There are estimated to be over two million EU nationals currently working in the UK, accounting for around 7% of the workforce, with over one million UK citizens living and working in other EU countries. The ease with which EU citizens can come to live and work in the UK, and vice versa, is therefore likely to be a significant concern for employers, employees and expatriates whose access to skilled workers, jobs, healthcare and pensions could be impacted by a UK exit from the EU.

Under the principle of free movement, EU nationals have an automatic right to live and work in the UK. In its White Paper, the UK Government clearly states that it intends, post-Brexit, no longer to abide by this principle and instead to impose UK controls over EU citizens wishing to come and work in the UK.

There is unlikely to be any change to the UK immigration rules whilst terms of withdrawal are being negotiated. Options being considered by the Government for the post-Brexit regime include a targeted work permit system, to cut the number of EU migrants but retain those in highly skilled and highly paid jobs. A reduction in low-skilled EU migrant workers would obviously have a significant impact on sectors such as agriculture, manufacturing, hospitality, construction and healthcare, which would be likely to affect many regions, not only London and the South East. However, the Government is likely to come under pressure to ensure labour shortages are avoided.

Any new system may also make it more difficult and expensive for multinationals to arrange cross-border secondments, which could have a significant effect on recruitment and retention of talent in sectors such as financial services and others. Short-term business travel to the UK could also become more problematic.

Of course, if the UK were to impose such restrictions, other EU countries would be likely to reciprocate in restricting UK nationals travelling to and working in their countries, a factor which the Government will have to bear in mind when approaching negotiations.

One particular pressure point is whether any new restrictions will be applied to UK and other EU migrants already living and working in a Member State other than their home state. The UK Government has stated that it would have liked, but has been unable, to resolve this issue ahead of the formal Brexit negotiations, and remains ready to reach a reciprocal deal on the issue at the earliest opportunity. It therefore seems likely that reciprocal rights will be negotiated to ensure existing migrants are given the opportunity to seek indefinite leave to remain, but there are no guarantees.

Whatever the UK Government adopts as its immigration policy will be put forward as a separate piece of legislation, not in the Great Repeal Bill, according to the White Paper.

Employers should bear Brexit in mind when agreeing terms for recruitment or secondment of employees cross-border. They should also audit the extent, location and immigration status of their migrant workforce, and the workforces of the businesses in their supply chains, with a view to:

  • communicating with employees, particularly those who might be affected by changes in immigration law, and providing reassurance that they will be kept informed as the position becomes clearer;
  • considering if any current EU citizen employees working in the UK can apply for British citizenship or permanent residence now, and vice versa in the case of British employees working in the EU; and
  • formulating contingency plans and keeping a close eye on what transitional arrangements may be agreed.