Brexit and Immigration - Deal or No-Deal?

The end of Freedom of Movement on 31 October?

Now that Boris Johnson has taken the reins as the Prime Minister of the UK, a 'no-deal' Brexit is being talked about as being more likely than ever. Employers who have been expecting the comfort of a lengthy transitional period to get to grips with any changes that might impact them are now considering how to prepare for leaving the EU on 31^st October 2019.

The headlines in the press last week that Freedom of Movement in its current form will end on 31^st October 2019 sent some shockwaves around businesses in the UK. While, the UK Government has been clear for many months that the rights of EU nationals will change following a 'no deal' Brexit - meaning that Freedom of Movement was already to change - the previous UK Government had informed employers that some transitional measures would be in place to cushion the blow for a period of time. Those measures included a right for EU nationals to enter the UK for up to 3 months without having to apply for a visa and the EU Temporary Leave scheme which would allow EU nationals the right to apply to live and work in the UK for a period of 3 years.

The press headlines last week suggest that the new UK Government plans to review and, from its point of view improve 'the previous government's plans for a new immigration system' and it has been confirmed that these plans will be set out shortly. We do not yet know which aspects of the new immigration system are to change but hopefully the detail of that will become clear. We do know that the main issue for employers will be getting to grips with these new changes and responding to them quickly.

Below, we outline some of the key immigration implications of both a 'deal' and a 'no-deal' Brexit. We also provide some practical tips for employers on how to prepare for those changes.

EU Settlement Scheme

The EU settlement scheme was announced by the UK Government in 2018 and it was described as a mechanism to protect the rights of EEA and Swiss nationals and their family members who live in the UK following Brexit. Under the scheme, EEA and Swiss nationals will qualify for Settled or Pre-Settled Status. Applicants under the scheme need to satisfy identity checks, meet the appropriate residency requirements and they will also undergo a criminal record check.

Residency Requirements

EEA and Swiss nationals who have been 'continuously resident' in the UK for 5 years will be eligible for Settled Status (an indefinite right to remain in the UK). 'Continuously resident' means that the individual has been present in the UK for at least 6 months in every 12 month period. If an absence from the UK is longer than 6 months in any 12 month period, then usually continuous residence will have been broken. There are a few circumstances where continuous residence will not be broken, such as:

• A single absence of 12 months which was for an 'important reason', such as pregnancy, childbirth, serious illness, study, vocational training or an overseas posting;
• any period of absence on compulsory military service; or
• a period of absence on a posting on Crown service.

Employers should be mindful that lengthy overseas secondments or breaks in residence for other reasons may impact someone's immigration status in the future.

It is important to note that while Settled Status provides an 'indefinite' right to remain in the UK, such leave can be revoked in some circumstances, for example, where an individual spends 5 continuous years outside of the UK (or 4 years if you are a Swiss national). This will be another change from the current rules whereby an EU national could leave the UK for any length of time and return in the future. There will therefore be less flexibility going forward.

Those EEA and Swiss nationals who have less than 5 years' continuous residence in the UK will be granted Pre-Settled Status. This grants the individual with a 5 year (temporary) visa to allow them to accrue 5 years continuous residence. They can then be granted an indefinite right to remain in the UK through Settled Status. It is important to note that Pre-Settled Status cannot be extended any further than the 5 years granted - so it is critical that individuals with Pre-Settled Status are conscious of their absences from the UK and the impact that this can have on their 'continuous residence'.

They will not be able to apply on a second occasion. Non-EEA and Swiss nationals can also qualify under the scheme based on certain relationships that they have with an EU national (such as being the partner, spouse, child or grandchild under the age of 21, dependent parent, grandparent, great-grandparent or other relative) based on the above.

