A new points-based immigration system was launched on 19 February 2020 and will begin on 1 January 2021. Kimberley Clayton, from our Employment Team comments “At the moment, workers from European Economic Area countries have an automatic right to live and work in the United Kingdom no matter what their salary or skill levels are. The government have announced that the current system will end when the eleven-month Brexit transition finishes on 31 December 2020. The government have said they will replace free movement with the introduction of a new system and are hoping to attract high-skilled workers to the United Kingdom to contribute to the economy, communities and public services.
The new system will assign points based on an individual’s skills, qualifications, profession and the salary on offer, and a visa will only be granted to those who receive 70 points. The definition of a skilled worker will be broadened so individuals educated to A-level will be included, and carpentry and high vacancy roles such as nursing and childminding will also be added to the skilled category. Other jobs, such as waiting tables and farm work, will no longer fall into the skilled category under the new system.”
The impact of the proposed points-based system is a concern for a number of industries who have stated that these new rules will have a significant impact on their business and trade. The new system will limit the number of low-skilled workers moving to the United Kingdom and industries including transport, warehousing and food processing will be left dealing with a shortage of vital workers.
The Freight Transport Association have said that this system will add to an existing shortage of HGV drivers. This is because the drivers are classified as level 2 or unskilled workers, even though their average salary is above the new lower general salary threshold of £25,600. Around 13% of HGV drivers are currently recruited from the EU, and the Freight Transport Association say a further 59,000 drivers are needed. The new system will also have an impact on warehousing, as there are currently not enough forklift truck and van drivers.
The government have stated that to reduce the reliance on workers from outside of the United Kingdom, businesses should consider increasing their levels of pay and reducing low paid jobs by investing in automatic equipment.
The supply chain is increasingly turning to automation to provide some of the answers to labour shortages. With the leading materials handling equipment manufacturers all reporting strong order books, particularly for automated equipment, is this the solution to overcome a reducing labour pool? We put the question to Murray Gibson of Murray Gibson Associated Limited, a supply chain consultancy business specialising in solutions architecture;
“Automation has a significant part to play in reducing the overall supply chain dependence on labour, but is not a panacea. There are many areas where it would not be efficient or profitable to replace people with robots or automated equipment. Driving jobs are the obvious one where despite some encouraging trials we are still some way off a scalable, repeatable and above all safe, autonomous delivery model.
For 3PL’s it’s the return on investment which is the limiting factor, where contract terms with their customers are typically three to five years. This is an improvement over the recession years, but still shows a lack of confidence and commitment from those seeking to outsource their services. With implementations of automated handling solutions typically taking between twelve and eighteen months, this only leaves three and a half years at best to realise the return on an investment.
With more certainty of their future, some brands, multiples, retailers and manufacturers are taking the handling and storage services back in-house and making the capital investments in automation that will yield the necessary returns and reduce their dependence on labour across their supply chains. There is a downside however, where an over-dependence on automation may result in an inability to be able to react quickly to changes in the market. Nowhere is this better demonstrated than the online sector where ‘disrupters’ can change the way in which the industry is obliged to either react, or be left behind. The greatest disrupter of them all of course is the consumer.”
This highlights that the introduction of automation will not assist every type of industry with their labour shortages and some low-skilled workers, such as HGV drivers, cannot be replaced by machines. A number of businesses are already struggling to recruit the workforce they crucially need and the lack of workers in those industries mean they need access to overseas workers at all skill levels.
Gotelee Solicitors LLP provide legal advice and support to the logistics sector across the UK, Europe and China. Shortlisted for the Law Firm of the Year for Transport and Logistics (outside London) by the Legal 500 in 2019, the team provide the complete range of legal services, often at a fixed fee. For further information, contact Howard Catherall on 01473 298190, email firstname.lastname@example.org.