The clock is ticking on the UK’s exit from Europe. As things stand, and assuming the government isn’t able to agree an extension to the transition agreement, this will come to an automatic end at midnight on 31 December 2020 and the UK will leave Europe without a deal. What impact will a “no-deal” Brexit have on care providers?
New Immigration Rules
The most significant, and immediate impact is likely to be on staffing and recruitment. Essentially, from 1 January 2021, the eligibility of certain EU/EEA individuals to work in the UK will no longer be automatic. There will effectively be four tiers of (non-UK) worker for a period between 1 January 2021 and 30 June 2020:
- Workers who were already from outside of the EU/EEA who have a valid visa;
- Workers who are from inside the EU/EEA who entered the UK on or before 31 December 2020 who applied for the EU Settlement Scheme before 31 December 2020;
- Workers who are from inside the EU/EEA who entered the UK on or before 31 December 2020 who have not applied for the EU Settlement Scheme before 31 December 2020; and
- Workers who are from inside the EU/EEA who entered the UK on or after 1 January 2021.
If providers already employ staff in the 1st category, there will not be a huge practical difference. Checks will still need to be undertaken as to right to work which will include ensuring that they have an appropriate visa. In future, providers who wish to sponsor new visa applications will be able to do so for those from both inside and outside the EU/EEA, in largely the same fashion.
The position in respect of category 2 and 3 is a little unusual. Individuals who entered the UK before 31 December 2020 will be eligible to apply for EU Settled Status and assuming they have done (or do) so, there is a grace period until 30 June 2021 to enable applications to be processed. They can therefore continue to work until 30 June 2021, whilst waiting for EU Settled Status. However, if they do not apply before 31 December 2020, they would no longer be eligible (and to continue working would need to apply for a visa under the new rules).
There will therefore be some uncertainty for employers in this “limbo” period as providers may not therefore know whether an employee falls within category 2 and 3 during the period 1 January 2021 to 30 June 2021. Employers will not have the right to ask employees to confirm whether they have applied for EU Settled Status before 31 December 2020 or not.
From 1 July 2021 it should be simpler as non-UK workers will all need to prove that either they have EU Settled (or Pre-settled) status, or a working visa granted under the new immigration rules (or pre-existing visa rules if they were in category 1, or other visa rules if they qualify to work in the UK under a different route).
Practical steps for Providers
In the immediate term, providers might wish to encourage EU/EEA staff who have already entered the UK to apply for EU Settled Status if they have not yet done so, and to do so before the 31 December 2020 and explain that they should be automatically eligible to apply, but if they do not apply before that deadline, it will be too late. Employers should not try and force employees to apply if they do not wish to.
As employers cannot enquire whether staff have applied for the EU Settled Status in the “limbo” period, it may be prudent to ask new non-UK staff at least when they entered the UK. If it was not before 31 December 2020, they then would not have be eligible to apply automatically for EU Settled Status and therefore a provider need not be concerned that they might have an application pending for EU Settled Status. Providers will at least then have a better understanding of whether further eligibility to work checks will be required.
The Government has provided guidance on the new rules, which it promises to update as we get nearer Brexit. Providers would be well advised to keep an eye on the updates and to ensure that their HR teams are up to date with the new rules, and keep abreast of the guidance as it comes out.
If providers do expect that they will want to recruit from overseas and become a sponsor for the purposes of the new immigration rules, they will need to become an “approved sponsor”. This can take time and money and will require an application to be made. Providers can expect that the application will increase the costs of recruitment significantly but if they do plan to recruit from overseas, it may be prudent to make the relevant application(s) to be an approved sponsor now so they are ready to support sponsorship applications under the new rules from 1 January 2021.
Recruitment & staffing challenges
From a practical perspective, the new rules will almost certainly create recruitment challenges for providers. Most care staff and housekeeping staff (particularly at the lower paid end) will not be eligible to apply for a visa under the new “points based” system. Most senior care staff will be excluded from eligibility due to the minimum wage threshold of £20,400. Neither are included (currently) on the shortage occupation lists which might otherwise enable them to qualify for a visa. It is therefore likely that the pool of available (and affordable) EU/EEA staff from which Providers can recruit will reduce.
Providers are likely to be facing increased staffing costs going forwards. They would be wise to review staffing budgets (whether or not they intend to recruit non UK staff now or in future) and consider whether there is any scope for increasing these for the years to come.
