BAL Brexit Bulletin April 6, 2017

6 Apr, 2017

Brexit

The following is a roundup of recent developments concerning Brexit negotiations and the United Kingdom’s withdrawal from the European Union.

News Summary

The U.K. Government formally invoked Article 50 on March 29, officially notifying the EU of its intention to withdraw from the bloc and setting off a two-year negotiation period.

Prime Minister Theresa May has reportedly indicated that free movement for EU nationals could continue during a transitional “implementation phase” immediately following the U.K.’s break from the EU in the spring of 2019 to allow companies to plan for new rules.

Scotland’s Parliament, meanwhile, approved a measure in favor of a second referendum on Scottish independence from the U.K., while May continues to suggest she will block such a vote until Brexit is completed.

BAL held a webinar on March 23 to discuss how companies have begun planning for Brexit and immigration changes affecting their EU and non-EU workforces, as well as sharing an analysis from BAL’s Brexit benchmarking report.

 

Immigration

Brexit formally underway

Brexit proceedings formally began on March 29 when the U.K. delivered a letter of intent to withdraw from the EU. The EU responded by issuing draft negotiating guidelines on Brexit for the EU-27 members. While May has indicated her desire for parallel negotiations on withdrawal and a deal on a new relationship, the EU guidelines make clear that it will take a “phased approach” in which the U.K.’s disentanglement from the EU is first settled before any future relationship can be agreed upon.

Free movement: Post-Brexit transition period?

May indicated that she would not rule out an extension of free movement during a transitional period (which she preferred to refer to as an “implementation phase”) after a Brexit deal is reached, allowing businesses time to adjust to new rules.

“Once we’ve got the deal, once we’ve agreed what the new relationship will be for the future, it will be necessary for there to be a period of time when businesses and government are adjusting systems and so forth, depending on the nature of the deal, a period of time during which that deal will be implemented,” May said to reporters while on a trip to the Middle East.

This signals a recognition that there are many businesses in the U.K. relying on an EU workforce, that a considerable amount of planning will need to go into any new system, and that managing existing and new EU entrants into the U.K. and any controls will need to be balanced against business needs. There are few details on how an implementation phase will operate, but it is thought that the “four freedoms,” including the free movement of people, may continue during that period—particularly since May has suggested that a new trade deal with the EU is unlikely to be finalized until formal Brexit in 2019.

 

U.K. White Paper on Great Repeal Bill

The U.K. government has published a white paper on the Great Repeal Bill that will eventually repeal some 12,000 European regulations from the British statute book on the day the U.K. leaves the EU. The paper sets out how the government plans to ensure an orderly conversion of EU law into domestic law.

Importantly, the U.K. Government will introduce an immigration bill so that nothing in law will change for any EU national, whether already in the U.K. or moving from the U.K., without Parliamentary approval.

 

Scotland

Independence referendum

The day before the U.K. triggered Article 50, the Scottish Parliament voted in favor of a second independence referendum by spring 2019 when the terms of a Brexit deal will be clearer. The motion requires approval by the U.K., and May has repeatedly said that “now is not the time” for Scotland to vote on breaking away from the U.K. In 2014, Scottish voters opted by 55 percent to remain in the U.K., but that was before the U.K. voted to leave the EU.

 

BAL Webinar Highlights

BAL held a webinar for clients on March 23 looking at Brexit and Tier 2 Skilled Worker reforms and their impact on companies. Here are some of the highlights of the webinar, led by BAL Managing Director for Europe, Emily King:

  • An overview of the current U.K. immigration landscape, including the political environment, government objectives, existing and planned reforms to skilled migration and long-term results for businesses.
  • Analysis of the legal status of EEA nationals currently in the U.K. and important restrictions based on the Home Office’s interpretations of continuous and lawful presence.
  • Discussion of BAL’s Brexit Benchmarking Survey of companies across numerous sectors, their concerns about Brexit, the extent of Brexit’s impact on their businesses and what steps they are taking to plan for changes to U.K. immigration law. Best practices are beginning to emerge, depending on sector needs (tech companies for example have been some of the most proactive in Brexit planning) and depending on how reliant a company is on maintaining an integrated U.K. and EU workforce.
  • Tier 2 skilled migration routes for non-European nationals will undergo several changes, most notably an immigration skills charge that will raise costs for all employers using Tier 2 General and ICT routes.


Preparing Your Company

The results of BAL’s Brexit benchmarking survey, released in tandem with the webinar, indicate that many companies have begun taking proactive steps to support their EU employees and to plan for eventual changes to free movement.

BAL continues to provide Brexit-related services at varying levels based on individual corporate needs. Brexit immigration planning may include:

  • Consulting and auditing to determine your company’s level of exposure to Brexit.
  • Assessing your company’s EU workforce and its needs going forward.
  • Tracking EEA employees and new hires for permanent residency eligibility based on five years of “continuous” and “lawful” presence.
  • Exploring all options for EEA employees to secure or confirm their rights to remain.


Employees

Employees can also take steps to prepare for Brexit, including making sure they are aware of their legal status in the U.K. and whether there is a basis on which they can claim to be a “qualified person” under EU law. Employees should make sure they possess:

  • Evidence of their date of arrival in the U.K. (e.g., travel records).
  • U.K. housing records (e.g., chain of tenancy or mortgage documents).
  • U.K. tax records (e.g., P60s for each year in the U.K.).
  • Contracts, pay slips and bank statements to demonstrate periods during which they were working in the U.K.
  • Comprehensive sickness insurance, including either private insurance or evidence of registration in their home country, to cover any periods of time as a student or self-sufficient person.

BAL encourages and welcomes feedback on Brexit and Tier 2 changes with the BAL London Team, as we continue to work with Government to prepare for reforms.

Should you have any questions or require more information on how BAL can help with Brexit planning, please contact us at uk@balglobal.com.

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