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Deal or No Deal - What does Brexit mean for UK Employers?

The dreaded “B-word” has been on the nation’s lips since June 2016, with negotiations now set to take us past the initial deadline of 29 March and through to at least 31 October 2019. 

So far, Brexit has resulted in debate and controversy at every step, giving rise to both a Conservative vote of confidence and a Parliamentary motion of no confidence in the Prime Minister as well as three separate rejections by Parliament of the withdrawal agreement agreed with the European Union. The original Brexit ‘leave date’ has also been extended twice: there is no telling if further delays will materialise.

At Vistra Corporate Law, a regulated law firm and a part of the wider Vistra family, we are already thinking ahead. Uniquely positioned to provide integrated legal services alongside our other client offerings, we provide specialist advice in the areas of Employment, Corporate and Commercial law and ensure we are at the forefront of legal developments across the EU.

Brexit has led to sustained uncertainty for employers of all sizes. If you need advice or assistance, we will be more than happy to help.

Where are we now?

As things stand, the UK is set to leave the European Union on 31 October 2019 with no deal in place. This is subject to the government agreeing amendments to the existing deal with the EU or convincing Parliament to vote in favour of a deal they have already rejected.

Cross-party talks are currently being held between the Conservative and Labour parties in an attempt to tailor a proposal which would be acceptable to Parliament. However, any proposal would need to be agreed with the EU, who so far have been staunch in their position that the only deal is the one currently on the table.

The reality is that if no agreement can be reached with the EU that Parliament will accept then No Deal Brexit remains a possibility.

What does Brexit mean for UK Employment Law?

All current employment legislation will still apply post-Brexit, courtesy of the European Union (Withdrawal) Act 2018. The Act states that all direct EU-derived legislation in operation prior to the date of exit will remain in place following that date. Accordingly, EU derived laws, such as the Working Time Regulations, will continue to be applicable to UK employees.

However, immigration rules are set to change. In 2018, the UK government published a white paper which envisions how EU and non-EU nationals (as well as their families) will work in the UK in the scenario that the UK leaves with a deal. 

What changes to UK immigration would the current Deal bring?

The current Deal, if accepted, would end free movement as we know it after an initial transitional period, extending to 31 December 2020.

After this date, the current agreement that allows EU citizens to move freely between European countries would no longer include the UK. Concerns have been raised regarding the status of EU Nationals already residing in the United Kingdom, as well as those who intend to move to the UK following the triggering of Article 50.

In response to this, the UK government has proposed the EU Settlement Scheme whereby EU nationals that are already in the UK or will arrive before 31 December 2020 can apply for Settled or Pre-Settled status. This scheme is fully operational as of 30 March 2019, and the criteria for applying are as follows:

  • Settled Status (or ‘indefinite leave to remain’) is available to EU citizens, EEA nationals and Swiss nationals who have been UK residents for at least 5 years. Continuous residence must be proven to meet the criteria for this, including not being absent from the UK for more than 6 months in any 12-month period without genuine reason (e.g. serious illness, pregnancy or compulsory military leave). EU citizens who obtain Settled Status are then able to stay indefinitely.
  • Pre-settled Status (or ‘leave to remain”) is available to EU citizens, EEA nationals and Swiss nationals who have been UK residents for less than 5 years. By obtaining Pre-settled Status, such individuals are entitled to remain in the UK until such time as they meet the 5-year residency requirement for Settled Status, which they can then apply for. 
     

From 30 March 2019 applications are now free.  The application for either status can be completed via a smartphone application or online up to a deadline of 30 June 2021. 

Family members can also apply for Settled or Pre-Settled status and should do so at the same time as the qualifying EU National to whom they are related. 

What would No Deal mean for UK immigration?

In the event that the United Kingdom leaves the EU without a deal on 31 October 2019, freedom of movement will end as of that date. The impact of this for EU nationals will be as follows:

  • EU nationals already residing in the UK before 31 October 2019, have up until 31 December 2020 to apply for Settled or Pre-Settled status.
  • EU nationals who enter the UK after 31 October 2019, will be permitted to stay in the UK for up to 3 months, provided have secured permission to work or study.

After the expiration of this period, such EU nationals may then apply for European Temporary Leave to Remain (ELR), which will allow them to stay in the UK for 3 years. However, ELR is not a guaranteed route to permanent residency in the UK. In summary, leaving the EU without a deal would mean tighter deadlines and procedures for EU nationals entering the UK after the exit date. Considering that No Deal remains a possibility, it is important to plan ahead when it comes to your employees so that these increased restrictions do not become an issue for your business.

What steps should UK employers be taking?

We recommend that employers take the following steps to reassure and retain their talent:

1.    Undertake a full audit of the workforce to identify who is impacted by Brexit.
This should be carried out as a matter of urgency. Often overlooked are the family members of European nationals – for example a US national working in the UK as the family member of a European national.

2.    Take an active role in encouraging employees to consider their status.
Encourage employees to consider their status and help them apply for the most appropriate documentation.

3.    Offer practical support and resources to employees. 
For example, hosting information workshops put on by immigration experts to provide up-to-date information. The government’s EU Settlement Scheme toolkit provides factsheets, posters and videos for employers to raise awareness among their staff. 

4.    Undertake full right to work checks on your employees.
In the event of a no-deal, employers should be diarising right to work checks for October 2020. 

5.    Consider your talent pipeline on an urgent basis.
If there are key staff or new recruits in the pipeline, they may need to be brought in to the UK by 31 October 2019, particularly in the event of a no-deal. Even in the case of a deal being agreed, it should be arranged for these individuals to enter the UK by 31 December 2020 at the very latest, to make use of the EU Settlement Scheme.

The Brexit process will almost certainly remain unpredictable for some time to come. However, transitional arrangements for EU nationals who wish to work or continue working in the United Kingdom have been implemented in the short term. The emphasis is on the employer to make use of the EU Settlement Scheme and to move as quickly as possible to retain and recruit EU national employees who will be key to the continued success of their business.

If you would like to discuss your business’s specific Brexit requirements or advice on the particular steps you should be taking, please email Victoria McMeel, a solicitor and Director of the Vistra Corporate Law Employment team, at: Victoria.McMeel@vistra.com

 


Authors:

Victoria McMeel - Vistra Corporate Law, Director, Solicitor

Edward Smith - Vistra Corporate Law, Associate, Paralegal
 

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