On a side but related note, the sector continues to await the long awaited Supreme Court judgement in the “sleep-in workers” case. This case relates to whether workers on “sleep-in” shifts are deemed to be working for the purposes of the national minimum wage. We were promised a judgment in July but this has been delayed (we suspect because the Supreme Court understand that the sector does not need a significant judgment at present). In the event that the appeal is unsuccessful (and workers are classed as “working” for minimum wage purposes during the hours they are on call and need to be awake, as found by the Court of Appeal) providers who use “sleep-in” night staff may face a significant additional bill for backdated wages on top of any increase brought around by changes in immigration status which is likely to put even more pressures on staffing budgets in future. As soon as that judgment is out, it should also be considered, and factored into any staffing budget review.
Other impacts
Outside of staffing and recruitment matters, providers are likely, along with everyone else, to encounter a period of uncertainty and disruption following Brexit. Whilst much of the care sector is national in focus, and therefore less susceptible to disruption from EU level changes than some other sectors might be, there are still likely to be knock-on effects for providers due to the wider effects that Brexit (and particularly a no-deal Brexit) is likely to have in other markets.
For example:
- There will be changes which relate to prescriptions which might impact on the ability of pharmacists to prescribe certain medications, or there may be delays in supplies;
- There will be changes to the licencing of medications and supplements which may impact on the availability of and licencing arrangements for certain food and health supplements;
- There may be changes in “equivalence” standards for certain products used in care services, such as PPE, electrical equipment, medical equipment which will mean that supplies are no longer suitable;
- There are likely to be disruptions in supply chains of goods which are imported from (or via) the EU/EEA due to increased border control requirements and checks;
- There are likely to be increase in prices in certain goods because tariffs may apply where they would not have before on goods imported from (or via) the EU/EEA.
These are all, indirectly, likely to affect care providers in their day to day business. How these will manifest themselves – and whether the effects are all negative – remains to be seen, but it is expected that there will be delays in supply chains and increased costs.
Unfortunately for providers, we are very much in a wait and see territory. Much of how Brexit pans out will be entirely outside of providers’ control and it may well be that all directly affected sectors have prepared well. In that case, aside from challenges around staffing and recruitment, there might not be significant disruption to providers from 1 January 2021 but we cannot assume that will be the case. It therefore might be prudent, time permitting, for Providers to consider the following over the next six weeks:
- Keep an eye out for updates and guidance from the HSE, CQC and other recognised bodies on how the sector is being impacted, and what support may be available;
- Check (particularly major) supply contracts, particularly those with government bodies or authorities (such as CCGs) and which are with non-UK companies (if any) for any red flags which might indicate disruptions in products or services being supplied;
- Contact suppliers and ask what plans they have in place; what disruption they consider is likely (or not) and what contingency plans they have in place. They will only be able to tell you so much, but may help you assess the likelihood of disruption;
- Contact GPs and Pharmacies and ask what plans they have in place; what disruption they consider is likely (or not) and what contingency plans they have in place. Are they, for example, stockpiling supplies or offering longer prescriptions? And
- Have contingency plans in place in the event that supplies dry up; consider, for example medication stock management, or looking into alternative suppliers as a back-up.
Larger providers in particular may also encounter bigger legal and practical challenges in the medium to longer term, as we start to see more divergence between the UK and the EU legal and regulatory regimes, which have until now been closely linked (such as Competition, Data Protection and Intellectual Property matters) but these are beyond the scope of this article. Larger providers would be prudent to seek specialist advice to consider the impact of a no-deal Brexit on their operations more widely, so that they can plan accordingly.
In any case, providers are reminded that irrespective of what happens on 1 January 2021, their regulatory obligations will not fall away. Providers will be required to ensure that they continue to meet the relevant regulations. Providers may need to make changes, or have in place contingency plans to react to Brexit to maintain compliance with the relevant regulations including, but not limited to, Regulation 18 (safe staffing), Regulation 12 (safe medication management) and Regulation 15 (safe equipment) of the Health and Social Care Act 2008 (Regulated Activities) Regulations 2014.
In the event that Brexit puts any of a provider’s ability to comply with these (or any of the other relevant) Regulations at risk, or looks likely to impact providers across the sector, this is likely to pique the CQC’s – and possibly safeguarding authorities’ – interest and encourage them to start putting services – and potentially a provider’s entire portfolio of services – under heavy scrutiny.
We are very much in a watch this space territory and the Brexit goalposts might still move before Brexit happens. Providers will, to some extent, need to deal with Brexit (and its fall out) as it happens but they can at least take steps now to be better informed. The better informed Providers are, the better prepared they can be and hopefully be in a better place to manage a no-deal (or deal) Brexit, with the minimum possible disruption and plan for any changes which may be required to ensure future regulatory compliance.
If providers have any concerns or require advice about how Brexit may affect them or the sector or on how to ensure regulatory compliance through Brexit and beyond, Ridouts can assist. Please contact us on 0207 317 0340 or request a call back via our website.
