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What effect will Brexit have on immigration?

Changes to immigration laws are likely to be one of the most significant consequences of Brexit for UK employers, especially those who rely on EU…

Changes to UK immigration laws are likely to be one of the most significant consequences of Brexit for UK employers – especially those who heavily rely on EU workers.  There are currently around 3 million EU workers living and working in the UK with a substantial number of those working in London.

At this early stage, we do not know exactly what immigration changes will result from Brexit and when they will take effect. However, we outline below some of the possible options.

Current position

For UK employers it is currently very straightforward to employ EU workers and their family members.  The ability to live, work and study anywhere within the EU has been an integral part of EU membership for decades, giving UK employers access to a broad and flexible labour market.  Such employees do not need any sort of sponsorship or work permit. EEA workers and their family members have been able to live and work in the UK by exercising their treaty rights with relative ease. They can usually apply for permanent residence in the UK after a period of 5 years.  An employer’s only obligation is to carry out right to work checks on such staff.

For multinational employers with sites across Europe, transferring staff throughout Europe has been very simple to date with little planning and no paperwork needed in many cases.

Future position: some options

The position of EU workers following the UK’s exit from the EU is uncertain. It is clear that the UK will need to come to some sort of economic agreement with the EU for trade purposes but at present it is unclear what that agreement will involve. 

 On the one hand European leaders have been asserting that access to the single market will be conditional upon the UK continuing to recognise freedom of movement of workers.  However, new Prime Minister Theresa May could still seek to negotiate a new agreement with the EU which does not recognise free movement of workers and which allows the UK to control EU migration.  

Experts on European law have indicated that if the UK seeks access to the EEA (allowing the UK access to the single market) it would be extremely unlikely that the UK could do this without recognising the principle of freedom of movement of workers.  This is because any one of the existing 27 member states, the European Parliament and members of the European Free Trade Area each has the right to veto any agreement that does not recognise freedom of movement.  So a deal on that basis would need to be unanimous (and is therefore unlikely).

Options

If the principle of freedom of movement is retained, there may be minimal impact for UK employers.  However, as the ‘Leave’ campaign was heavily focused on controlling immigration, there may be political pressure to avoid this outcome.

If freedom of movement is not retained, then it is likely that the UK’s current immigration rules will need to be completely revamped to take account of the needs of the UK economy post Brexit. 

Points-based immigration system

Until now the points based immigration system has been restricted to skilled workers (graduate level or above) and a limited number of jobs which are on the shortage occupation list. Although Tier 3 of the points based system is for low skilled workers, this Tier has never operated in any form since the points system commenced in 2008.  This is because the UK labour market has not had a shortage of low skilled workers due to the considerable numbers of EU workers from the new EU accession countries who have been able to fill any gaps.   

That position would change if freedom of movement of EU workers is discontinued.  The UK would be likely to need certain lower skilled workers so Tier 3 may be opened for this purpose.  The current immigration cap would also need to be increased significantly to deal with the needs of UK employers.

Sponsor licences

If the current points based immigration system is expanded this is likely to lead to an increased number of employers having to apply for Sponsor Licences.  This is also likely to lead to increased costs, administration and complexity for employers in getting to grips with the new rules.   Employers who want to have a Sponsor Licence will have to satisfy certain immigration compliance requirements and pay for a visa going forward.  They are also likely to be more restrictions in terms of who they can recruit. 

Looking forward, it may become more critical than ever for employers to retain their Sponsor Licences as the number of sponsored workers may be vastly increased if the principal of freedom of movement does not continue.

It is not yet clear when we will know more about what the new immigration position will look like.  We will update you when that becomes clearer.

Immediate issues regarding EU workers

An immediate issue for some UK employers is dealing with the concerns and uncertainty of EU workers who are already living in the UK or who are due to come to the UK shortly.

We have been told that Article 50 of the Lisbon Treaty (which will initiate the UK’s withdrawal from the EU) is unlikely to be triggered until the Autumn meaning formal negotiations are unlikely to begin for several months. Negotiations may take some time to progress thereafter and may take 2 years (or longer) to be finalised.

Calls for emergency legislation to be passed to give certainty to EU workers about their right to remain in the UK have been given short shrift so far by the Government.  Therefore it appears that EU workers already in the UK will have to wait for some time to have clarity about their situation.  Although UK employers can seek to give some assurances to these workers, it is not possible to provide complete assurances beyond that which the Government will confirm. 

We would expect that for those EU workers already in the UK, some protection of their positon will be negotiated to allow them to stay.  However, it seems likely that the Government will want any agreement that is reached to be reciprocal (in that the UK will seek to negotiate certain protections for UK citizens working in the EU).  We do not yet know what approach other member states may take in such negotiations.

We also do not know at present what ‘cut off’ date may become relevant if EU workers are given certain rights and protections.  It is likely that the UK would want to avoid an influx of workers from the EU and therefore a cut off date prior to the UK’s exit from the EU seems likely. 

Elaine McIlroy (elaine.mcilroy@weightmans.com) is a Partner in the Employment, Pensions and Immigration Team and is based in Glasgow. If you have any concerns regarding your business immigration arrangements post-Brexit please do not hesitate to get in touch with Elaine or speak to your usual Weightmans contact.