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Deal or No Deal: what will happen to the EU workforce post-Brexit?

Back in summer, the UK Government published a Statement of Intent containing details of the EU Settlement Scheme that it is envisaged will apply to EU nationals in the UK post-Brexit.

The key policy change from the current position is that under the Scheme, EU Nationals will need to make an application to the Home Office for a residence document in order to continue to live and work in the UK. This contrasts the current position where no registration and/or visa documentation is required. 

There is, however, still uncertainty over how EU nationals that arrive in the UK after the Implementation Period (ie. after 31 December 2020) will be treated from an immigration perspective. So, what should employers be doing now to prepare for this change?

The current position

Under existing legislation, the majority of EU, Swiss and EEA (Norway, Iceland and Liechtenstein) nationals do not need to apply for any UK residence documentation.

So long as they are a "qualified person" - ie. they are a job seeker, worker, self-employed, self-sufficient or a student – then they can lawfully live and work in the UK. This right also extends to certain categories of non-EEA direct family members, but some extended family members of EEA nationals need to apply for a Residence Permit in order to obtain such rights.

Key principles of the EU Settlement Scheme

The key date in the context of the Scheme is 31 December 2020. Any EU nationals who are present in the UK at that point  and wish to remain will need to make a formal application (and will no longer be able to rely on EU free movement principles) as follows:

  • EU nationals and their family members who have been continuously resident in the UK for 5 years as at 31 December 2020 can apply for "settled status", effectively giving them indefinite leave to remain in the UK on essentially the same terms as before.
  • EU nationals and their family members who have arrived in the UK on or before 31 December 2020 - but have not been continuously resident in the UK for 5 years - can apply for "pre-settled status". Once these individuals reach 5 years' continuous residence, an application can be made to secure fully settled status.

Applications must be made by 30 June 2021 and it is envisaged that the application process will be user-friendly and straight-forward.  The Government's proposals simply require the applicant(s) to prove their identity, residence and criminal history.  The idea is that minimal supporting documentation will be required and that information already available to the Government will be used in determining applications that are made.

EU nationals arriving after 31 December 2020?

The position regarding future immigration rules for EU nationals arriving after 31 December 2020 is unclear and will in all likelihood depend on the terms of any Brexit deal reached between the UK and the EU.

The Migration Advisory Committee (MAC) Report on EEA Migration (produced in September 2018) contained a number of recommendations for future immigration reforms, including that:

  • EU workers should be subject to the same visa rules as non-EEA migrants following the Implementation Period;
  • The application process should be merits-based and not give preference to EU nationals based on their nationality alone; and
  • That the current rules on non-EEA migrants coming to the UK should effectively be extended to EU nationals, with the current cap on permitted numbers being removed.

It has recently been reported that the Cabinet agrees with the majority of the MAC recommendations, which could effectively see the current Immigration Rules that apply to non-EEA nationals being extended to cover EU migration following the conclusion of the Implementation Period.

What next?

In reality, there is no immediate rush for businesses that employ either EU nationals or family members of EU nationals to take action. It was recently suggested that negotiating teams may have been close to reaching a deal – although it is now being reported that talks stalled over the weekend as a result of disagreements surrounding proposals for the Irish border.  A deal, if agreed between the parties and ratified by the UK Parliament, would naturally provide much needed certainty for all parties.

In the meantime, it would be wise for businesses to carry out an audit of their workforce to determine the extent of any reliance on EU workers.  Whilst the proposed application process under the Scheme doesn't require much in the way of action from employers, employers may nevertheless want to inform current EU staff of the Scheme in order that individuals can take the necessary steps to remain.

There are, of course, still a number of fairly big questions that require to be answered before the Scheme takes full effect – the rules that will apply to EU nationals after 31 December 2020 being a key issue.  For example, how would the UK economy cope if there will no longer be a large body of EU nationals that can work in relatively low paid and low skilled jobs?  There is also the question of whether there will be a rush of EU migration to the UK during the Implementation Period, which would perhaps offset the above concern to some extent.

If you have any questions on the EU Settlement Scheme and how this could impact your EU workforce, please contact Fraser Vandal.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at October 2018. Specific advice should be sought for specific cases. For more information see our terms & conditions

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