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The retail industry and Brexit

The retail industry, as with most industries, has faced considerable disruption as a result of Brexit. The retail industry employs large numbers of European nationals, often on zero-hours or short-term contracts. This tends to result in having large numbers of employees, even in relatively small shops or retail outlets.

How will Brexit impact trade with the EU?

As a result of Brexit, the retail industry has faced uncertainty in respect of import and export of goods which may attract tariffs after Brexit and will be subject to customs controls, where that has not been the case previously. In addition, rules and regulations concerning selling to EU markets are likely to change, for example, rules on labelling on chemicals and pesticides, cosmetic products and medicines. The retail industry is also likely to be hit by the proposed VAT threshold of £135 on imported goods that didn’t previously exist.

How will Brexit impact employment?

As well as these difficulties, how the retail industry employs people will change. At present, there are large numbers of Europeans employed in relatively low-level work. Once Brexit occurs, it is unlikely that this employee strategy will be able to continue. Europeans that are currently in the UK, or arrive before 1 January 2021 will not be affected, they will be able to remain in the UK. However, those Europeans already in the UK do need to apply for pre-settled status if they have been in the UK for under five years, or for settled status if they’ve been in the UK for five years or more. The new Immigration Rules following Brexit will allow for low-level workers to come in from all over the world where there is a need identified. This means the Home Office, or more likely the Migrant Advisory Committee will need to find that the retail sector is unable to find employees in the resident labour market, in order for them to authorise workers to be brought in in this sector.

The Tier 2 licence

A Tier 2 licence enables employers to employ workers from outside the European Union. At the time of writing, this licence only allows employment of highly skilled work at degree level. As such Tier 2 licences in the retail industry are less common in smaller or medium-sized businesses than they are in other sectors. Whilst the retail industry generally is unlikely to have a Tier 2 licences in respect of workers on the shop floor, they may have licences to employ workers in more senior positions. Tier 2 workers are employees who are sponsored by an employer in the UK. Businesses with a Tier 2 licence may employ Tier 2 workers, for example as purchasing managers, human resources managers or directors, or in the finance side of retail, for example, finance directors.  

For almost all of the likely types of employees in the retail sector, it is likely that a resident labour market test will need to be carried out. The only exception to this is likely to be in the IT segment of the retail industry, for example in web design or IT support where there are roles on the shortage occupation list. 

It may be that businesses that operate in the retail sector will need assistance in applying for licences in order to employ overseas workers. This is a sector that will have had very limited contact with government-regulated employment from overseas previously. Businesses in the retail sector will need to prepare themselves for needing to take on employees from overseas and will need to set up the systems that enable them to do this before they reach crisis point in terms of employment numbers.

Securing hundreds of Tier 2 visas

Westkin Associates has secured hundreds of Tier 2 visas as well as sponsorships for our clients. For more information on how we can help you call our offices at 020 7118 4546 or email info@westkin.com 

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