Rights of EU citizens in the UK after Brexit - Do the UK Government’s proposals work for business?

A key concern for UK business is its ability to retain or attract EU workers in the wake of Brexit. Most employers want an immigration system that is simple to administer, inexpensive and which gives early certainty to EU citizens about their future status. Their worry is that without this EU citizens will be less likely to apply for jobs in the UK and those already in employment may be less inclined to stay. There is increasing evidence to suggest this is already happening. The UK Government’s proposals on EU citizens’ rights were published on Monday. This briefing summarises the key issues and looks at the concerns businesses might have about them. It then considers what steps businesses should be taking and asks for your views on the Government’s proposals. Freshfields has been asked by the UK’s Department for Exiting the European Union to provide feedback and we would like to reflect your concerns as closely as we can. The briefing also attaches a table outlining how the UK proposals differ from the EU’s proposals as set out in its recent negotiating position paper. 1 2 What is the UK Government proposing? The proposals are complex and depend on the category into which an EU citizen falls. In summary: • All EU citizens residing in the UK at the point of Brexit will need to obtain an immigration status in UK law by applying for permission to stay. They will need to apply for a residence document from the UK Home Office as evidence that they have obtained this permission. This will be the case even if they already have permanent residence status in the UK (the reasoning being that their permanent residence status is linked to the UK’s membership of the EU and will no longer be valid after Brexit). • Whether EU citizens will be able to obtain permission to remain in the UK after Brexit will depend on how many years’ continuous residence they have in the UK at a cut-off date that is as yet unspecified, but which will be agreed between the UK and the EU. The UK Government has indicated that the cut-off date could be any time from the date on which the UK triggered the Article 50 notice of withdrawal from the EU (29 March 2017) to the date on which the UK leaves the EU (the Withdrawal Date). • EU citizens who have been living in the UK continuously for five years or more before the cut-off date will be able to apply for ‘settled status’ under UK immigration law. This will mean that they will be allowed to stay indefinitely in the UK and have access to state benefits and public services in line with UK nationals. • EU citizens who arrived in the UK before the cut-off date but who have been living in the UK for less than five years continuously by the Withdrawal Date will not be entitled to settled status immediately from the Withdrawal Date. Instead, they will have to apply to the UK Home Office for leave to remain temporarily in the UK after the Withdrawal Date. They could then apply for settled status upon reaching five years of continuous residence in the UK. • EU citizens arriving in the UK after the cut-off date but before the Withdrawal Date will be able to stay in the UK until the end of a two year ‘grace period’ starting on the Withdrawal Date (described further below), but will then be subject to the post-Brexit immigration regime that the UK Government decides to adopt for EU citizens. The post-Brexit immigration regime is still to be determined. • EU citizens arriving in the UK after the Withdrawal Date will be subject to the post-Brexit immigration regime. • The UK Government’s proposals also cover family members of EU citizens. The proposals are as follows: • Where an EU citizen arrived in the UK before the cut-off date, the rights of their family members will depend on when the family member joins the EU citizen in the UK. If the family member joins them: – before the cut-off date, the family member (whether an EU citizen or a non-EU national) will be able to apply for settled status once he or she has five years’ continuous residence in the UK; – after the cut-off date but before the Withdrawal Date, it appears that the family member (whether an EU citizen or a non-EU national) will also be able to apply for settled status once he or she has five years’ continuous residence in the UK; or – after the Withdrawal Date, the family member’s right to reside in the UK will depend on their nationality. If they are an EU citizen, too, they will be subject to the post-Brexit immigration arrangements that are agreed between the UK and the EU. If they are a non-EU national, they will be subject to the same rules that apply to non-EU national family members joining British citizens in the UK. • Where an EU citizen arrives after the cut-off date, any family member of that citizen who subsequently joins them in the UK will be subject to the post-Brexit immigration regime that the UK Government decides to adopt for them; 3 • To avoid a surge in applications by EU citizens and their families seeking residence documentation before the Withdrawal Date, all EU citizens and their families who arrive before the Withdrawal Date will receive blanket permission from the UK Home Office to remain in the UK for a ‘grace period’ starting on the Withdrawal Date. The length of the grace period is yet to be determined, but it is expected to be up to two years. Only at the end of the grace period will EU citizens and their families be required to have residence documentation in order to remain in the UK. • EU citizens or their family members who obtain settled status will lose this status if they reside outside the UK for more than two years, and will then become subject to the post-Brexit immigration regime if they subsequently wished to reside in the UK. • Irish citizens will not be subject to these changes. Their existing rights to