The effect of Brexit on EU nationals living and working in the United Kingdom will undoubtedly be of interest to many employers as things develop over the coming months. The provisions for leaving the EU are outlined in Article 50 of the Treaty on European Union, which states that “Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.” The UK will remain part of the EU (and subject to EU rules and regulations) until Article 50 is triggered and the negotiations with other member states have concluded, or the two year notice period (or any agreed extended period) has elapsed. The timing for triggering Article 50 is still under discussion. We know it will not take place before the end of 2016. We consider below the current visa arrangements in the UK, possible alternative models and their impact on EU nationals living in the UK.
EEA Nationals: The EEA consists of the 28 Member States of the EU, as well as Norway, Iceland and Lichtenstein. EEA citizens and Swiss nationals are subject to provisions regarding the free movement of persons. This is enshrined in Article 45(1) of the Treaty on the Functioning of the European Union, which establishes that “Freedom of movement for workers shall be secured within the Union”. This provision allows EEA citizens and Swiss nationals to benefit from European rights to live and work in the UK. They may travel freely for a period of up to three months. Following this initial period, they must be working in order to stay (though there are other circumstances which may enable a prolonged stay e.g. self-sufficiency, study or job-seeking). EEA nationals and Swiss citizens (with the exception of Croatian nationals) have full access to the labour market. This applies irrespective of the nature of the work (i.e. skilled or unskilled) and there is no need to obtain a work permit. After living in the UK for five years, EEA nationals automatically qualify for Permanent Residence. Individuals who have held Permanent Residence for a period of 12 months may be eligible to apply for British Citizenship. Non-EEA Nationals: Non-EEA nationals may currently apply for work visas and permits to the UK in accordance with a points-based system. There are five tiers of entry to the UK under this system: ▪ Tier 1: high-value migrants (exceptional talent, entrepreneur, investor, graduate entrepreneur) ▪ Tier 2: highly-skilled workers (general, intra-company transfer, sportsperson, minister of religion) ▪ Tier 3: low-skilled workers (this tier is not currently operational) ▪ Tier 4: students ▪ Tier 5: youth mobility and temporary workers Note that as Tier 3 is not operational, there is no scope for work visas or permits for low-skilled roles.
Employers hiring non-EEA nationals must obtain a sponsorship licence to be able to employ migrants. Under Tier 2 of the points-based system, an employer may obtain permission to employ skilled workers who are non-EEA nationals provided the potential employee achieves a sufficient number of points and, in most cases, is only employed to do a job which cannot be filled by an employee from the UK or the EEA. The spouse, partner or dependant of someone who has been granted permission to work in the UK under the points-based system may also be able to work in the UK in certain circumstances
Alternative Models following Brexit EEA membership: If the UK wishes to maintain continued access to the Single Market, it may attempt to join the EEA. However, the EU is unlikely to allow the UK to be part of the EEA unless the UK accepts the fundamental principle of the free movement of persons. Norway, Iceland and Lichtenstein all remain subject to EU regulations regarding the free movement of persons in order to be a part of the EEA. If the UK agreed to adhere to the principles of the free movement of persons, EU nationals would be able to continue to work in the UK. It also remains a possibility that in order to become a part of the EEA, the UK would adhere to the general principles of the free movement of persons alongside some more specific provisions (for example, having secured an employment contract prior to arriving in the UK). However, as restricting immigration was a key concern for many Leave campaigners, it is unclear whether a post-Brexit government would accept the continuation of the free movement of persons. Non-EEA membership: If the UK government chose to pursue a system for EEA nationals similar to the current points-based system for non-EEA nationals, there would be a number of consequences for employers. The costs of hiring an EEA national are currently identical to those for hiring a British citizen. However, under a points-based system, employers would pay upfront costs to become a sponsor (currently of around £1,500). There are further charges for each individual visa, and limits on the number and type of visas available. These costs are expected to rise with the introduction of the Immigration Skills Charge in April 2017 when employers who employ migrants in skilled areas will be required to pay a further sum of £1,000 per employee per year (unless they qualify for a reduced rate or exemption). In addition, if EEA nationals are forced to qualify under Tier 2 of the points-based system, it is likely that in many cases employers will only be able to employ them if there is no British national suitable for the role, and will have to advertise the position first in accordance with strict requirements. This is likely to materially reduce the number of EEA nationals entitled to come and work in the UK. A new immigration system? It is of course open to the UK Government to amend the immigration rules as a result of Brexit, assuming the new deal does not include membership of the EEA (and the associated free movement of persons). We may see changes introducing certainty around the status of current EEA nationals living and working in the UK. Depending on the outcome of the Brexit negotiations, there is likely to be no need for the UK to treat EEA nationals differently from other potential immigrants from around the world. As such, Brexit may be used as an opportunity to amend or completely overhaul the existing immigration system. It is likely that the agenda for a new set of immigration rules would seek to ensure that the UK remains an attractive place for desirable immigrants to choose to work, and that businesses are not unnecessarily restricted in who they employ, while still imposing sufficient restrictions on those entering the UK to keep immigration to a satisfactory level. Impact on EEA Nationals living in the UK (and vice versa) For EEA nationals who have already exercised their right of free movement and are currently living and working in the UK, transitional arrangements on immigration status are likely to be agreed as part of the formal Brexit negotiations. A cut-off date may be imposed as the Government will want to avoid creating an increase in European immigration in advance of Brexit. Whether or not these arrangements will confer limited or permanent residence status is another area of uncertainty. The legal position in this area is complex. A House of Lords EU committee report entitled ‘The Process of Withdrawing from the EU’ stated that ‘determining the acquired rights of the two million or so UK citizens living in other Member States, and equally of EU citizens living in the UK…would be a complex and daunting task’. Unfortunately, the report did not go on to explore the various challenges in detail or to propose any solutions at this time. The Law Society of England and Wales has also commented on the issue of acquired rights and has stated that “There is precedent under international law that if a person has exercised a right under an international treaty, they may continue to enjoy the benefit of that right if the treaty ends. This idea of acquired rights, or vested rights, would suggest that people will not be ‘sent home’.”
