Brexit and EU Workers

Unless you have been hibernating for the last few years the chances are you will have heard of this thing called Brexit!

In case you haven’t – check out the below for a quick run-down of what it is (a very basic guide!) and what this means if you’re a business with EU national employees.

What is Brexit?

Brexit is short for “British exit” – and is the word people use to talk about the United Kingdom’s decision to leave the EU (European Union).

What is the EU?

The EU is a political and economic union of 28 countries which trade with each other and allow citizens to move easily between the countries to live and work.

The UK joined the EU, then known as the EEC (European Economic Community), in 1973.

Why is the UK leaving?

A public vote – called a referendum – was held on Thursday 23 June 2016 when voters were asked just one question – whether the UK should leave or remain in the European Union.

The Leave side won by just 52% to 48% – 17.4m votes to 16.1m – but the exit didn’t happen straight away. It’s due to take place on 29 March 2019.

What has happened so far?

The 2016 vote was just the start. Since then, negotiations have been taking place between the UK and the other EU countries.

The discussions have been mainly over the “divorce” deal, which sets out exactly how the UK leaves – not what will happen afterwards.

This deal is known as the withdrawal agreement.

What does the withdrawal agreement say?

The withdrawal agreement covers some of these key points:

  • How much money the UK will have to pay the EU in order to break the partnership – that’s about £39bn

  • What will happen to UK citizens living elsewhere in the EU, and equally, what will happen to EU citizens living in the UK

  • How to avoid the return of a physical border between Northern Ireland and the Republic of Ireland when it becomes the frontier between the UK and the EU

A length of time, called the transition period, has been agreed to allow the UK and EU to agree a trade deal and to give businesses the time to adjust.

That means that if the withdrawal agreement gets the green light, there will be no huge changes between 29 March 2019 and 31 December 2020.

Another, much shorter, document has also been drawn up that gives an overview of what the UK and EU’s future relationship will be in the longer term.

This is the political declaration. However, neither side has to stick exactly to what it says – it is a set of ambitions for the future talks.

How did MPs vote on the withdrawal agreement?

They voted overwhelmingly to reject the deal on 15 January by 432 votes to 202 – a huge defeat.

What happens now?

Prime Minister Theresa May is talking to the EU in an attempt to get some changes to her Brexit deal.

This comes after MPs put forward some suggestions to try and change the direction of Brexit.

It means Mrs May is now focused on sorting out a row over Irish border arrangements.

The problem? The EU says it has already negotiated a deal.

Mrs May has said MPs will be able to have a second vote on a Brexit deal by 12 March.

If MPs reject her deal again, they will then be asked to vote on whether they would like to leave the EU without a deal instead (they are expected to say no to this).

If they do reject that option, UK will either leave the EU on 29 March without a withdrawal agreement – or that departure date will be delayed.

If they back the deal, the UK will leave the EU on 29 March but things will stay broadly as they are until December 2020, while the two sides thrash out a permanent trade deal.

Will the UK definitely leave on 29 March 2019?

It is written into law that the UK will be leaving on that date at 11pm UK time.

But it is impossible to say with any certainty what will happen next.

The deadline of 29 March could definitely be extended, though.

MPs could be given the choice to vote on whether to delay this date if they vote neither to accept Mrs May’s deal nor to exit without a deal.

But what happens if they do vote for a delay is not yet clear.

What happens if the UK leaves without a deal?

“No deal” means the UK would have failed to agree a withdrawal agreement

That would mean there would be no transition period after 29 March 2019, and EU laws would stop applying to the UK immediately

What will ‘no deal’ mean for EU nationals?

In the event of no deal, there will be no formal transition period. This will mean that EU nationals who are currently present in the UK are at risk of losing their EU-derived rights to live, work and move freely after 29 March 2019. To obtain new rights to remain in the UK, EU nationals and their family members will need to apply under the EU Settlement Scheme (“Scheme”) by 31 December 2020.

Whilst the Home Office and the Department for Exiting the European Union (“DExEU”) have attempted to offer assurances to those already residing in the UK in the event of a “no-deal”, the status of EU nationals who arrive in the UK between 30 March 2019 and 31 December 2020 remains unclear.

This is a crucial period as those EU nationals will not qualify to obtain new rights under the Scheme as they will not be present in the UK on 29 March 2019. However, they will also not be subject to the new UK Immigration Rules scheduled to be implemented from 1 January 2021.

How will this work in practice?

It will be practically impossible for the Home Office to distinguish between EU nationals (and their family members) who qualify under the Scheme but have yet to make an application and EU nationals who do not qualify under the Scheme having arrived after 29 March 2019.

Reading between the lines, it appears there will be some type of “deemed leave” in which the Home Office will treat such EU nationals as having permission to live and work in the UK but not eligible for settlement under the EU Settlement Scheme.

The DExEU policy paper states that EU nationals will be able to continue using their passports and ID cards for employment purposes until 31 December 2020. This effectively replicates freedom of movement and the right to work for EU nationals until the end of 2020, without formally having a transition period in place.

What next?

Employers should take this small window of opportunity to fine-tune their contingency plan for the transfer of key EU national executives and employees to the UK before 29 March 2019 in the event of a no-deal Brexit.

For any employees who will transfer to the UK after 29 March 2019, employers should be flexible and ready to adapt to any new proposed rules limiting their right to work in the UK that may come into place before 1 January 2021.

For information on the EU settlement scheme, how the application process works and key facts: EU Settlement Scheme Briefing

BHR is an independent HR Consultancy that offers an ethical, practical and commercial approach to HR services. If you would like to access on-going support on issues around Brexit, GDPR obligations for employers or the full range HR support Services contact [email protected] today to arrange a confidential and no obligation chat.

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