What do Brexit and the UK-EU trade deal mean for recruitment and staff moves?

8th January 2021

The UK and EU have secured a post-Brexit trade deal following the two sides coming to an agreement at the eleventh hour on Christmas Eve. The European Union (Future Relationship) Act 2020 which brings the trade agreement, known formally as the Trade and Cooperation Agreement (“TCA”), into UK law, received Royal Assent on 30 December 2020.

The overarching effect of the TCA is that the UK and EU can continue to trade without extra taxes and quotas being introduced. However, that’s not to say that it will be business as usual; rather there will be some fundamental differences in the way things operate between the two parties from 1st January 2021 onwards, not least in relation to the recruitment and movement of staff.

Regardless of whether a trade agreement had been reached, the enacting into law of the Immigration Act in November 2020 which ended free movement of people from 1 January 2021 meant that a complete shake-up of the way businesses can recruit new staff from the EEA and Switzerland (EEA), and move existing staff between the UK and the EEA, was inevitable. Businesses in both the UK and EEA will now need to rapidly adjust to these changes if they are to remain compliant with their domestic immigration requirements, while preserving their chances of securing the best talent and moving their staff between jurisdictions to meet operational demands. It should be noted that nationals of Ireland will continue to enjoy the right to live and work in the UK without immigration restrictions.

With so many different changes and fact patterns, the situation is inevitably complicated.  We seek to summarise the main categories and issues here.  We also pose some questions that businesses need to address to consider if they need to be taking steps and/or changing the way that they do things.

Recruitment of EEA Nationals from 1st January 2021

Many UK businesses have become heavily reliant on recruiting from the EEA, especially in sectors such as construction, hospitality, retail and manufacturing where significant proportions of the workforce are EEA nationals. They have become accustomed to being able to carry out such recruitment without any additional procedures or costs that are ordinarily associated with the recruitment of UK nationals due to the principle of freedom of movement, which gave EEA nationals the right to live and work in the UK freely, and vice-versa.

That has now changed, and from January 1st EEA nationals who were not already present in the UK as at 11pm on 31 December 2020 will need to be sponsored by a UK employer that holds a Home Office issued sponsor licence, or demonstrate an alternative legal basis on which they have the right to work, before being permitted to take up employment. Those EEA nationals who were already in the UK on 31 December 2020 have until 30 June 2021 to make an application under the EU Settlement Scheme in order to preserve their rights to remain living and working in the UK on a longer-term basis, and remain exempt from immigration requirements.

That means that the pool from which UK businesses can now recruit without having to follow immigration processes has significantly reduced. Whereas previously only non-EEA nationals required sponsorship, that has now been extended to any non-UK nationals (with the exception of Irish nationals as mentioned above) who don’t have an alternative legal basis to live and work in the UK.

Any UK business which has previously recruited from the EEA or may need to do so in the future to meet its recruitment needs therefore needs to consider making an application for a sponsor licence as soon as possible in order to ensure future international recruitment runs smoothly. Delays in this regard could cause serious operational issues or cause candidates to accept employment from another UK employer who is in a position to complete the hiring process swiftly because they already have the sponsor licence in place.

Businesses will also need to factor in the substantial costs of recruiting from the EEA, which are now on a par with non-EEA recruitment.

Cross-Border Movement of Staff between the UK and EEA

As well as thinking about the recruitment of new staff, businesses are going to have to factor in additional immigration requirements when staff move between the UK and EEA, and the ease with which they have done so previously may well be a thing of the past.

Part 2 of the TCA deals with visas for short-term visits. It notes that both the UK and EU shall provide for visa-free travel for short-term visits in respect of their nationals in accordance with their domestic law, and will notify each other (if possible giving three months’ notice) of any intention to impose visa requirements for short-term visits against nationals of the other party (this applies without prejudice to separate free movement arrangements between the UK and the Republic of Ireland).

Staff travelling from the EEA to the UK

Visitor rules

The UK’s visitor rules allow for visits for certain specified business activities for up to 6 months. These permitted activities include attending meetings, conferences, seminars and interviews, negotiating and signing deals and contracts, carrying out site visits and inspections and being briefed on the requirements of a UK based customer, provided any work for the customer is done outside the UK.

There are specific provisions for intra-corporate activities which allow an employee of an overseas company to advise and consult, troubleshoot, provide training, share skills and knowledge on a specific internal project with UK employees of the same corporate group, provided no work is carried out directly with clients. In addition, an employee of a foreign manufacturer may install or service equipment purchased from the manufacturer by a UK company, provided that a contract of purchase or lease is in place between the parties.

