Brexit: The End of the Beginning

18 February 2020 - Reading time: 4 Minutes

International payroll
More than three years after voting for Brexit, the United Kingdom finally left the European Union on 31 January 2020. This momentous event will have far-reaching consequences for businesses and individuals on both sides of the Channel - but not just yet. All those late-night negotiations in Brussels and political upheavals in Westminster have brought us only to what Winston Churchill, in a very different context, called ‘the end of the beginning’.

Working Cross Channel During the Transition Period

Under the agreement over the terms of the UK’s departure from the EU, we have now entered a transition period.

This is due to last until 31 December 2020, but can be extended by up to two years, if both parties agree to this before 1 July 2020. However, UK Prime Minister Boris Johnson has ruled out any extension.

During the transition period the UK will no longer take part in EU decision-making or have seats in institutions such as the European Parliament or Council of Ministers. It will, however, continue to be part of the EU customs union and single market, with all that this involves, including freedom of movement. So until the end of the transition period, EU laws will continue to apply to both EU nationals and those from the wider EEA working in the UK, and vice versa.

This means, for example, that Belgians can still be temporarily posted to the UK while retaining Belgian social security rights. The same goes for British nationals temporarily posted to Belgium or other EEA countries.

How Could the Future Relationship Between the UK and EU Look?

The transition period is meant to allow the EU and the UK to work out a new relationship covering not just trade, but other areas, including data protection and security. The Political Declaration accompanying the Withdrawal Agreement sets out the framework for this future relationship, committing both sides to ensuring open and fair competition and a level playing field.

It is already clear that interpretations of these commitments differ. EU chief negotiator Michel Barnier has warned that there can be no trade deal unless Britain agrees not to undercut EU regulations, and to respect the European Convention of Human Rights, data protection rules and effective dispute settlement mechanisms.

Boris Johnson, by contrast, has stressed that any agreement cannot “include any regulatory alignment, any jurisdiction for the CJEU over the UK’s laws, or any supranational control in any area, including the UK’s borders and immigration policy”.

These statements set the stage for tough negotiations that will take place within a very tight timetable. If they fail to produce a result by the end of this year and the transition period is not extended, the UK would have to trade with the EU on World Trade Organization terms, while cross-Channel workers and their employers would face considerable uncertainty.

Planning for the Unknown

Employers need to plan for two possible outcomes: the “ambitious, broad, deep and flexible” UK-EU partnership envisaged by the Political Declaration, and a no-deal scenario.

UK-based firms looking to hire people from the EEA, and EU-based firms intending to recruit in the UK, would be well advised to do so before the transition period ends. This is because the Withdrawal Agreement guarantees that EU citizens currently living in the UK, and UK nationals living in the remaining 27 EU member states will have broadly the same rights as they had before Brexit. So they, along with their family members, will be able to continue to live and work where they are and travel freely between the UK and the EU.

People crossing the Channel in either direction for work or as business visitors after 1 January 2021 will not have the same protection and may need their employers’ help to comply with new immigration rules. The European Parliament has said that in the event of a no deal Brexit, British nationals will be able to enter the EU without visas for short periods, provided the same applies to EU nationals travelling to the UK.

The European Parliament has also said that long-term solutions depend on the outcome of future discussions. We have obviously not yet reached the beginning of the end of the long-running Brexit saga.

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Visit SD Worx to fast-track your preparations for Brexit.


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