Brexit: Employment and Immigration Implications for Business

4 mins

Posted on 24 Jun 2016

Following the historic decision of the UK voters, David Cameron has confirmed that he will step down as Prime Minister by October 2016. He has said that it will be for his successor to decide whether to serve formal notice of the UK’s intention to leave the EU under Article 50 of the Treaty on European Union which would trigger divorce negotiations.

In the short-term and pending the Article 50 notification being served and negotiations with the EU taking place, there should not be any immediate changes to the UK’s employment and immigration laws insofar as they relate to EU membership. In fact, no changes are likely to be made until at least the end of the Article 50 negotiation process. This might not be for over two years or more, depending on whether and how quickly the new Prime Minister invokes Article 50.

What does this mean for employers?

If at the end of those negotiations the UK does not agree any form of freedom of movement arrangements similar to Norway, Iceland and Liechtenstein, there would be four employment and immigration-related implications for businesses:

  1. Certain employment protections derived from EU law may be rolled-back by the Government, such as TUPE, Agency Worker and Working Time rights. The “Leave” campaign stated that Brexit could boost the UK economy as it would allow us to reduce the “burdens of EU social and employment legislation”. Whether or not such protections are rolled-back or watered down would be contingent on the terms of any future trading agreements with the EU and how unpopular the Government perceives such acts would be with the electorate.
  2. We fully expect that those EU nationals currently working in the UK will continue to have the right to work here in future due to transitional arrangements that are likely to be agreed. However, at some stage EU nationals already here will be required to obtain documentation evidencing that right to work - most likely by way of a Residence Card or Permanent Residence Cards. Other EU nationals will apply for naturalisation as British citizens where possible, a trend that has been on the rise over the past six months. The ‘right to work’ legislation will need to change to require UK businesses to inspect this documentation before employing EU nationals. Given that there are some three million EU nationals currently in the UK there could well be even greater delays than are already in place and we advise people to apply early to beat the queues. The demand for Residence Cards and Naturalisation has already spiked pre-referendum and we are currently working on many such applications. Please contact us for assistance.  
  3. Following the UK’s departure it is anticipated that businesses wishing to employ EU nationals will be required to sponsor them in the same way that businesses currently sponsor workers from outside of Europe. Those businesses that do not already possess a sponsor licence from the Home Office should consider applying for one if they wish to have the flexibility to employ EU nationals once Britain officially leaves.  
  4. UK nationals needing to visit EU countries for business trips are likely to require visas following the UK’s departure. This could be in the form of Schengen visas or another new visa route. In any event the administration and planning of trips is expected to create a degree of red tape for UK businesses.

There will inevitably be uncertainty during the exit negotiations and we will keep you informed of the key immigration and employment developments.

For further information please contact Anita de Atouguia (Partner, Head of Business Immigration) or Dan Begbie-Clench (Partner, Employment):

The articles published on this website, current at the date of publication, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your own circumstances should always be sought separately before taking any action.

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