Brexit and the EU European Union

The invocation by the government of the United Kingdom of Article 50 of the Lisbon Treaty, which allows a member state to notify the European Union of its withdrawal from the Union, took place on 29 March 2017. A two-year negotiation is now in place, and 29 March 2019 is the official date on which withdrawal  – the “Brexit” – is slated to occur.   During this interim period leading to the 2019 withdrawal date, freedom of movement rules continue to apply.  We discuss below the changes envisioned and rank risk depending on the region and status of workers currently capitalizing on reciprocal citizens rights.

Freedom of Movement

The current freedom of movement rights apply to citizens of the EU and Iceland, Liechtenstein, and Norway (together forming the European Economic Area) living in the UK. Under the EU Treaties, these individuals may live and work in the UK if they are employed, self-employed, self-sufficient, or engaged in studies.  Reciprocally, UK citizens may enjoy the same free movement rights in the EEA countries, and moreover, may move among such countries provided they are engaging in the treaty-authorized activities.

Expected Impact of Brexit to Beneficiaries of Free Movement as of the Withdrawal Date

  •  The European and UK authorities envision a two-year implementation period following withdrawal.  It will be important that individuals who are beneficiaries of free movement on the withdrawal date register for continued benefits and obtain a residency permit.  The framework for the process to preserve citizens rights has been encapsulated in a joint proposal from the United Kingdom and the European Commission, the Joint Report from the Negotiators of the European Union and the United Kingdom Government, December 8, 2017.  The joint report is not binding, but nevertheless confirms that the overall objective of the Brexit withdrawal agreement with respect to citizens’ rights is to provide reciprocal protection for EU and UK citizens. The report specifically notes:
  • Right to Remain. UK citizens in the EU and EU citizens in the UK, as well as certain dependent family members, will have a right to remain in the host state if they legally reside in the host state by the withdrawal date, which is 29 March 2019.
  • Family Reunification. Certain dependent family members of EU citizens or UK national rights holders not residing in the host state by the withdrawal date will be able to join the citizen/rights holder after the withdrawal date for the citizen’s/rights holder’s lifetime.
  • Court Proceedings. UK courts will preside over enforcing the rights of EU citizens in the UK but can refer unclear cases to the European Court of Justice for up to eight years after the withdrawal date.
  • Permanent Residency. EU and UK nationals who reside in a host country in exercise of a treaty right prior to the “specified date” of 29 March 2019, will acquire permanent residency following five years continuous residence in the host country regardless of the withdrawal date (see para 6 of the joint report) .for five continuous years before the withdrawal date will acquire permanent residency. The process for giving EU citizens residency rights in the UK will be under a new procedure, referred to as “settled status.” EU and UK nationals who acquire permanent residence rights in the host state can be absent from its territory for a period not exceeding five consecutive years without losing the right to residence.

While the report provides a framework for the phase two negotiations, resolution of multiple issues related to the migration rights of EU and UK nationals following March 29, 2019, remain unanswered. These issues include:

  • The rights of UK nationals seeking to live and work in EU member states after the exit date remain unresolved. Finalization of the rights of UK nationals may require negotiation with EU member states on a country-by-country basis, or a further resolution of the European Council may provide uniform rights throughout the EU. The express objective of the Withdrawal Agreement, however, is to provide reciprocal protection, and individual member states may apply more favourable terms.
  • The rights of Britons living in the EU remain subject to the next round of negotiation, including whether EU-resident UK citizens will be protected if they move to another EU member state after the withdrawal date. Whether the free movement ability to work cross-border in the EU, which UK citizens who are in the EU prior to March 29, 2019, acquire, will continue after the withdrawal date has not been decided.
  • The report does not make clear what registration process will be required to prove residency rights. The report states only that administrative procedures for applications to prove residency rights will be “transparent, smooth, and streamlined,” and those who already have residency rights in the UK will have their document “converted” free of charge but will be subject to identity, criminality, and security checks. What the criminal check process will be is unclear as well, with the only express reference in the report being that the criminal checks, which may be conducted for “all” applicants, should have a “proportionality” approach.

 

Risk-Ranked Demographics

 

Low Risk European employees residing in the United Kingdom (whether on long-term expatriate assignment or as localized employees). The framework of rules for this category has been outlined in the joint report noted above.  While it is non-binding, it provides practical guidance even now for purposes of employer planning.  We discuss this in detail below.
 Moderate Risk UK employees residing in a particular country in Europe (whether on long-term expatriate assignment or localized employees). These rules will depend on both the EU position on Brexit, and the posture of the particular EU (or EEA) member state in which the UK employees reside. The rules for this purpose are thus not particularly clear. For employees who have accumulated five years of residency in a particular country, however, employers should evaluate whether conversion to permanent residency is valuable.
 High Risk  UK employees who are mobile throughout the EEA region, in that they may roam between locations as allowed under current freedom of movement rules. While there may be some lighter provision for legacy UK nationals, the nature of any continuing mobility is likely to depend on individual member state postures.

Spotlight: European Employees Residing in the United Kingdom (Low Risk)

EEA citizens lawfully in the UK on 29 March 2019 fall into several subcategories:

  • Those who have already acquired permanent residence (based on five years of lawful residence in the host country): these individuals are expected to retain their rights to permanent residency in the UK, subject only to the provision for losing permanent residency based on five years absence.
  • Those who have not yet acquired permanent residence but who will reach five years of lawful residence in the UK by 29 March 2019: these individuals may remain in the UK but will be expected to apply for “settled” residency status by 29 March 2021, the close of the two-year implementation period.
  • Those who are lawfully resident on 29 March 2019 but will not yet be eligible for permanent residency (i.e., they have not accumulated five years of residency or have a right to accelerated residency) may remain and work, study, or seek work, if they apply for a temporary residence permit and once they have completed five years residence, regardless of the implementation period, settled status.
  • Accompanying dependent family members of the above categories who are resident in the host region/country on the cut-off date also are expected to retain their rights, but may similarly be subject to registration processes and security checks.

EEA citizens who arrive in the UK after 29 March 2019 will still be free to live, work and study in the UK during the two-year implementation period. There will be a registration scheme, and security checks will be included as part of this. Unlike those individuals who arrive by 29 March 2019, however, these individuals may or may not be able to remain past the two-year implementation period. Different rules are being considered to address such post-withdrawal entrants.

EEA citizens who arrive in the UK after 29 March 2021, the end of the two-year implementation period, will be subject to new rules, which are in the process of negotiation. We do not yet know if, for example, a new highly-skilled program will be adopted for EEA nationals, or if the current points-based categories will apply.

What Should UK Employers Do Now?

UK employers need to begin their own analysis and risk ranking of their work corps. For EEA citizens in the UK, employers may wish to begin the analysis of applications they will make, and set up some timelines for preparation. The lead time is ideal as the withdrawal will not occur until March 2019. For the other two categories, employers should be on the lookout for guidance as the negotiations continue, but should certainly be aware of potential permanent residency filings that may be made during this interim period.