BREXIT: 'Contingency planning' needed by UK businesses reliant on EU workers, expert says

This is part of Out-Law's series of news and insights from Pinsent Masons experts on the impact of the UK's EU referendum. Watch our video on the issues facing businesses and sign up to receive our 'What next?' checklist.

Construction, IT and retail businesses that have not already done so should be reviewing their workforces to establish the extent to which they rely on EU workers for their UK activities, and the extent to which they require UK nationals to move between offices and facilities within the EU, according to immigration expert Joanne Hennessy of Pinsent Masons, the law firm behind Out-Law.com.

In a referendum yesterday, 52% of the votes cast were in favour of leaving the EU.

Hennessy said that businesses could "take some comfort" in the fact that any changes to free movement of labour within the EU would not be immediate. Under EU rules, the UK would leave the EU two years after it officially gives notification of its intention to do so. At the same time, freedom of movement "may ultimately be negotiated in exchange for free movement of goods" as part of a new trading relationship between the UK and EU, Hennessy said.

"The worst case scenario is that a proportion of your workforce will have to leave the UK," she said.

"If free movement is removed or restricted, it would become more difficult for employers to recruit from the EU and, potentially, retain the employment of existing EU nationals. Employers should also consider what contingency plans they have in place to fill roles and address skill shortages in this scenario. Do they have other staff settled in the UK who can fill these roles if needed?" she said.

Immigration to the UK by workers from outside the European Economic Area (EEA) is generally limited to those in skilled or highly skilled work only. Tier 2 of the points-based immigration system, which is the main route into the UK for highly skilled migrants, is limited to skilled roles and salary thresholds apply.

Hennessy said that it would be a "significant shift from the status quo" should the UK limit recruitment of EU nationals to the same criteria. The government would also come under pressure to review its shortage occupation list, and potentially the salary thresholds, to recognise the impact a restriction on freedom of movement would have on industries already struggling with severe worker shortages, she said.

"Any new salary thresholds for immigration into the UK could particularly impact on industries healthy reliant on EU labour such as construction, retail, hotels and leisure," she said.

"As well as increased salaries, any system requiring visas for EU nationals to work in the UK, and vice versa, will significantly add to the cost and red tape involved in employing such people: it's becoming steadily more expensive to employ non-EEA nationals, and if the same approach was applied to EU nationals that may price some businesses out and exacerbate skills shortages," she said.

In the meantime, businesses could also encourage those workers essential to their business to apply for permanent residency or citizenship to try and safeguard their status in the UK as far as possible, Hennessy said. However, this could also be a "costly and time-consuming process", she said.