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What do employers need to do about ‘no-deal’ Brexit?

Oct 08, 2019
As the odds of a no-deal Brexit continue to shorten, the Chartered Institute of Personnel and Development (CIPD) considers the implications for employers if the UK leaves the EU on 31 October, 2019 without a deal.

No deal Brexit

Actions for employers now

EU Settlement Scheme

Employers may like to support the UK-based EU/EEA (European Economic Area)/Swiss citizens they employ to apply for the EU Settlement Scheme. The Scheme makes it easy for EU/EEA/Swiss citizens and their family members who want to stay in the UK to get the UK immigration status they need.

Employers can provide assistance to their staff and signpost the necessary guidance using the Home Office’s employer toolkit. Applications are free and designed for ease of use but further support is available via the CIPD through webinars and workshops.

One million EU citizens and their families from across the UK have now been granted status. Home Office officials are urging employers to help keep up the momentum of applications as we approach Brexit. As the Minister of State for the Home Office, Brandon Lewis said, “EU citizens have made incredible contributions to our country which is why I’m so pleased that over one million people have been granted status, enshrining their rights in law.”

In a no-deal scenario, the deadline for applications is 31 December, 2020. However, EU/EEA /Swiss citizens wishing to apply must already be living in the UK when it leaves the EU on 31 October, 2019 (if that does end up being the leaving date).

EU/EEA/Swiss citizens who have five years’ continuous residence in the UK by the day they apply will usually get ‘settled status’. Those who have less than five years’ continuous residence will usually get ‘pre-settled status’. They can then apply to change this to ‘settled status’ once they’ve been in the UK for five years. Both ‘pre-settled status’ and ‘settled status’ allow EU/EEA/Swiss citizens to enjoy the same rights and conditions they currently have under free movement.

Irish citizens are exempt from having to apply to the Scheme due to the Common Travel Area Agreement.

For employers who are currently recruiting from the EU/EEA/Switzerland, it is crucial to consider accelerating the process, to ensure that any EU citizens they hire arrive before 31 October.

UK employees working in EU Members States

Employers need to provide relevant briefings for UK citizens working in EU Member States, informing them of expected changes to residency and visa requirements, which will depend on the country in which they are based. The EU has advised all Member States to provide residence permits to UK citizens living in EU countries when the UK leaves the EU as a short-term measure. However, there is a lack of clarity about the longer-term arrangements in some countries, who will set their own policy for UK citizens working in that country. Employers should review the Q&A relating to each Member State published by the European Commission.  This includes a very useful overview table showing the current position for each country.

What happens after 31 October?

European Temporary Leave to Remain

Any EU/EEA/Swiss citizens arriving in the UK after 31 October and intending to stay longer than three months will need to apply for European Temporary Leave to Remain. This will allow them to live and work in the UK for up to three years. Once the three-year visa expires, individuals wanting to stay in the UK must meet the requirements of the new immigration system which will apply from January 2021.

New immigration system from 2021

The CIPD expects to see the government’s final plans for a post-Brexit immigration system in spring 2020. Although the proposals are detailed in the current White Paper, the UK’s new prime minister has announced his intention to ask the Migration Advisory Committee to take a closer look at Australia’s points-based system. Some changes may therefore be anticipated. Meanwhile, it remains highly likely that key proposals from the White Paper will be retained - such as the requirement to have a job offer and the introduction of a minimum salary and skill threshold - as suggested by recent ministerial speeches.

Other changes in brief

  • In most cases there will be no immediate changes to workplace rights in a no-deal Brexit. However, there will be some rule changes for UK employees working for a UK employer in the EU in the event of employer insolvency, and around membership of European Works Councils (EWCs) - for example, workers employed in the UK will no longer be able to ask their employer to set up an EWC. In the longer term, it is possible that the government will make changes to key pieces of EU employment legislation, such as the Agency Workers Directive and the Working Time Directive.
  • UK citizens will be exempt from visa requirements for up to 90 days, which will include business-related activities such as meetings and speaking at conferences.

Workforce and Brexit continuity planning

In addition to immigration and employment law issues, employers should review their workforce and business continuity planning to ensure they are prepared for a variety of different outcomes and have the people and skills they need to sustain their operations.

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