Brexit Is Here

The United Kingdom faces a monthslong transition out of the European Union

Allen Smith, J.D. By Allen Smith, J.D. January 31, 2020
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​The United Kingdom (U.K.) leaves the European Union (EU) as of Jan. 31, but details on the separation still need to be worked out during a transition period that will last until the end of the year. While not much will change during the transition period, employers can start taking certain actions now before the transition concludes.

Transition Period

During the transition period, EU nationals can continue to travel to, reside in and work in the U.K. with no advance immigration formalities, said Julia Onslow-Cole, partner in global government strategies and compliance with Fragomen in London. Similar rights also would apply to U.K. nationals looking to move to EU member states during the transition period.

During this time, the U.K. and EU will try to reach a free trade agreement that will govern their relationship after January 2021. Nothing from the old relationship is carried forward automatically; it all will need to be negotiated line by line, said Adam Hartley, head of employment with DLA Piper in London.

British and EU negotiators will go through thousands of tariff settings to determine the customs duty and technical arrangements that will apply to each product going between the U.K. and EU.

"As part of the deal, the EU will seek to insist on a level playing field for workers' rights, climate action, and environmental and data protection," Hartley said. "The U.K., on the other hand, will want the freedom to diverge from EU rules."

Once a free trade agreement has been negotiated, all 27 EU member states and the U.K. will need to ratify it.

"Note there is still risk of a no-deal scenario after the transition period, and potential extensions may be ruled out," said Joanna Sogeke, senior EMEA [Europe, Middle East and Africa] immigration specialist for Crown World Mobility in London.

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To-Do List

Hartley said that employers should audit their workers' immigration statuses and encourage any EU workers in the U.K. to apply for settled status in the U.K.

Onslow-Cole described the settlement procedures as "free, straightforward and very light-touch."

Employers also should consider the status of any U.K. national they employ in EU member states. "Employers could consider holding briefings for U.K. citizens working in the EU to inform them of expected changes to residency and visa requirements," said Simon McMenemy, an attorney with Ogletree Deakins in London.

Arrangements will vary depending on the country where the employees are based. The EU has advised all its member states to provide residence permits to U.K. citizens in other EU countries on Brexit day as a short-term measure, McMenemy noted.

Onslow-Cole said that employers in the U.K. should start to strategize about their workforce and how it will look at the end of the transition period. The removal of free movement between the U.K. and EU will mean a labor-market contraction, she noted. While U.K. employers don't yet know what the new immigration system will look like after Jan. 1, 2021, employers should start to focus on recruiting future talent and retaining employees to combat turnover and mitigate having fewer available applicants, she said.

U.K. employers that have relied heavily on EU workers should consider other visa options, such as Tier 2 work permits, Onslow-Cole added.

Hartley said data protection will also be a priority. "Employers will need to ensure that they have the necessary mechanisms in place to be able to continue to transfer employee data cross-border," he noted.

In addition, if a multinational employer has a European works council established under U.K. law, it may need to consider moving the council to another jurisdiction. "If the European works council is set up under the law of another member state, it will be necessary to consider whether U.K. employees will continue to be covered [by the council] post-Brexit," Hartley said.

European works councils will nonetheless continue to operate until the end of the transition period, McMenemy said.

Will U.K. Employment Law Change?

Employers should not prepare for wholesale changes to employment law either, McMenemy said. "Fundamental aspects of U.K. employment law, such as protection from unfair dismissal and discrimination, are unlikely to be altered."

Nonetheless, he added, "The U.K. will cease to be automatically affected by European legal developments at the expiration of the transition period. The U.K. will then be exempt from forthcoming EU legislation, such as the Work-Life Balance Directive for working parents and caregivers and the draft directive on gender balance at the board level."

Esther Langdon, an attorney with Vedder Price in London, said that eventually there could be some changes to EU-derived employment law already in place in the U.K., such as "the ever-contentious" Working Time Directive. This directive requires a limit to weekly working hours. However, she said, such changes "won't happen overnight."

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