live and work in the UK, and the Common Travel Area arrangements between the UK and Ireland, will be preserved after Brexit. There will therefore be no need for Irish citizens to apply for settled status in order to protect their current entitlements in the UK. 4 What concerns might businesses have with the UK Government’s proposals? Although the proposals suggest that the process for eligible EU citizens to obtain permission to remain in the UK will be as straightforward as possible, many EU citizens and their employers will be concerned about the possible administrative burden and the uncertainty inherent in a number of the proposals. • It is not clear when the system to enable EU citizens to apply for ‘settled status’ will be put in place, how long it will take to process these applications, or what the cost of making an application will be. In order to have early certainty, EU citizens with at least five years of residence at the date the Article 50 notice was served will want to make an application as soon as possible. But there is currently no mechanism for them to do so and, while the UK Government has indicated that it intends to put in place an application system before the Withdrawal Date, it is unclear when any such system will open. • An unduly complex system may deter people from applying. The proposals emphasise the UK Government’s aim to make the application as streamlined and user-friendly as possible. However in the absence of any detail about the form the process will take, there is scepticism about whether this will be achievable. • Linked to this, the UK Government has not yet indicated what evidence EU citizens will be required to produce in order to prove residence in the UK for the relevant period of time. This will inevitably cause concern, not least because it is understood that a number of recent applications by EU citizens for permanent residence have been turned down. There is also concern that the UK Government may apply additional criteria. Although the Government is at pains to stress that these will be limited, the proposals refer to a ‘conduct and criminality’ test. 5 • There are concerns about whether the UK Home Office will be able to cope with the administrative burden. Even after account is taken of the extended processing time afforded by the“grace period”, more than 3 million applications may need to be processed. • It will not be possible for EU citizens to rely on existing permission to remain in the UK. EU citizens who have already obtained permanent residence in the UK will need to apply again for settled status, increasing the administrative burden (and potentially the uncertainty) of the process for individuals. • The fact that the cut-off date remains open to negotiation means that many individuals do not yet have certainty as to what their rights are and what steps they will need to take in order to be able to remain in the UK. Many businesses will want the cut-off date to be set at the last possible date (ie the Withdrawal Date), as that will make it easier for more recent arrivals to stay in the UK and acquire settled status. The UK Government may have concerns that agreeing to a later cut-off date risks a further influx of EU migrants into the UK. • The ability of employers to move their EU workers across borders on a long-term basis (eg on secondment or long-term assignment) will be hampered by the fact that employees will be liable to lose settled status if they reside outside the UK for more than two years. • The UK Government is yet to provide any information on the new regime that will apply to individuals entering the UK after the Withdrawal Date, making workforce planning beyond Brexit difficult for employers. 6 What should businesses be doing now? Businesses should identify key employees who are EU citizens residing in the UK and discuss with these individuals how the UK’s proposals might affect their ability to, and willingness to, continue to live and work in the UK following Brexit. Many businesses will also wish to engage with the Government to ensure that their views are taken into account as negotiations between the UK and the EU over these proposals begin. Freshfields has (along with others) been asked by the UK’s Department for Exiting the European Union (DExEU) to provide feedback on the UK Government’s proposals. We would like our feedback to reflect our clients’ views as much as possible. With this in mind, we have set out below a number of questions on EU citizens’ rights. We would be delighted to receive your answers to these questions and any other views you may have on the proposals. 1 Have your EU workers raised any specific concerns with you about (a) their post-Brexit immigration status generally or (b) the UK Government’s proposals specifically? If so, what concerns have been raised? 2 What would your business require from any new Home Office application system for EU citizens seeking to obtain residence documentation? 3 Are you confident that a Home Office application system for EU citizens would be able to meet your business’s requirements? 7 4 Would your business be able to support all of your EU workers in making applications to the Home Office using existing resources (eg your in-house HR team or external immigration service provider), or would you need to take on additional resources for this? 5 Are there any additional scenarios that you feel the UK Government has failed to address in its proposals (eg workers who currently live in the EU and work in the UK)? If you would like us to reflect your views in our response to DExEU (either attributed to you or on an anonymous basis), please contact Nicholas Squire (nicholas.squire@ freshfields.com), Karin Buzanich-Sommeregger (karin.sommeregger@freshfields.com) or Tom Westwell (thomas.westwell@freshfields.com). 