With most of 2020 focussing on the Covid-19 pandemic, we must not forget that the Brexit transition period ends 31 December 2020.  This hot topic article focusses on Brexit and the latest developments in terms of it’s impact on HR and managing and recruiting your people.

Please note that next month’s hot topic will be looking specifically at the new Points Based Immigration System when recruiting from outside the UK from 1 January 2021 and the differing types of entry to the UK for differing sectors.  We will also be starting to publish further guidance and articles in due course to support you in the lead up to 1 January 2021.

Brexit – where are we now?

The UK is no longer a member of the European Union and is currently in a transitional period in which the UK and EU must negotiate terms for the new relationship moving forward.  This transition period ends 31 December 2020.  If no agreement is negotiated, then from 1 January 2021 the UK will leave without a deal.

Even though the UK has left the EU, it is still treated as a member state, including for the purpose of adhering to its obligations under EU law and the continued jurisdiction of the Court of Justice of the European Union.

In terms of the Covid-19, the pandemic has not resulted in any delays to the expiry of the transition period.  It remains 31 December 2020.

If your Brexit planning has been put on the back burner recently (which is understandable), then now is the time to put it to the top of your agenda.

EU Employment Legislation

Existing UK legislation

A significant amount of UK employment law has their basis in EU legislation.  This means that for our own UK domestic employment law, it currently must not fall below the standards which are set by the EU.

From 1 January 2021, employment rights that are currently guaranteed by EU law will no longer be guaranteed.  It will be for the UK to either amend or remove any of the existing employment rights moving forward.  Although, the European Union Withdrawal Agreement Act 2020 no longer contains a provision that the UK will retain these rights, the current UK Government have committed to voluntarily ensure that they do.

Creating New Legislation

From 1 January 2021, the UK will not be able to translate any new EU legislation into UK domestic law, instead, the UK will set its own employment legislation.  Furthermore, any new employment case rulings arising from the European Court of Justice (ECJ) will no longer have a binding effect on UK law. 

UK Employment Tribunal Decisions

UK Employment Tribunals will not be able to refer any matter to the ECJ for its own interpretation on whether EU directives have been implemented.

Tribunals will also not be bound by any principals laid down or decisions made by the European Court of Justice on or after 1 January 2021.

European Works Councils

Currently, UK based employees can ask their employer to set up a European Works Council (EWC).  An EWC is a forum in which an Employer providers information and consults with employees on issues affecting employees in 2 or more EEA countries.  However, from 1 January 2021, employees will no longer be able to do so.

If a request however is received up until 31 December 2020, then it will be allowed.

Employer Insolvency

If an employer becomes insolvent from 1 January 2020, the rights of UK and EU employees working in the UK will not change.  For those UK employees working in an EU country for a UK employer, then in an insolvency situation, employees may still be protected by the national guarantee fund, established in the EU country in which they are working.  However, each EU country may have different rights defined and so legal advice will be required at the time from the relevant European country.

Processing Data

The UK is committed to maintaining high standards regarding GDPR and are likely to incorporate it into UK law after Brexit.

UK businesses that receive personal data from contacts in the EEA or that have offices in the EEA will need to comply with both the UK and EU data protection regulations from 1 January 2021 and therefore will need to take additional steps to ensure that the data can continue to flow after 31 December 2020.

In light of the Government’s indications that it intends to incorporate current GDPR requirements into UK law then now would be a good opportunity to conduct a GDPR audit to identify if there are any areas of risk in regards to you currently manage data.

EU Nationals already working in your organisation

EU, EEA and Swiss nationals and those who are a family member of an eligible person of Northern Ireland who currently work for a UK based organisation can apply to stay in the UK after Brexit under the EU settlement Scheme.

Provided they have entered the UK by 31 December 2020, they will be permitted to live and work in the UK after Brexit.  A grace period has been given to EU nationals to allow them until 30 June 2021 to apply for the settlement scheme.

For those employees who have indefinite leave to enter or remain, they can continue to live in the UK without applying to the EU Settlement Scheme.  However, if they spend more than 2 years in a row outside the UK then they lose their settled status.  They can avoid this by applying for the EU Settlement Scheme and if granted, they will get settled status meaning that they can spend up to 5 years in a row outside the UK without losing their settled status.

If an employee has lived in the UK before 1973, they will have been given indefinite leave to remain status. In which case, they do not need to apply for the EU Settlement status.

