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          Food 2019: Labour supply - what does the future world of work look like?

          What does the future world of employment look like? What impact will the Good Work plan have on UK businesses? What impact will Brexit have on labour supply? We look at some of the key issues facing UK employers and highlight proactive steps which can be taken now to ensure a labour shortfall does not impact on your business.

          Date: 04/01/2019

          The UK food sector saw substantial challenges in recruiting and retaining the best talent in 2018, that picture does not appear to be changing in 2019 causing clients to consider innovation and new ways of working in order to mitigate those risks. 

          We will look at some of the main issues facing UK employers and provide some practical, proactive steps to take now to ensure labour supply does not disrupt your business.  Inevitably, the world of work is changing, this is nothing new, but the rate of acceleration is unprecedented. Employers need to stay informed and plan ahead to put themselves in the best possible position.  

          The "Good Work Plan" and what it means for UK employers

          The Government launched its Good Work Plan setting out its vision for the future of the UK labour market and how it will implement the recommendations arising from the Taylor Review.  The proposals follow an increase in flexible working arrangements in the UK labour market and include:

          • Giving all workers (not just employees) the right to a written statement of rights on their first day of work (rather than within two months as currently required for employees). In addition, the amount of information that must be provided will be expanded to include additional information such as details of other types of paid leave, for example, maternity or paternity leave.   This amendment is due to come into force on 6 April 2020.  
          • Increasing the protection for agency workers by abolishing the so-called "Swedish Derogation" which enables businesses to pay agency workers less than their permanent staff providing pay is guaranteed between assignments. Employers will have to pay agency workers the same as other employees after a 12-week period. This amendment is due to come into force on 6 April 2020.  
          • Extending the time required to break a period of continuous employment from one week to four weeks. Workers who work intermittently will therefore find it easier to accrue employment protection.
          • Introducing legislation to clarify the current employment status tests applied by Employment Tribunals in order to prevent businesses avoiding their responsibility or misclassifying their staff as self-employed.  
          • Increasing the penalty for employers' aggravating conduct from £5,000 to £20,000.  The increased penalty is due to come into force on 6 April 2019.  In addition the Government has launched a new naming and shaming scheme to deal with employers who fail to comply with Employment Tribunal judgments.   
          • Giving individuals the right to request a "more predictable and stable" contract. 
          • A suggested change to require holiday pay to be calculated over a 52 week period rather than a 12 week reference period.  Amendment due to come into force on 6 April 2020.  
          • Banning deductions from staff tips.  The Government proposes to prevent employers making any deductions from staff tips.  
          • Lowering the threshold required for a request to set up information and consultation arrangements from 10% to 2% of employees. This amendment is due to come into force on 6 April 2020.

          What should employers be doing now?

          The Government has a clear agenda to increase workers' rights, and importantly, knowledge of those rights.  Although there was initial scepticism as to how soon the changes would come into effect, the Government wasted no time in releasing draft legislation.  Employers will need to review and amend working practices to ensure compliance with the forthcoming changes.  Employers should identify which sectors of the workforce will be impacted and start workforce planning now.  

          Labour supply post-Brexit and the future of immigration 

          There has been much concern over EU citizens' rights post-Brexit.  After repeated demands for assurances, the Government set out its plan outlining a "settled status". Essentially all existing EU migrants could apply for "settled status" or "leave to remain" once they had met certain continuous residency requirements.  

          Despite constant reassurances from the Government that it is extremely unlikely we will not reach an agreement with the EU by 29 March 2019, there is still the possibility of a "no-deal Brexit". Whilst times remain uncertain, it is important for employers to focus on what we do know. 

          EU Settlement Scheme update – 6 December 2018

          The Home Office released an update in December confirming that the EU Settlement Scheme will continue to be implemented if there is no deal. This would allow EU citizens and family members living in the UK by 29 March 2019 to secure their status.  

          White Paper on the UK's future skills-based immigration system – 19 December 2018

          The Government published its much anticipated White Paper on the UK's future skills-based immigration system.  The White Paper is drafted on the basis of a deal being reached with the EU.  The key provisions include:

          • Freedom of movement will end on 31 December 2020.
          • Reducing net migration to sustainable levels.
          • Applying the same UK Immigration Rules to all migrants from 2021. 
          • An aim to reach reciprocal agreements for short-term visits and intra-company transfers between UK and EU countries.  
          • A transitional measure for lower skilled jobs, for up to 12 months at a time, with a 12 month cooling off period.  It is not intended that this route would lead to settlement.  

          What should employers be doing now?

          Employers should consider auditing their workforce and updating records to determine if labour supply will be an issue. Even if EU nationals are not employed consider the impact of Brexit on the wider labour market. Employers should provide assistance to EU nationals to ensure they are updated on the latest announcements from the Government.  In addition, employers should consider the impact on any UK nationals they have working in EU countries.  

          Employers should set up a Brexit working group if they haven't already done so. The group can take responsibility for monitoring on-going Brexit issues and updating the wider business. Labour shortfall is very much on the Government's agenda with schemes such as the pilot to bring 2,500 seasonal workers to UK farms from outside the EU being announced in the autumn.  It is vital for employers to stay up-to-date to ensure they can maximise the use of such opportunities.  

          For further information on the impact of a "no deal Brexit" on employment rights please see our Legal Insight.

          Conclusion 

          Labour supply and the future world of work is a key focus for UK employers.  Workforce planning remains a top priority, with post-Brexit uncertainty, the publication of the Government's Good Work Plan and the increased use of technology and innovation.  There is no one fixed point to aim towards, rather an evolving employment landscape.  Employers that are dynamic and able to diversify, we consider, will find themselves in an advantageous position.  

          Find out more about the other big trends facing the food industry this year > 

          Related people

          Charlotte Lloyd-Jones

          • Professional Support Lawyer

          Kirsty Rogers

          • Partner // Executive Partner (Manchester) & Head of Client Development

          Helga Breen

          • Partner // Head of Employment (London)