A key issue for the food and drink sector is being able to recruit and retain the right staff with the right skills _ see the Food and Drink Federations (FDF) report on Economic contributions and growth opportunities. On the (potential) cusp of Brexit, this issue is in the spotlight more than ever. The food and drink sector has been able to benefit from the flow of EU nationals into the UK for many years. It is therefore critical that the sector be aware of the changes to immigration policy that Brexit would be very likely to cause.

The growing skills gap

The FDF recently responded to the Migration Advisory Committee's call for evidence (see page 352) on the UK's Shortage Occupation List. The FDF response highlighted its concerns about labour shortages in the industry and the need for foreign labour.

The response also noted that, while the food and drink industry faces labour shortages across the whole skills spectrum, the FDF's research indicated that a particular shortage of people to carry out 'low skilled' jobs was being exacerbated by the decline in EU migration since the Brexit referendum. The FDF observed that EU citizens have typically been more willing to take on manual roles within the food and drink industry, but because fewer EU nationals are now coming to the UK the impact of reduced EU labour was being felt even before any post-Brexit immigration rule changes.

The Government's proposed immigration policy changes, to be introduced following Brexit (whether with or without a deal) would have a significant impact on the sector. The UK Government recently announced that one million people have been granted settled or pre-settled status under the 'Settlement Scheme' established for EU nationals who wish to remain in the UK. While that scheme provides protections for EU workers in the UK, employers are now facing the reality that access to the European labour market could become far more restrictive in the not too distant future.

Where are we currently?

Until now, EU nationals have been able to come and go - moving freely within the EU with flexibility to live and work wherever they like. UK food & drink businesses have benefitted from that flexibility and the ability to access the EU labour market easily without any restrictions. Under the current rules, UK employers can employ EU, EEA and Swiss citizens without any prior visa or work authorisation. This is vastly different to the points-based system for non-EEA nationals, who must be sponsored by employers _ a process which is costly, administratively burdensome and limited in terms of the jobs that are eligible (they must be sufficiently skilled and paid above a salary threshold).

So what might the UK immigration system look like after Brexit?

That depends partly on whether the UK leaves the EU with or without a deal and partly on the way in which the future immigration system evolves.

If the UK leaves with a deal, the Settlement Scheme would apply to EU, EEA and Swiss nationals coming to the UK before 31 December 2020. This would mean the food and drink industry continuing to have free access to the European labour market until at least that date.

However, in a 'no-deal' scenario the Settlement Scheme would not apply to anyone entering the UK after 31 October 2019. Currently, it is anticipated that EU, EEA and Swiss citizens would still be able to arrive at the UK border without prior authorisation for initial stays of 3 months (although the UK Government has recently indicated that a new 'criminality threshold' will apply and that there will be new border controls). However, after that initial period of leave they would have to apply under the European Temporary Leave to Remain Scheme (Euro TLR). Leave granted under this scheme would be for a maximum of 36 months, meaning workers would need to leave the UK at the end of that period unless they were eligible for some other visa. The food and drink industry would therefore continue to have access to the EU labour market, but on a more restrictive and potentially more short-term basis. It is of course possible that further changes to the European Temporary Leave scheme may be announced in the coming weeks.

The future immigration system intended to apply from 1 January 2021 is currently subject to consultation, but it is not anticipated that lower skilled roles will be eligible for sponsorship when that new system comes into force. The food and drink sector may therefore have to rely on temporary leave schemes to fill lower skilled roles in the future. Even if there is to be a Brexit deal, the new single skills system would formally bring an end to EU migration as we know it. While the new system is expected to cover both medium and high skilled roles, it is likely to work in a broadly similar way to the current points-based system. Putting in place a sponsor licence may be advisable for those who may need to recruit medium and higher skilled jobs in the future.

The Government has also announced that it intends to open a low-skilled visa category. However, this will provide visas for low-skilled work for a maximum of 12 months only _ after which the worker will have to leave the UK and will be unable to return for another 12 months.

How can businesses prepare?

With Brexit fast approaching (at least potentially), employers should communicate with their EU workers and encourage them to apply under the settlement scheme. Employers may also want to consider what options they would have under the Euro TLR scheme that would apply in a 'no-deal' scenario, and under the new system to come into force in 2021.

For queries, please contact Elaine McIlroy. We are delivering workshops for employers and their EU nationals on the implications of Brexit. For details please contact your usual Brodies contact.

The theme of Brodies Food & Drink Conference 2019 is New Markets: New Opportunities. The conference will provide an engaging forum to discuss exciting new opportunities and growth areas for the sector. For more information and to register your place please click here.