The UK has confirmed that EEA nationals will be considered to be “non-visa” nationals from 1 January 2021, which means that there will be no requirement on them to apply for a visit visa before travelling to the UK and the application can instead be made on arrival. However, whereas EEA nationals could previously enter the UK for any business or work purpose without question, they may now be required to satisfy border officials that their visit is for a permitted reason. While it remains to be seen how the Home Office will manage this in practice given that most EEA nationals will continue to use eGates to gain entry to the UK, under the visitor rules individuals can be required to show border officials that they are entering to undertake permitted activities.

Business visitors from the EEA may therefore now be well advised to carry with them certain supporting documents when they seek entry clearance at the UK border, such as a letter from their employer which confirms the details of their overseas employment and the purpose of their visit, and other evidence that they meet the requirements of this route. They should also be prepared to answer questions consistently with the information provided in the supporting evidence, in particular in relation to the activities they intend to carry out during their visit. Border officials could refuse entry under the visitor rules if they are not satisfied that the activities fall within the permitted list.

Staff being moved from an EEA (or non-EEA) group company to work in the UK outside the parameters of the short-term visit visas will require sponsorship under the points based system, either under the Skilled Worker route or the Intra-Company transfer route depending on the circumstances.

Frontier workers

Another category of staff that UK businesses will need to identify are EEA nationals who live in the EEA but come to the UK for work occasionally, e.g. a French national who makes a weekly trip into a London office.  Whilst such arrangements were unrestricted from an immigration perspective pre-Brexit, from 1 July 2021 EEA nationals who fall within the frontier worker category and meet the eligibility requirements will need to hold a frontier worker permit in order to enter the UK under this type of arrangement (unless they are eligible for and make a successful application under the EU Settlement Scheme). The application process for frontier worker permits has been open since December 2020, and businesses should audit their workforces to identify individuals who may require one to continue existing work arrangements.

Staff travelling from the UK to the EEA

The EU-UK Withdrawal Agreement (the agreement that preceded the TCA) permits UK nationals to spend a maximum of 90 out of 180 days in the Schengen area (26 European countries without border controls between them, including Austria, Belgium, France and Germany) without a visa requirement, including for permitted business purposes such as attending business meetings. The specific rules for what activities are permitted in each country vary and should be checked. This introduces a new restriction on the amount of travel that is permitted, and the types of activities that are permitted, without immigration controls, which previously didn’t exist. It is important to note that the 90 day limit is cumulative throughout all Schengen area countries, so business travellers who frequently travel to multiple European countries could quickly reach this maximum.

Further, other activities, such as transferring employment to a different branch of the business in the EU country, or carrying out activities which amount to constructive work, will now likely require a visa or work permit, and the rules will differ depending on the country in question. More details are likely to emerge from the EU countries on their requirements in the coming months.

From late 2022, UK nationals will require a visa waiver in the form of an online European Travel Information and Authorisation System application prior to travel to the Schengen area.

Covid-related travel restrictions

Of course, employers requiring staff to travel for business purposes must also keep on top of the constantly evolving requirements and travel restrictions imposed across the globe due to the pandemic.  Travel restrictions imposed in England (the rules vary across the UK) as a result of the third national lockdown which started on 5 January 2021 mean that international travel is only permitted where the individual has a legally permitted reason to leave their home. Whilst work is a legally permitted reason, this is caveated by the overall requirement in Government guidance that work should be undertaken from home unless it is “unreasonable” to do so. Employers should think very carefully therefore before requiring staff to travel for work to ensure they are not encouraging a breach of the lockdown rules. Where work cannot be done remotely (or business trips delayed until after the lockdown), employers should also bear in mind the different requirements countries have introduced regarding incoming travel; including restrictions on acceptable reasons for travel, quarantine periods and requirements for negative Covid tests, and ensure their staff are fully aware of the up-to-date requirements of their destinations.

Concluding message

The key message to remember is that previous visa-free, restriction-free travel between the UK and EEA is now be subject to immigration rules and regulations and will require careful planning and thought.

Five questions that all UK businesses should urgently be asking themselves are:

1. Are they likely to need to recruit from outside the UK (and Ireland) in the near future, if so do they need a sponsor licence?
2. If they already have a sponsor licence, are they aware of how the sponsorship criteria has changed by the introduction of the new points based immigration system from 1 January 2021?
3. Are they likely to require workers to come to their UK establishment as business visitors from the EEA or beyond, if so do they know how to support the individuals to successfully gain entry to the UK?
4. Do they employ EEA nationals in the UK whose place of residence is in the EEA and may need a frontier worker permit?
5. Do they intend to send UK staff to EEA group companies in the near future, and if so will the purpose of their visits fall within the short-term visitor rules or will other immigration permissions be required?

The Walker Morris Business Immigration team is here to assist with any queries on these issues, please contact a member of the team using the details below.