8 How do the UK and EU proposals differ? The table on page 10 sets out how EU citizens and their families will be treated under the UK’s proposals, and highlights points of difference with the EU proposals. Glossary cut-off date The date as at which, under the UK Government’s proposals, EU citizens will need to be resident in the UK in order to be eligible to apply for settled status. grace period Period after the Withdrawal Date (expected to be up to two years) during which, under the UK Government’s proposals, EU citizens will be granted blanket permission to remain in the UK, enabling them to apply for residence documentation. settled status The immigration status under UK law which, under the UK Government’s proposals, will be available to EU citizens who are living in the UK as at the cut-off date and meet certain other criteria. Holders of settled status will be able to work freely and live permanently in the UK, and will have access to state benefits and public services in line with UK nationals. Withdrawal Date The date of the UK’s exit from the EU. 9 Category of EU citizen Rights under UK proposals Rights under EU proposals Continuously resident in the UK for five years or more before the cut-off date. Will be able to apply for settled status. Can apply as soon as application system opens and must apply by end of grace period. If the application does not result in settled status, the right to remain falls away. Automatic right to remain in the UK, without any residence documentation. Arrives in the UK before the cut-off date and reaches five years’ continuous residence in the UK between the cut-off date and the end of the grace period. Will be able to apply for settled status. Will need to apply by end of grace period. If the application does not result in settled status, the right to remain falls away. Automatic right to remain in the UK, without any residence documentation. Arrives in the UK before the cut-off date but has less than five years’ continuous residence by the end of the grace period. Will have to apply for temporary leave to remain in the UK beyond end of grace period. Proposals suggest this will be straightforward but no indication is given of what form that application will take. On reaching five years’ continuous residence, will be able to apply for settled status, which will be required in order to remain in the UK. Automatic right to remain in the UK, without any residence documentation. Arrives in the UK after the cut-off date but before the Withdrawal Date. Permission to remain until end of grace period. Right to remain beyond grace period will depend on post-Brexit immigration regime (the details of which remain unclear). These individuals are not covered in the EU’s proposals, which assume that the cut-off date will be the same as the Withdrawal Date. Rights will depend on post-Brexit immigration regime agreed between UK and EU. Arrives in the UK after the Withdrawal Date. Rights will depend on post-Brexit immigration regime (the details of which remain unclear). These individuals are not covered in the EU’s proposals, which only address EU citizens residing in the UK as at the Withdrawal Date (and their family members). Rights will depend on post-Brexit immigration regime agreed between the UK and the EU. 10 Category of EU citizen Rights under UK proposals Rights under EU proposals Family members of those EU citizens who arrived in the UK before the cut-off date. If the family member arrived in the UK: • before the cut-off date, they will be able to apply for ‘settled status’ after five years’ continuous residence; • after the cut-off date but before the Withdrawal Date, they will also be able to apply for ‘settled status’ after five years’ continuous residence; • after the Withdrawal Date, they will be subject to the immigration rules applicable to their nationality: • if they are an EU citizen, they will be subject to the post-Brexit immigration regime for EU citizens that is agreed between the UK and the EU; and • if they are a non-EU national, they will be subject to the immigration rules applicable to non-EU national family members joining British citizens in the UK (eg they will have to meet an income threshold of £18,600 per annum). All family members of EU citizens, regardless of nationality, will have the right to enter and remain in the UK and acquire permanent residence after five years’ continuous residence. Family members of those EU citizens who arrived in the UK after the cut-off date. Rights will depend on post-Brexit immigration regime (the details of which remain unclear). These individuals are not covered in the EU’s proposals, which only address EU citizens residing in the UK as at the Withdrawal Date (and their family members). Rights will depend on post-Brexit immigration regime agreed between the UK and the EU. Lives in an EU member state but works in the UK. These individuals (so-called ‘frontier workers’ who live in the EU but work in the UK, thought to number about 30,000 in total) are not covered in the UK Government’s proposals. These individuals will continue to have the right to move freely between the UK and the EU for work. 11 12 Nicholas Squire Partner T +44 20 7832 7419 E nicholas.squire@freshfields.com Karin Buzanich-Sommeregger Partner T +43 1 515 15 612 E karin.sommeregger@freshfields.com Tom Westwell Associate T +44 20 7716 4610 E thomas.westwell@freshfields.com Contacts This material is provided by the international law firm Freshfields Bruckhaus Deringer LLP (a limited liability partnership organised under the law of England and Wales) (the UK LLP) and the offices and associated entities of the UK LLP practising under the Freshfields Bruckhaus Deringer name in a number of jurisdictions, and Freshfields Bruckhaus Deringer US LLP, together referred to in the material as ‘Freshfields’. For regulatory information please refer to www.freshfields.com/support/legalnotice. 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