On 8 December 2017 a joint report from the negotiators of the European Union and the UK government was published, describing progress made during phase 1 of Brexit negotiations.

While significant progress has been made on citizens' rights, the parties stressed that "nothing is agreed until everything is agreed".

What employers in the UK can take from this:

1. EU nationals resident in the UK (and UK nationals resident in the EU), by 29 March 2019, will be able to stay

This is the confirmation that many employers, and their employees, have been waiting for. This announcement allays any fears that there may be an earlier cut-off date (for example, the date on which article 50 was triggered), meaning that more recent arrivals in the UK/EU may not have been able to stay.

The Home Office has subsequently confirmed that they expect the above to be extended to nationals of Norway, Iceland, Liechtenstein and Switzerland (who are members of the EEA but not of the EU), and also that Irish nationals will not need to apply for any additional documentation.

2. EU nationals will need to apply for settled status or a temporary residence permit

The application process for these documents will be "transparent, smooth and streamlined", with "short, simple, user friendly" application forms. EU nationals who have lived in the UK for five years or more will need to apply for settled status; all other EU nationals will need to apply for a temporary residence permit.

Applications for these documents will open prior to 29 March 2019 and be open throughout a two-year transition period thereafter. An individual who only reaches the five years' residence required to apply for settled status at a point during the transition period is able to apply then; the five years' residence does not need to be attained prior to 29 March 2019.

3. EU nationals who already hold a permanent residence card will still need to apply for settled status

EU nationals who hold a permanent residence card issued under EU law will need to convert this to a settled status document issued under UK law. The process will be simple, with applicants being able to exchange one document for another, free of charge, by providing evidence of identity, confirmation of continued residence in the UK and declaration of any criminal convictions.

In the year following the referendum it is estimated that 150,000 EU nationals in the UK applied for a permanent residence card. Many of these individuals applied for permanent residence in order to then apply for British nationality. However, the majority will now need to apply for the new settled status.

One additional point worth noting is that if an EU national previously held Indefinite Leave to Remain (ILR) then they can choose to apply for this to be re-issued, rather than for settled status. An example of someone in this position is an EU citizen who lived and worked in the UK on a work permit for five years, or who was married to a British national and held a spouse visa, prior to their country joining the EU. This will be particularly relevant to citizens of countries who joined the EU more recently, i.e. during the expansion of the EU into Eastern Europe since 2004.

4. There will be a two-year transition period during which EU nationals can continue to come to the UK to live, work and study

For the two years following Brexit, EU nationals will be able to continue coming to the UK to live, work and study. However, they will be subject to a registration scheme. After this two-year period, i.e. after 29 March 2021, these individuals will be subject to immigration controls which are yet to be decided. Employers will be relying on the Home Office to fully consult and decide on these rules in advance of Brexit to ensure that there are no elements of uncertainty that will negatively impact business.

5. Family members of EU nationals are also covered

This includes EU and non-EU national family members, dependent on an EU national in the UK. To benefit from the provisions described in the joint report, family members will need to:

  • be living with an EU national in the UK by 29 March 2019;
  • be in a close relationship with an EU national living in the UK, on 29 March 2019, and for that relationship to continue when they wish to come to the UK;
  • be a child born to, or adopted by, an EU national living in the UK on 29 March 2019, whether they are born or adopted before or after this date.

There have not yet been any details released of how a future spouse will be treated, i.e. where an EU national living in the UK marries a non-EU national after 29 March 2019.

6. EU nationals with settled status can be absent from the UK for five years without losing it

This is an increase on the two years that an individual can currently be absent for, without losing their permanent residence status, which will be appreciated by EU nationals and their employers.

7. No indication of what immigration system will be in place post 29 March 2021

While we now have a far greater degree of clarity, there are still many unknowns, including how EU nationals will be treated after the two-year transition period.

The Migration Advisory Committee (MAC) is due to publish a report in September 2018 in response to the consultation they conducted earlier this year. Employers will be hoping that they will not need to wait until then for an indication of whether they will be able to continue to rely on the skills and experience of EU nationals to fill key vacancies in the UK.

The above commitments will be what many of your employees in the UK have been waiting to hear. However, there may still be an amount of anxiety due to individual circumstances.

In addition, while this report gives you a degree of comfort that EU nationals you employ before 29 March 2019 can continue working with you (with very limited restrictions), you should continue to plan for any labour and skills gaps you are likely to experience after this date, should you not be able to easily employ EU nationals. With no indication of what requirements EU nationals will be subject to post Brexit, and what entitlements and pathways to settlement they have, there is a danger that EU nationals will be reluctant to take employment in the UK, even during the two-year transition period.