How Do You Solve A Problem Like Brexit?
With the transition period expiring on 31 December, the prospect of the UK finally leaving the European Union without a deal still remains a very real possibility. Throw in the effects of a global pandemic and these are extremely testing times for the construction industry.
There are, of course, a myriad of new rules and procedures that will come into effect from 1 January 2021. Whilst alas we cannot cover all of these here, please note as an example the changes to recruitment, as EU and non-EU citizens will need to meet certain requirements to work in the UK. If you therefore want to recruit workers from outside the UK to work on construction projects going forwards, you may need to apply to be a visa sponsor. The government has published guidance on how to comply with the new system which can be found here. There will of course be an inevitable increase in the cost of bringing people from the EU to work in the UK. By encouraging any EU staff to apply to remain here now, some of these effects can be lessened. It is imperative that contractors explain to their EU staff what will happen if they lose their right to live and work in the UK in order to ensure that ongoing and future projects can continue to run as smoothly as possible.
Is there anything else that contractors can do to help navigate the upheaval of the next couple of months?
Future Contracts: Bear in mind the ever-tightening margins when pricing jobs to leave breathing room for any increases to the cost of raw materials and tariffs which may arise. Similarly, be sure to factor in extra time for completion of projects which may arise as a result of potential delays to goods at the border. If possible, try to minimise the allocation of risk placed on you under future contracts, particularly in provisions focusing on time, cost and quality, as these may be the areas that are hardest hit by the new rules.
Existing Contracts: Carry out an audit of existing contracts that have any connection to and/or reliance on trade from the EU to identify the possible risks and effects on those projects. We are of course happy to assist with this. It is not always the case that a no-deal Brexit would be a cause for gaining an extension of time or recovering loss and expense – it will depend on the terms of each particular contract. Maintaining good communication with key contacts up and down the chain, even at this stage, will reduce the likelihood of issues arising on projects later down the line.
As we all know, all of the above is still very much a ‘work in progress’ since the Prime Minister is meeting with Ursula von der Leyen at the EU today. Hopefully we will be in a position to provide a further update shortly.
This update is for general purposes and guidance only and does not constitute legal or professional advice. You should seek legal advice before relying on its content. This update relates to the prevailing circumstances at the date of its original publication and may not have been updated to reflect subsequent developments. If you have general queries about our updates, please email: firstname.lastname@example.org