Countdown to UK’s ‘Brexit’ referendum

17 Jun 16

EUROPEAN UNION, UNITED KINGDOM

IMPACT – MEDIUM

The British electorate will vote Thursday on whether the United Kingdom should leave the European Union. During the final countdown to the “Brexit” referendum, campaigning for both the “Leave” and “Remain” camps will intensify, but current polls show the “Leave” campaign has the majority.

Employers should anticipate that it is more likely than not that the U.K. will leave the EU and, from an immigration perspective, is unlikely to continue to be subject to European rules on free movement of people.

Political Background

The stakes in the Brexit referendum are huge, as it will define Britain’s legal relationship with its European allies, its position on the global stage, and will impact the ongoing stability of the EU. Immigration policy has been a key issue during the Brexit debate, due to the immediate refugee crisis, but also because of longer term social changes and pressures in the U.K. that many attribute to migration. The legal rights of free movement of goods, services and people that underpin the EU’s creation of a single market will most likely be lost in the U.K. if the U.K. chooses to leave the EU. Going forward, U.K. employers may not have the ability to move employees freely as assignees or to deliver specific contracts or take advantage of helpful rulings from the European Court of Justice that allow great immigration flexibility against restrictive national legal regimes. Employers should take steps to evaluate their exposure in event of Brexit, and be prepared to communicate with affected employees as any changes take place.

Who is affected?

The immigration impacts of leaving the EU will be felt on four employee populations:

  1. Current “European” employees working in U.K. (i.e., EEA nationals and their family members).
  2. Future or seasonal U.K. labor force, to the extent it would typically be supplied by “European” employees.
  3. Current British employees in European offices.
  4. British nationals who employers anticipate would work in Europe, e.g., on assignment, secondment or as part of rotation.

Next Steps 

It is essential that employers prepare for managing their response to the referendum result and devote some time to strategize how recruitment and employment practices (among other economic, legal, social and political factors) would be impacted by a “Leave” vote. BAL recommends that employers take all practical steps to prepare for the Brexit result next week, including:

  1. Assessing the extent to which their business in U.K. relies on European labor and free movement into Europe – this will be sector and role specific.
  2. Reviewing current recruitment strategiesand contingency plans for those who might not qualify in the future.
  3. Analyzing HR systemsfor the number of employees who currently:

Work in the U.K. on basis of European passport and have a long-term right to work, and so may not currently be tracked.

Work in the U.K. on an EEA Family Permit/Residence Card and have a time-limited right to work, and so should already be tracked.

Work within Europe on the basis of a British passport, but are managed from the U.K.

  1. Ensuring contact informationis up to date for any future communications with affected employees.
  2. Communicatingwith employees:

Employers can consider whether “leave” or “remain” will best serve their business and future job security for their employees, and whether it is appropriate to communicate the company’s position with employees.

Employers may want to prepare an all-office press release for either eventuality, to reassure both British and European employees. The aim should be to reduce panic and manage any transition. BAL can provide suggested text.

  1. Anticipating costsfor any future employment and migration law changes.

Additional information: BAL is running a seminar on the immigration impacts of Brexit on Monday and can provide advice on communications and strategy to minimize business and employee disruption in the event of a Brexit.

This alert has been provided by the BAL Global Practice group in the United Kingdom. For additional information, please contact uk@balglobal.com.

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