Other rights include:

  • Maternity rights
  • Parental leave rights
  • Equal pay
  • Data Protection
  • Health and Safety
  • Collective Redundancy Consultation in the Trade Union and Labour Relations Act 1992.
  • TUPE (Transfer of Undertakings Protection of Employment) Regulations 2006

Will we still get to keep these employee rights after we leave the EU?

It is a worry that we would lose the current EU employment rights. But, the UK government would decide to keep these rights. If the UK signs up to the free movement of people, its citizens can work anywhere in the EU. If the UK goes down the work permit route, you would need a visa.

The Impact of Brexit on Employment

One benefit that may be result from Brexit is workforce planning and development. By upskilling current employees, business can address the skills shortage. Early 2018 statistics show 72% of employers have dedicated training budgets.

Although, this is not a guaranteed investment. No one knows what will happen to our jobs once the UK leaves the EU. It is anyone’s guess.