Cleaning is a low margin business, where labour costs represent around 80% of turnover. As ‘D-Day’ approaches, just how prepared are we, as contractors, for the human consequences of Brexit?
The current position as to how Brexit will affect our ability to employ EU nationals is broadly as follows – that’s if we officially leave the EU in March 2019 as planned:
From March 2019, EU nationals who have lived in the UK for five years will be able to apply for indefinite ‘Settled Status’, while those with less than five years can apply for ‘Pre-Settled Status’, tiding them over until they reach five years.
The application process is not onerous, but must be completed by June 2021 when the scheme will close, apart from for those already at the ‘Pre-Settled’ stage.
Free movement of EU workers to the UK, as currently permitted, will end completely when the transition period finishes on 31 December 2020.
Although very few details have been announced, anyone planning to arrive after 2020 will most likely have to apply for a visa, with the possibility of a points system that discriminates against lower skilled workers.
In the event of no-deal, the government has stated that all 3.8m EU citizens in the UK will be allowed to stay, albeit they will formally have to seek the right to remain.
So, whilst on the face of it remaining in the UK may not appear too difficult for existing workers, they will still have to apply, and before that will need to weigh up the pros and cons of remaining in the UK. As for new arrivals post-2020, it’s anyone’s guess as to how the new rules will affect the labour supply. If there’s one word that sums up the whole situation, it’s uncertainty.
Two options spring to mind as to how, as an industry, we might protect our labour supply.
The first is to proactively support staff who wish to remain in the UK. It’s a ‘no-brainer’ to help our EU staff with their applications for ‘Settled Status’. The least we can do is familiarise ourselves with the process and provide support in the form of briefings, newsletters, access to up to date information and help with completion. As representatives of the industry most likely to be affected, the powers that be in cleaning will no doubt look at how they can help here, particularly if for whatever reason it seems we are losing the battle to keep staff.
The second is to make it worthwhile for staff to stay by lobbying for better take up of the Living Wage Foundation (LWF). There is no doubting the value of being able to offer cleaning staff the LWF pay rate of £10.55 in London and £9.00 outside the capital, but it is disappointing that its adoption by employers looks to have slowed – and by that, I mean paying their own staff the LWF, let alone outsourced workers – and that the gap with the minimum wage (NLW) still remains.
I can’t see the present government addressing the LWF/NLW gap, which means we need to work harder at influencing clients to move towards the LWF. How? Well, I believe the best option is for contractors to sign up as LWF Recognised Service Providers. Under the rules of this accreditation, contractors must pay the LWF rate to office staff and managers, as well as encourage clients to fund the LWF for site-based staff. It’s not the end game, but we can at least show clients that we practise what we preach and lead by example.
The fact is that, pending an extension to Article 50, in four months’ time Brexit will hit the employment landscape for low skilled workers with a major broadside. Rather than becoming victims of the process, we should be setting the agenda.
Published in December issue of Tomorrows Cleaning