The following alert is directed to organizations with a presence in the UK or who anticipate the need to place talent at a UK work site.

Given Parliament’s resounding rejection of the Withdrawal Agreement on Tuesday, and the growing political discord in the UK, the likelihood of a “no-deal” Brexit is increasing. Therefore, employers should assess the potential immigration impact on their workforce and prepare for the possibility of the UK exiting the EU on March 29, 2019 with no deal in place.

Parliament Rejects Withdrawal Agreement

In December 2018, the British Prime Minister Theresa May postponed the Parliament vote on the draft Withdrawal Agreement as signs indicated it would not be passed. In the interim, she re-engaged with the 27 EU countries to seek further assurances with regard to the contentious issue of the status of Northern Ireland, the backstop arrangement and the need to avoid a hard border on the island of Ireland. However, the EU was not willing to renegotiate the terms of the Withdrawal Agreement.

The Parliament vote on the Withdrawal Agreement was then held on January 15, 2019 and it was overwhelming defeated by 432-202. On January 16, Theresa May narrowly survived a second vote of no confidence by 325-306. She now has until January 21, 2019 to present to Parliament an alternative to the Withdrawal Agreement.

What Happens Next?

There are several potential scenarios that could evolve over the coming days and weeks. Some of the possible options are:

  • No-Deal Brexit: The UK is unable to approve a Withdrawal Agreement and leaves the EU on March 29, 2019 with no deal in place.
  • Second Referendum: Although unlikely, the UK government could call a second Referendum to allow the public to vote again on whether they want to leave the EU.
  • Brexit Extension: The UK government may request an extension from the EU beyond March 29th for more time to agree on a revised version of the Withdrawal Agreement.
  • Revoke Article 50: This is the mechanism that kick-started the two-year negotiation process. The UK government could revoke Article 50, which would cancel the Brexit process.

What does this mean from an immigration perspective?

The Home Office issued a policy paper on the rights of EU nationals in the event the UK exits the EU with no deal in place. The statement confirms that if no agreement is reached, the proposed EU Settlement Scheme will still be implemented, however the cut-off date will be March 29, 2019.

This means that EU nationals would need to be physically present in the UK by that date to have the right to remain and work in the UK. This differs significantly from the terms of the draft Withdrawal Agreement, which affords those rights to EU nationals and their families who enter the UK by the end of the transition period, December 31, 2020.

Therefore, if the UK exits the EU without an agreement, and the UK government maintains its position as set out in the policy paper, then the deadline by which EU nationals must enter the UK to avail of the current free movement rights afforded by membership of the EU is March 29, 2019.

What action should businesses take?

Although the UK government has previously stated its intention to protect the rights of EU nationals, no guarantee has been given that the rights would extend to those who enter the UK after March 29, 2019 in a no-deal scenario. Therefore, while any EU nationals and their family members currently residing in the UK are already protected, this is not the case for those who are yet to arrive.

Therefore, if companies in the UK have identified any EU nationals who intend to work in the UK in the future, the risk-free approach would be for those individuals to transfer to the UK before March 29, 2019. EU nationals who are present in the UK by that date will be protected under the current legislation and will be eligible to apply for settlement or pre-settlement status.

There is very little information available as to how EU nationals may be treated in a no-deal situation after March 29, 2019. Details of the new UK immigration system are yet to be confirmed and are unlikely to be in place by then. EU nationals may be required to obtain a visa as other foreign nationals are currently required to under the Points Based System. Tier 2 is the work permit route that has specific requirements, including minimum salary and skills thresholds. This would also significantly increase the cost of hiring for UK based employers.

From a compliance perspective, employers most likely will be required to undertake right to work checks on EU nationals. Currently, an EU passport or national identity card is sufficient evidence of the right to work. Post-Brexit, if no agreement is reached, EU nationals will be required to provide additional documentation to confirm the right to work in the UK. Employers will need to ensure that their on-boarding procedures are sufficiently robust to reduce the risk of sanctions or fines for non-compliance.

A no-deal scenario may still be averted depending on the outcome of the ongoing negotiations. We will continue to monitor and report on developments in relation to Brexit as events unfold.