Multinational companies with a presence in Europe or with an EU migrant workforce will be dealing with the impact of Brexit in 2019 and beyond. It is still unclear how Brexit will unfold on 29 March 2019. If the current form of the Withdrawal Agreement applies, there will little change to EU derived employment legislation and EU citizens will continue to have the right to work and live in the UK until 31 December 2020 and can apply for settled status under the EU Settled Status Scheme. In the case of a “no deal” Brexit, the European Union (Withdrawal) Act 2018 sets out complex provisions on how far EU law and decision will continue to apply post Brexit. EU citizens in the UK can protect their position and apply for settled status under the EU Settled Status Scheme from 29 March 2019, provided they were in the UK before Brexit or any applicable transitional period. A reciprocal protection for UK citizens living and working in the EU will apply under the withdrawal agreement but it is unclear what the position is if there is a “no deal” Brexit. Companies should carry out an audit of their EU migrant workforce in the UK and UK citizens working in their EU/EEA offices and support their employees/workers through this process.
The UK government will also need to decide on new immigration rules which are to apply after Brexit or at the end of any applicable transitional period. The current proposal is to have an uncapped highly skilled and intermediate skills based system applicable to EU and Non-EU migrants with a salary threshold of £30,000. There are transitional proposals for low skilled workers.
Brexit will also have an impact on European Works Council (“EWC”) established in the UK and UK law governed EWC agreements. Companies will need to consider whether they continue to meet the threshold to have a EWC, whether the UK company can continue to participate or whether they need to move their EWC to another EU jurisdiction or appoint a representative in an EU country to represent UK employees and senior management. Parliament has now approved the Employment Rights (Amendment) (EU Exit) Regulations 2019 (“Regulations”). These amend the UK’s EWC legislation in the event of a “no-deal” Brexit. The Regulations will:
- end the right of employees to request information on whether their employer falls within the scope of the EWC Directive and, if so, request the establishment of a EWC; and
- end the application of the UK’s EWC legislation to UK-based businesses or non-EU-based businesses that had designated a representative agent in the UK before Brexit.
The ending of the UK’s legal framework for operating EWCs and the UK’s withdrawal from the EU’s legal framework is likely to frustrate current UK law governed EWC agreements.