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How will Brexit Affect Businesses? People & Skills

At the GBCC, we want to help businesses be as informed as possible about what Brexit could mean for them so that they are in the best possible place to respond and adapt quickly as the final outcome becomes clear.

Below you will find deal and no-deal scenario based advice based on the latest information at the time of publication. For the latest updates on Brexit negotiations and the Brexit timeline click here.


People & Skills in a No-Deal Scenario

Employing EU Citizens & Working in the EU: No Deal Brexit Scenario Training Video (Module 1)

Shuabe Shabudin, Associate, Pinsent Masons explaining what a no-deal Brexit scenario would mean for employing EU nationals and UK nationals working in the EU and what businesses can do to prepare now.

Carl Hollier, Managing Director, Industrial Washing Machines Ltd sharing how his business have approached preparing for Brexit and supporting EU nationals in his workforce.

Content correct at the time of filming: October 2019.


Deal or No-Deal Q&A

Employment

What do we know so far?

On the 8th of December 2017, the UK and the EU announced that they had reached an agreement on the rights of EU citizens. This forms part of the withdrawal agreement and maintains the rights of EU Citizens currently residing in the UK to be able to live and work on the same basis as now.

The UK Government have introduced an “EU Settlement Scheme” for EU nationals wanting to continue to live, work and access support and institutions in the UK post-Brexit.

If you have employees who are EU citizens, have been a resident in the UK for 5 or more years and intend to stay and work in the UK beyond 31st December 2020 they will need to apply to for Settled Status under the UK Government’s EU Settlement Scheme.

Those who are resident in the UK by 31 December 2020 will have until 30 June 2021 to make an application.

If you have employees who are EU citizens, that have been resident in the UK for less than 5 years and intend to stay and work in the UK beyond 31st December 2020 they will need to apply for pre-settled status. Pre-Settled Status allows EU Citizens to live and work freely in the UK and access public services and funds for five years only. After this, or when they reach their five years of residency, it is expected that they would be able to apply for Settled Status (see above).

The UK Government have released a full employer toolkit explaining the scheme and resources for communicating what it means to your employees. Click here for more details. 

In the event of a “No Deal” Brexit

In a “No Deal Brexit” scenario, the UK Government would be under no obligation to apply any of the elements of the Withdrawal Agreement already agreed upon which includes the rights of EU citizens to settled status in the UK.

However, on the 6th December, the UK Government released a policy paper outlining what would happen to EU citizens living in the UK in a ‘no deal’ scenario. In the policy paper, it states that EU citizens resident in the UK (before the UK leaves the EU) will have their rights protected even in a ‘no deal’ scenario. In this scenario, EU citizens would have until the 31st December 2020 to apply for a status under the EU Settlement Scheme. Click here for more information.

 

 

What do we know so far?

If the withdrawal deal is agreed, your business will still be able to recruit new staff directly from the EU until the end of the transition/implementation period on 31st December 2020. If you were to recruit staff from the EU during the Implementation Period, they would enjoy the same rights and guarantees as those who arrived in the UK before Brexit. They will also be eligible to apply for pre-settled status which would allow them to live and work in the UK after the end of the implementation period (see answer to the previous question for more information on settled status)..

The UK Government has stated that freedom of movement will end after the UK leaves the EU. This means that under the future immigration system, EU citizens will no longer receive preferential treatment over non- EU citizens. The new UK immigration system will prioritise skilled migrants and will be phased in from the end of the Implementation Period. Under the new rules, there will not be a cap on individuals who meet the requirements, but they will need an employer to sponsor them. The new skilled route will include workers with intermediate level skills, at RQF 3-5 level (A level or equivalent) as well as graduate and post-graduate. The Migration Advisory Committee (MAC) has recommended retaining the minimum salary threshold at £30,000 but the Government has said that they will engage with businesses and employers to determine what salary threshold should be set.     

The Government has not developed a specific route for low skilled workers, but as a transitional measure, has proposed a time limited route for temporary short-term workers which will allow people to come for a maximum of 12 months, with a cooling-off period of a further 12 months.

Click here for further information.

In the event of a “No Deal” Brexit

If the UK and the EU fail to reach a formal agreement, the UK Government would be free to determine the UK’s own immigration policy from the date the UK leaves the EU.

In the event of a no deal scenario, the UK Government has announced there will be a transition period until 1st January 2021. During this period, EU citizens arriving in the UK would be able to work for up to 3 months at a time without needing to apply for status. If they wish to work for longer than 3 months, then they will have to apply for European temporary leave to remain. This would enable them to live and work in the UK for up to 36 months from the date their leave is granted. After the 36-month period is up, they would need to apply for an immigration status under the new immigration system. 

Click here for further information on employing EU citizens after Brexit.

What do we know so far?

