While many of us may be more than a little fed up of hearing the term ‘Brexit,’ it is sadly one that will continue to dominate headlines in the year ahead as our departure from the EU has so many potential implications across many industry sectors.
The oil and gas sector, where the global price of crude is the abiding issue, may be less impacted by Brexit but it too may be significantly affected by any forthcoming changes that might affect the movement of EU workers.
As we are only a few months from triggering Article 50 and beginning real negotiations over the terms of EU withdrawal, immigration remains a huge area of uncertainty, presenting potential difficulties for oil and gas companies in terms of workforce planning and budgeting.
The Prime Minister has made clear that controls on EU immigration will be a key priority but has also vowed that this will not impact on the recruitment needs of UK business. However, while we do not have any details of how this might work in practice, putting in place controls on the immigration of skilled EU workers into the UK, as non-EU skilled workers are already subject to, is likely to come at a cost to all companies which rely on foreign talent, including those operating within the oil and gas sector.
Even if businesses will be able to continue accessing skilled workers from the EU, as Prime Minister Theresa May has indicated, it seems inevitable that the tighter controls that would result from the end of free movement would increase administration costs. Despite the current lack of clarity, this will need to be included within cost and resource forecasting and could impact on North Sea investment decisions in the short and medium term, another potential setback to the sector at a challenging time when budgets are tight and margins are being squeezed.
If future, post-Brexit immigration systems implemented are overly bureaucratic, the fast pace nature of business within the oil and gas sector may also be adversely impacted if companies are unable to make swift recruitment decisions regarding EU-based talent.
In the interim, companies with EU workers may wish to support them in safeguarding their rights to remain here by helping them apply for permanent residence or a registration certificate in the UK. Employers must equally manage the process carefully and avoid failing to accommodate an EU employee because their UK worker status may be revoked in future. This may well give rise to discrimination claims.
The North Sea has always relied on a mix of both local and imported talent to drive it forward. To remain at the cutting edge of oil and gas exploration and extraction, and continue to be considered a global centre of excellence in the industry, it will require on-going easy access to foreign expertise.
Given the significant economic importance of the oil and gas sector, this is another detail of Brexit where the Government needs to provide greater clarity and, let’s hope, some reassurance.
Alison Woods is partner at law firm CMS
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