European Union: Brexit Update - 18 September 2018

Last Updated: 21 September 2018
Article by Steven Bostock and Natalie Loader

The draft agreement

On 29 March 2018, the UK and European Union published the Draft Withdrawal Agreement (the "Draft Agreement").  The Draft Agreement states that there will be a transitional period from the date the UK leaves the EU of 29 March 2019 to 31 December 2020.  During this transitional period, Freedom of Movement rights will continue to operate and therefore EEA nationals and their family members may continue to come to the UK to live, work and study. 

The transitional period - "settled and "pre-settled" status

In June 2018, the Home Office published further details on the steps EEA nationals will need to take in order to continue living legally in the UK.  Between 29 March 2019 and 30 June 2021, any EEA nationals and their family members who commenced living in the UK before 31 December 2019 and who have not obtained British citizenship will need to apply under UK law for a document which evidences their immigration status in the UK is either "settled" or "pre-settled". If they fail to apply by 30 June 2021 they will be in the UK unlawfully, even if they currently have a registration certificate or permanent residence document issued under EU law.  Irish citizens will not be required to apply under the new scheme but their non-EEA national family members will be required to obtain status under the scheme. 

EEA nationals and their family members who have been in the UK for at least five years should apply for settled status. A grant of settled status would mean that the EEA national and their family members are permanently resident in the UK and free from immigration restrictions.  After holding settled status for one year, the EEA national and their family members could apply for British citizenship if desired. 

EEA nationals and their family members who have been in the UK for less than five years should apply for pre-settled status.  This should ensure that from 1 January 2021, should a visa system be imposed on EEA nationals, an EEA national and their family members who have been granted pre-settled status will not be subject to any new visa regime and be on a course to permanent residency.  After five years in the UK, they should be able to make an application for settled status to be recognised as a permanent resident in the UK.

The Home Office has stated that the application process for settled and pre-settled status should be "simple and straight forward", with EEA nationals and their family members being required to evidence just three key requirements:

  1. their identity;
  2. their UK residency; and
  3. that they do not have any serious criminal convictions.

Currently, under EU laws, if an EEA national has exercised Treaty rights as a student or as a self-sufficient person, the EEA national must have held comprehensive private medical insurance during any period of study or self-sufficiency. The comprehensive sickness insurance must cover the EEA national and their family members. The Home Office has stated that to apply for settled or pre-settled status, EEA nationals will not be required to provide proof of holding comprehensive sickness insurance, even if it was a requirement while the UK remained a part of the EU for that EEA national to be lawfully exercising freedom of movement rights in the UK under EU laws. 

Nothing is agreed until everything is agreed - Steps to take now to protect your position

The rights of EU citizens in the UK will not change until 1 January 2021.   However, the proposals for "settled" and "pre-settled" status remain subject to Parliamentary approval and it is also not yet clear what immigration regime will be in place after the transitional period ends. Furthermore, any registration or visa scheme will require the consent of the EU and a there still exists a possibility that we will leave the EU with no deal. Therefore, businesses and EEA nationals currently in the UK should take steps to strengthen their positions in the post-Brexit immigration landscape by considering the following:

Protect your business' position

Conduct a full audit of your workers in the UK to identify employees who will need to obtain settled or pre-settled status between 29 March 2019 and 30 June 2021. It is important to communicate the requirement to obtain the necessary status to your workforce and monitor when applications are being submitted.  Please ensure you see any settled or pre-settled status documents as soon as they have been received by your worker and that you take copies to keep on the worker's HR file as evidence of their right to work in the UK. You should keep a spreadsheet of who has obtained the correct documents and who has not. In this way, should any employee fail to obtain the necessary paperwork and a visa system be imposed, those who require a visa will be already known and the company will be well-placed to take immediate action to minimise any risk of illegal working.

If your business does not have a Tier 2 sponsor licence yet, consider applying for one

Non-EEA nationals who require a visa to work in the UK currently do so under a Tier 2 visa. With unemployment currently at 4%, our view is that any new system is likely to put tremendous pressure on the Tier 2 visa route, which is already operating at capacity. It is unlikely that UK employers will be able to find all of the skilled talent that they require in the UK in the short term and a sponsor licence may become invaluable. Post-Brexit, the application process for a Tier 2 sponsor licence may become protracted due to the number of companies making applications, leading to inevitable recruitment delays.

What if your business does already have a sponsor licence?

Businesses who already have a Tier 2 sponsor licence should consider their skilled labour needs in the medium-term. It may be that they need to apply for an increased certificate of sponsorship allowance to bring in foreign skilled labour. It is only likely to get more difficult in the future as the system gets more congested and new caps are introduced, so acting early may save on difficulties later.

Consider your potential future requirements for unskilled workers 

Tier 2 workers must be working in a role which is skilled to RQF level 6 or above (i.e. degree level or above). Employers should consider their requirements for roles which are not degree level roles to identify where in the business recruitment shortages may effect.

Tier 3 of the current visa system is an inactive tier for unskilled workers, but there is a chance that, to cope with the burgeoning need for visas for EEA workers, it will be brought into force.  Businesses should consider their needs in the medium-term to be in a position to react quickly once proposals in this regard are published. 

Encourage your EEA employees to seek documentation confirming their immigration position in the UK.

Although the official message from the Home Office is that EEA nationals need not take any action now, we recommend that any EEA national already in the UK who has not yet applied under EU law for a Registration Certificate or Permanent Residence makes such applications now. The Home Office has indicated that those who hold Permanent Residence documents will have a streamlined process for making settled or pre-settled applications from December this year.

  1. Registration Certificate

    EEA nationals who have been in the UK for less than 5 years should formally register their residence in the UK by applying for a Registration Certificate. A Registration Certificate will prove that the individual is in the UK legally exercising Treaty rights. 
  2. Permanent Residence

    EEA nationals and their family members who have been in the UK for five years or more may be eligible to apply for permanent residence. One year from the date the EEA national and their family members are deemed permanently resident in the UK, British citizenship applications could be made. Some applicants may be able to obtain British citizenship faster if they apply now for permanent residence rather than waiting to apply for settled status under the new scheme.
  3. Settled and Pre-Settled

    Applications for settled or pre-settled status will open in December 2018.  Under the new settlement scheme, it seems that applicants will not need to show that they have been exercising Treaty rights through work, job-seeking, self-employment, study or self-sufficiency and it will not be necessary to have held comprehensive sickness insurance. As such, some EEA nationals could benefit by waiting to apply under the new settlement scheme if they did not hold comprehensive sickness insurance for any period or self-sufficiency or study in the UK, or if they have difficulties evidencing their exercise of Treaty rights.

The above recommendations are subject to change as Brexit negotiations progress. The Government should announce further details in the coming months but as David Davis has stated, "Nothing is agreed until everything is agreed" and the devil will, as always, be in the detail.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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