Under the terms of the withdrawal agreement, UK employees will be to stay in their member state of residence after the UK leaves the EU. During the transition/implementation period, your UK employees will also be able to visit, live and work in the EU on the same basis as now. They will also be entitled to move to a different EU Member State during the implementation period, should they need to do so. However, after the implementation period ends, it is unclear as to whether UK nationals living in EU countries will be able to work across borders in other EU member states. The withdrawal agreement still needs to be ratified by the UK Parliament for it to take effect.

The Government have confirmed that UK nationals covered by the Withdrawal Agreement, may be required to apply for a residency document or status granting their right to reside. If your UK employees are required to apply for residency, they will have six months from the end of the implementation period to submit their applications.

Click here for further information.

In the event of a “No Deal” Brexit

In a “No Deal Brexit” scenario, the EU would be under no obligation to apply any of the elements of the Withdrawal Agreement already agreed upon which includes the rights of UK citizens residing in the EU. While it seems highly unlikely that UK nationals would lose their rights in a no deal scenario, it is important to note that the UK Government cannot unilaterally guarantee them. The decision to guarantee the rights of British citizens abroad lies with each EU member state.

Click here for more information on the status of UK national’s in a no deal scenario. 

What do we know so far?

Under the terms of the draft Withdrawal Agreement, your business will still be able to recruit new staff directly from the UK until the end of the transition/implementation period on 31st December 2020. If you were to recruit staff from the UK during the Implementation Period, they would enjoy the same rights and guarantees as those who arrived in the EU before Brexit.

It is still not clear as to what barriers EU businesses will face when trying to recruit new staff directly from the UK after the end of the implementation period. This will most likely be a reciprocal arrangement between the UK and the EU. The UK Government has stated that freedom of movement will end after the UK leaves the EU and that EU Citizens would no longer receive preferential treatment. However, it is important to note that this matter is still subject to negotiation between the EU and the UK. 

In the event of a “No Deal” Brexit

If the UK and the EU fail to reach a formal agreement, UK Nationals would no longer have access to freedom of movement after the UK leaves the EU and it is expected that they would require a permit to work in an EU member state.

What do we know so far?

Under the terms of the draft Withdrawal Agreement, UK professional qualifications will continue to be recognised by the EU during the transition period. During this period they will also be able to apply to the EU country within which they work for ongoing recognition of their qualification(s). More information from the EU is available here.

The UK Government’s negotiating position is that they would like to establish a system for the mutual recognition of professional qualifications that:

  • Covers the same range of professions as the Mutual Recognition of Qualifications Directive;
  • Includes those operating either on a permanent or temporary basis across borders;
  • Enables professionals to demonstrate that they meet the necessary requirements, or to undertake legitimate compensatory measures where there is a significant difference between qualifications or training, in a timely way;
  • Provides transparency, with cooperation between regulators to facilitate the exchange of information about breaches of professional standards, and to review changes to professional qualifications over time.

In the event of a “No Deal” Brexit

In the event of a No Deal Brexit, the Mutual Recognition of Qualifications Directive will no longer apply to the UK from the withdrawal date as a ‘third country’. As a result, there would be no system of reciprocal recognition of professional qualifications between the UK and EU member states. This would mean that qualifications obtained in the UK after the withdrawal date (UK nationals and EU Citizens) would be third country qualifications and subject to the national policies and rules of each member state.  

However, it is important to note that this would not affect your employees who have already received a recognition decision in an EU member state before the withdrawal date. The EU Commission has advised holders of qualifications obtained in the UK (before the withdrawal date) to obtain recognition in an EU Member State before the UK’s exit.

Click here for more information from the UK Government. 

Business Travel

What do we know so far?

If the UK Parliament ratifies a Withdrawal Agreement with the European Union, then EU citizens will still have an automatic right of admission to the UK until the end of the Implementation Period. This means that your EU colleagues/customers will still be able to undertake business visits to the UK unhindered for the duration of the period.

Once the implementation period has finished, it is expected that free movement of people will end. In the political declaration setting out the future relationship, it states that both sides should aim to establish mobility arrangements which provide visa-free travel for short term visits. It goes on to say that these arrangements should allow for the temporary entry and stay of natural persons for business purposes in defined areas. 

In the event of a “No Deal” Brexit

If the UK leaves the EU without a deal, then EU citizens will still be able to enter the UK without a visa, but only for a period of up to three months.

Click here for more information on visiting the UK after Brexit.    

 

What do we know so far?

If the UK Government reaches a Withdrawal Agreement with the European Union, then UK citizens will still have an automatic right of admission to the EU until the end of the Implementation Period in December 2020. This would mean that your UK colleagues/customers will still be able to undertake business visits to the EU unhindered for the duration of the period.