In short, leaving the EU in itself may not necessarily be sufficient to extinguish treaty rights that individuals have already acquired. That said, the treaties governing the EU do not specifically make reference to acquired rights persisting after the treaties themselves cease to apply. This differs from the position in many other international law treaties which do make it clear that acquired rights will outlive the treaty itself. As such, it could be more difficult for individuals to argue that a right derived from EU law continues to apply when that treaty no longer applies to them. However, even leading Brexit campaigners are supportive of the principle that those persons who are in the UK already should be allowed to remain. Accordingly, in practice it is very unlikely that we will see the deportation of large numbers of EEA nationals following Brexit. Similarly, as part of the Brexit negotiations we expect the status of UK nationals currently living in other EEA countries to be high on the agenda as such individuals will require certainty over their status. If any agreement purports to diminish rights acquired through an international treaty that protects acquired rights, then this could be open to challenge by an individual who has suffered as a result. Family members Under current immigration rules, dependants of a British citizen or a person settled in the UK may apply to accompany or join the primary family member. Article 8 of the European Convention on Human Rights (the ECHR) outlines the “Right to respect for private and family life”. It has been successfully argued in a number of cases that separation of family members, including deportation or removal of immigrants, can be considered a breach of human rights. In 2008 the House of Lords handed down a series of judgments on how claims under article 8 should be assessed and importantly, confirmed that the rights of other family members must be taken into account when decisions were being made about the right to remain in the UK. It also held that delays in decision making by the UK Border Agency (now UK Visas and Immigration) were relevant to the question of proportionality when determining whether there had been a breach of human rights. In addition, the House of Lords specifically considered whether the fact that a person could return to their home country, and apply for entry to the UK from there, would justify removal from the UK. It held that these facts would rarely be enough to justify removal as a proportionate step, and in such circumstances article 8 rights could be relied upon to allow an individual to remain in the UK. These cases are indicative of a general expansion of the protections that the ECHR affords individuals in the immigration context. The Human Rights Act 1998 incorporates the rights in the ECHR into UK law. The ECHR operates entirely separately to EU membership and so these rights would not be affected if the UK leaves the EU. The Government has talked of replacing the Human Rights Act with a UK Bill of Rights but this will still need to respect the UK’s International Law obligations under the ECHR. PostBrexit, human rights arguments are likely to become even more prevalent at the stage of immigration appeals if the UK seeks to restrict access for EEA nationals or their family members.
Suggested Actions for Employers Employers should consider the following actions: □ Identify those employees who may be affected. □ Encourage EEA nationals and families who have been living in the UK for five or more years to apply for Permanent Residence to avoid any immigration restrictions which may result from Brexit. Individuals who have held Permanent Residence for a period of 12 months may be eligible to apply for British Citizenship. □ Encourage EEA nationals who have been living in the UK for less than five years to apply for an EEA Registration Certificate. Although this is not currently necessary to give them permission to work in the UK, possession of this certificate demonstrates that the EEA national in question is exercising their freedom of movement rights. □ Ensure continuing compliance with any sponsor licence obligations, as a sponsor licence may be needed in order to employ EEA, as well as nonEEA nationals, in the future. If you are not currently a sponsor, consider whether an application to become a sponsor should be made and take any necessary preparatory steps. □ Review offer letter wording to reflect that a continuing right to work in the UK would be required to allow employment to continue (although note that a fair process would still need to be followed). □ Review employment contracts to ensure employees are required to update the employer on any changes to their immigration status or continuing right to work in the UK. □ Consider any secondment arrangements whereby UK employees may be seconded to work in the EU (or vice versa). Secondees may seek additional assurances of redeployment in their home country if the secondment is terminated due to Brexit related changes.
SHEPHERD AND WEDDERBURN’S BREXIT ADVISERS JOINING THE DOTS OF THE EU REFERENDUM What next? Shepherd and Wedderburn has been for many years offering balanced and impartial advice on how the different scenarios might play out in the event of constitutional change. Now that the vote has been cast to leave the EU, members of our dedicated Brexit group continue to interrogate the regulatory and commercial issues and to advise clients on next steps and outcomes. For further information in the first instance, please contact: Neil Maclean Partner T M E Katie Russell Partner T M E +44 (0)131 473 5266 +44 (0)787 269 9897 firstname.lastname@example.org +44 (0)131 473 5181 +44 (0)782 541 3316 email@example.com
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