The deadline for applying for the settlement scheme is 30 June 2021 however the employee must already be in the UK by the 31 December 2020.  It will be your employee’s own responsibility to apply.  As the Employer of an EU national, you cannot require them to do it.

From a resource planning perspective, you will need to be satisfied that your employees right to work remain valid, and so it is reasonable for you to make enquiries with your employees as to their current status.  It would be wise to put in place a robust process that allows you to monitor the situation as it will enable you to identify and understand any implications for your business.

If your employee is granted a settlement status then they will be given either settled status or pre-settled status based upon how long they have lived in the UK at the point of applying and the rights gained will differ depending on which status is granted. However, regardless of the type of status granted, the individual will be able to work in the UK as well as access public funds such as benefits and pensions, where eligible.

Recruitment from outside the UK: New Points Based Immigration System

What is it?

A consequence of Brexit is that the free movement of people within the EU to the UK will end and so, from 1 January 2021 changes will be made to how you recruit from outside of the UK.  A new points-based immigration system will be introduced, which will treat EU and non-EU citizens equally in terms of work in the UK.

The applicant will be required to score at least 70 points through a process that awards points for a variety of differing characteristics, such as salary level, qualifications and if the role is in shortage.

The new system will be for EU nationals who arrive in the UK on or after 1 January 2021 and an Employer will be required to apply for a Sponsor Licence to recruit from outside the UK.

There are two different types of sponsor licences that can be applied for, so it is important to consider the organisation’s future recruitment needs.  You need to assess whether you anticipate a decline in applications because of Brexit, or perhaps you have already seen a dip in the level of EU workers alongside a review of  the type of job roles that you employ and whether there have been  any challenges from recruiting within the UK in the past.  You will also need to consider  whether the job roles within your organisation are likely to meet the required skill level that has been defined by the Government as part of the scheme, as each occupation type will have its own defined points in which the applicant must earn in order to achieve the minimum 70 points required to work in the UK.

You can then determine whether it is going to be important for you to apply to become a sponsor.  If you do, then it is recommended that you apply sooner rather than later.  Applications can be made directly through the Government’s website https://www.gov.uk/apply-sponsor-licence which also has guidance on how to apply.  https://www.gov.uk/apply-sponsor-licence

Transition Period

To transition to the new immigration system, Employers will be given six months to continue to accept passports and national identity cards of EU nationals as evidence of their right to work in the UK.  Alternatively, EU nationals may opt to provide their evidence through the Government’s online right to work checking service.  When using this method, the employee will need to provide you with a share code either directly themselves, or via the online service where you will then receive a notification email.  https://www.gov.uk/check-job-applicant-right-to-work

Immigration Skills Charge 

The current immigration skills charge that is in place when recruiting non-EU foreign nationals will be extended on the 1 January to both EU and non-EU nationals.  Employers will be required to pay £1,000 per skills worker for the first 12 months with an additional £500 charge for each subsequent six-month period.  There will also be discounted rates for small businesses and charities.

What is next?

Our next hot topic will be based solely on the new points-based immigration system, and we will be running a free upcoming webinar on 12 November.

The immediate steps for business to prepare for 1 January 2021:

  1. Brexit should be the top priority to ensure that you can be compliant come 1 January 2021, although unfortunately, it is at an extremely challenging time for businesses in terms of the pandemic.
  2. Review your recruitment needs for 2021 to determine whether you are likely to need to recruit from outside the UK and if so, apply to become a sponsor
  3. Understand your current position in terms of whether you already employ EU nationals. What roles do they carry out? What would the risks be to the business if they were not to apply to the settlement scheme? How would you backfill?  Devise a plan in which you can monitor the situation and associated risks
  4. Carry out a GDPR risk audit to assess how your business performs regarding the management of data
  5. If insolvency is a threat to your business and you employ UK nationals in the EU, then start seeking advice and guidance around the law for that country in terms of employee rights in the case of insolvency
  6. If you have a European Works Councils, then review your existing EWC agreement.  The Government are encouraging business to continue to allow UK workers to be represented on EWCs so consider whether your business wants to do this.  Consider the benefits of the forum in terms of the positive impact they can have on employee morale, engagement and is an effective way to communicate and consult.

Further Support

Webinar Recording:  for further information you can watch HR Solutions’ recently recorded webinar Brexit: the latest implications for HR, on demand and at your convenience.

HR, Health and Safety Advice: HR Solutions are here to help with advice and support on any employment and workplace health and safety related issues; to find out more contact us online or call us on 0844 324 5840.

Victoria Templeton

About Victoria Templeton