Once the implementation period has finished, it is expected that free movement of people will end. In the political declaration setting out the future relationship, it states that both sides should aim to establish mobility arrangements which provide visa-free travel for short term visits. It says that these arrangements should allow for the temporary entry and stay of natural persons for business purposes in defined areas.

The European Commission has proposed that UK citizens will not require visas for short stay visits to the EU. However, this will depend on the UK Government offering reciprocal visa-free access to EU citizens. If the UK were to introduce visa requirements for nationals of an EU member state, then this may lead to visa requirements for UK nationals being reintroduced.

In the event of a “No Deal” Brexit

If the EU and the UK fail to reach an agreement, your UK colleagues and customers would need to comply with different rules to enter the EU after the UK leaves the EU.

In this scenario, your UK colleagues/customers would be considered third country nationals and would require a passport that has been issued within the past ten years. The passport would also need to be valid for at least three months after the date they intend to leave the EU country they are visiting.

The UK Government recommends having at least 6 months validity remaining on your passport when traveling to countries in Europe. Click here for more information from the UK Government.

The European Commission has proposed that UK citizens will not require a visa for short stay visits, even in a no deal scenario. However, this will be dependent on the UK Government offering reciprocal access to EU Citizens.

What do we know so far?

The European Union guarantees surcharge free roaming amongst member states. This means that UK citizens do not currently face any additional charges for making calls, sending texts and using mobile data services in other EU states than they would in the UK.   

The UK Government has stated that if they reach an agreement with the European Union, surcharge free-roaming would continue to apply until the end of the Implementation Period on the 31st December 2020. Once the Implementation Period has concluded, roaming charges would be subject to the outcome of the negotiations on the future economic arrangement between the EU and the UK.

In the event of a “No Deal” Brexit

In the event of a “No Deal” Brexit, UK mobile operators would no longer be subject to EU regulation which prohibits roaming charges. This means that surcharge free-roaming could no longer be guaranteed when travelling to the EU, as UK operators could in theory re-introduce roaming fees for customers if they wanted to. It is entirely dependent on each individual mobile operator, as they may choose to continue commercial arrangements with mobile operators in the EU. Alternatively, they could offer packages with differing terms and conditions that limit the number of texts and calls you can make and data you can consume in the EU, compared to the amount available to you when in the UK.  

The UK Government stated that they would legislated to ensure that mobile operators would continue to be subject to a financial limit on mobile data usage while abroad. The limit has been set at £45 per monthly billing period. The Government has also legislated to ensure that users continue to receive alerts once they have reached 80% and 100% data usage.

Click here for more information on UK Government guidance for Mobile Roaming in a “No Deal” scenario. 

Pensions

What do we know so far?

The issue of cross border pension payments is still subject to negotiation between the UK Government and the EU.

In the event of a “No Deal” Brexit

In a “No Deal” Brexit, UK firms would lose their right to passport into the European Economic Area (EEA) which would prevent them from paying pension annuities to your employees based in the EEA. If they were to carry on making these payments they could risk being fined. The UK Government has said it will allow EEA based firms to continue providing these services on a three year basis which will allow enough time for firms to receive authorisation. The EU has not yet said whether it will provide a reciprocal arrangement for UK based firms to continue payments on a temporary basis. UK firms making cross border pensions payments may need to set up a subsidiary in the EU to continue making these payments.   

Click here for more information from the UK Government.

 

What do we know so far?

The issue of cross border pension payments is still subject to negotiation between the UK Government and the EU.

In the event of a “No Deal” Brexit

In this scenario, the UK Government has confirmed that EU firms currently paying annuities to UK based employees, will be able to continue to provide these services on a temporary basis for three years. The UK Government has said that this will allow enough time for firms to apply for authorisation to continue their operation in the UK. It is not clear whether countries based in the European Economic Area (EEA) would then receive the authorisation to continue providing pension annuities to UK based employees after the three year period ends. They may have to set up a subsidiary in the UK to continue making these payments.

Click here for more information from the UK Government.


Who can help?

Brexit Clinics

FREE events giving local businesses an opportunity to speak with guest experts about how key aspects of Brexit might impact their organisation and what they can do to prepare.

View dates

The Brexit Health Check

Your FREE personalised guide to how Brexit may impact your business and recommended steps to take to prepare.

View courses

Gov.uk: Get Ready for Brexit

Government advice & guidance on preparing for Brexit.

Find out more

Brexit Business Readiness Events

Government events taking place across the UK offering advice & guidance on preparing for Brexit.

Find out more

If you would like: more information on how the GBCC can support businesses through Brexit, to provide a case study on your Brexit preparations, to recommend a speaker for a GBCC Brexit event, to request a GBCC speaker on Brexit or to enquire about sponsoring Brexit related research please leave your contact details below: