What will the impact of the Brexit deal be on your employees?
After a year and a half of negotiations, on 13 November 2018 British Prime Minster May and the European Union reached a technical agreement on the UK leaving the European Union. The deal sets out the general terms on how the United Kingdom and the European Member states will cooperate after the UK has left the EU. The impact for you as an employer with employees inside or from the UK is now also clear. What you should know.
The Brexit deal is 585 pages long and provides for a (temporary) solution to numerous issues: from the Irish border question to fishing, and the consequences for companies and employees working on the other side of the Channel.
No imminent changes at this time
A transition period starts immediately after Brexit and runs from 30 March 2019 up to and including 31 December 2020. During this period the British must continue to comply with all EU decisions (so also new regulations). Hence, EU nationals working in the UK during the transition period will enjoy the same rights and guarantees as today. Also, nothing changes to the situation of British citizens working in a EU member state.
So does anything change during the transition period? It does: the UK no longer has a say in European decision making and it loses its seat at the EU bodies. During the transition period the EU and the UK will negotiate new agreements, for example on trade and security. If no agreement is reached, the negotiators can extend the transition period once.
How long such an extension can or may be has not yet been determined. During the transition period each EU member state can separately agree posting conditions with the UK. These rules then come into force after the transition period.
Turbulent times ahead of us
Whether the agreement will actually be ratified is far from certain. British Prime Minster May did in any case clear a first crucial hurdle on 14 November. Her cabinet then passed the Brexit deal after a marathon meeting. But that was not without a fight: seven members of the government resigned in the following days.
Despite the resistance – also within her own party – May is determined to get the agreement through the British parliament by 31 December. There is in any case still a long way to go (see timeline).
Conclusion: uncertainty remains
What is on the table today could also be binned tomorrow. If, for example, the British parliament votes the deal down, the no-deal scenario becomes a possibility. The consequences for employers in that case are significant. With a hard Brexit there would also be no transition period. On 29 March 2019 European laws would then no longer be in force in the UK.
That is why it is crucial to now already make preparations if you have employees in or from the UK. This can be done by means of contingency planning. In doing so, you first establish which employees work where, and under what rules they will fall. You then get your organisation ready for any scenario. SD Worx will be pleased to assist you here.
What steps still need to be taken?
- 31 December 2018: The British parliament will be voting on the Brexit deal on December 11. Experts point out the crucial importance of speed: the longer parliament dithers, the lower the chance that it will approve the agreement.
- January 2019: If the British parliament approves the Brexit agreement, it will then be the European parliament’s turn to vote on the deal.
- 29 March 2019: Brexit happens: from midnight the UK will no longer be a member of the EU. With a ‘soft’ Brexit the first transition period will start. And a ‘No deal-scenario’? European laws will then no longer be in force in the UK.
- 31 December 2020: The first transition period ends. It can be extended just once. If this does not happen, the new agreements will come into force on 1 January 2021.
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