Brexit and Employing EU Nationals

Jul 12, 2016
Since the referendum vote to leave the EU on 23 June 2016 there has been much discussion about what will happen to those EU nationals already working in the UK and whether they will be forced to leave once Article 50, commencing the leave process, is invoked. 

For those already working in the UK this has created much uncertainty with many EU nationals feeling that they are no longer welcome. This is also impacting on businesses as a result of increased staff turnover and causing a knock on effect on productivity due to unrest within the workforce. 

What Happens Now? 
EU nationals who have been resident in the UK for at least five years can apply for a permanent residence card which can lead to British citizenship being granted. It is thought that over 70% of the estimated 3.3million EU nationals present in the UK have been here for five years or more. 

For workers who have been in the UK for less than five years there is more uncertainty. For the time being until Article 50 is invoked nothing will change, but there may be transitional provisions brought in during the exit negotiations. If free movement were to be restricted during this period it would breach EU regulations which could result in the UK being fined and so it seems unlikely that this would be implemented in the short term. 

What Happens Next? 
What will happen after we leave the EU depends on what is negotiated during the Article 50 withdrawal process. Many believe that the EU will require the UK to continue to allow free movement as part of any trade deal. This would mean that EU nationals would still be permitted to work in the UK. 

Others argue that there should be an indefinite right to remain for those who are already working in the UK although there would need to be sufficient documentation produced to evidence this such as employment contracts, tenancy agreements and so forth. There will also need to be clearly defined rules as to when the cut off point was such as before the referendum result, or at the point Article 50 is invoked or the date it takes effect. It is also not clear whether allowing EU nationals to remain in the UK would also entitle them to work here, although to prevent this would no doubt place strain on the benefits system which any government would be keen to avoid.

In terms of employing EU nationals to work in the UK going forward there is a risk that unless they have already been resident in the UK that they may not be able to acquire permanent residence. Their right to work in the UK is then likely to be subject to some form of points based system which may cause problems in lower skilled roles such as cleaning and waiting tables as points based systems make it difficult for these roles to be filled by low skilled workers unless they have been in the UK for a sufficient period of time to gain permanent residence. Any additional immigration rules would also increase administrative costs for employers. 

What Should We Do To Prepare? 
All workers should be provided with terms and conditions of employment within eight weeks of starting work, but many employers fail to do this which can give rise to potential Employment Tribunal claims and result in an award of compensation. Therefore, employers are advised to make sure that they have employment contracts in place for EU workers currently engaged by them. This will ensure that they have adequate evidence in place if they wish to continue to engage those EU workers going forward but also to avoid future claims from such workers as a result of failing to provide relevant documentation which could potentially prevent their right to remain in the UK. 

It may also be beneficial to meet with EU employees to reassure them as to their position within the business and the fact that no immediate changes are expected in order to try and limit any shock waves or knee jerk reactions. A clear message should also be given that any post referendum ‘hate crime’ or discriminatory treatment of EU nationals will not be tolerated and swift disciplinary action taken where appropriate. 
For more information please contact Joanna Sutton by email, or call 01279 755777.

Joanna Sutton

About the author

Joanna Sutton

Joanna qualified as a solicitor in 2010 and joined Nockolds as a Senior Associate in March 2016 having previously worked and trained at another firm ...

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