Brexit with a 'Deal'

In the event that the UK agrees some form of withdrawal agreement with the EU, it is assumed that the aspects of the deal which was negotiated last year and which relate to immigration to the UK by EEA and Swiss nationals will not be impacted. Accordingly, the position in a Deal Brexit is likely to be as follows:

• A transitional period will apply following the 31^st October 2019. This will last until the 31^st December 2020 (the 'Transition Period');
• The EU Settlement Scheme will apply to EEA and Swiss Nationals and their family members who wish to enter the UK by the end of the Transition Period;
• Any children born or adopted by those who qualify for the scheme after the end of the Transition period will have their rights protected;
• EEA and Swiss Nationals and their family members who wish to enter the UK after the end of the Transition Period will be subject to the rules of the UK's new Immigration Skills System, which will come in to force in January 2021;
• All applications under the Settlement Scheme must be made by 30 June 2021; and
• Right to work check rules will be updated to reflect the end of free movement, but these changes are not expected to be implemented until after 30 June 2021.

Therefore, EEA and Swiss Nationals who wish to enter the UK following the date of Brexit will be able to continue to do so in the same way they do now up until the end of the Transition Period. The main difference EEA and Swiss nationals will face in the case of a 'Deal' Brexit is the need to evidence their right to be in the UK through the Settled Status Scheme. However, as the policy on this is changing regularly and with little notice, employers will need to stay up to date with any changes.

No-Deal Brexit

In the event of a 'no-deal' Brexit, the UK Government has also announced that the EU Settlement Scheme will still be implemented to protect the rights of EEA and Swiss nationals. Accordingly, the position in a No-Deal Brexit will likely be as follows:

• No transitional period will be implemented following the 31^st October 2019 (the 'October Deadline');
• The EU Settlement Scheme will apply to EEA and Swiss Nationals and their family members who were resident in the UK on exit day, which is currently expected to be the October Deadline;
• Any children born or adopted by those who qualify for the scheme after the October Deadline will have their rights protected;
• Spouses and partners of EEA and Swiss nationals who are not in the UK by the October Deadline must join their partner by the 29^th March 2022 to qualify under the scheme;
• EEA and Swiss Nationals and their family members who wish to enter the UK after the October Deadline but before the 31^st December 2020 will be able to enter the UK at the border without a visa for an initial period of 3 months. Those wishing to stay longer must apply for a visa under the European Temporary Leave to Remain ('ETLR') which will grant the individual the ability to live and work in the UK for a further 36 months (after which they must either leave the UK or switch in to another visa under the new skills system, which will come in to force in January 2021 or some other visa). Please note that this policy may be subject to change by the new UK Government.
• Non-EEA or Swiss family members of an EEA or Swiss national, entering the UK after the October deadline must apply for a family permit in advance of travel. They are not eligible to be granted a 3 month visa at the border in the same way as their EEA/Swiss family member;
• All applications under the Settlement Scheme must be made by 31 December 2020; and
• Right to work checks will be updated to reflect the end of transitional arrangements but this is not expected to happen until January 2021. Please note that this policy may be subject to change by the new UK Government.

Key dates (Deal vs No Deal)

Key things to consider

In light of the uncertainties, there are a number of key issues that employers should consider in relation to Brexit and immigration matters.

Information and Support - the Settlement Scheme

• We recommend that employers provide information and support for EU nationals (please note that legal advice on immigration matters must only be provided by a solicitor or regulated immigration adviser). This may encourage them to apply for Pre-settled Status or Settled Status. Having this status in place, will assist both the employer and the EU nationals once Brexit occurs. If the rules on right to work checks are changed sooner than expected, then having this evidence of right to work will assist.
• Employers should be aware of the limits of Pre-Settled Status and should ensure that any international secondments and other absences do not inadvertently 'break' the period of leave.

Skills Shortages

• Employers should identify any future skills shortages in their organisation. It may be helpful to identify areas of the business which relies heavily on EU nationals at present. In the event of a Deal Brexit, access to the EU labour market will continue much in the same way it does for a period of time. However that is expected to come to end on 31 December 2020.
• In a No-Deal scenario, access to the EU labour market will become far more restricted. Assuming that the ETLR scheme remains in place (which depends on the policy of the current UK Government) employers may be able to employ EU nationals for a period of up to 3 years. However, the temporary nature of that leave may result in a drop in the number of EU nationals coming to the UK as the UK may become a less attractive destination.
• Also, depending on the type of role, a fixed term 3 year visa may not provide employers with an ideal solution if they need to invest in training someone for a role and if there is a maximum period of 3 years that they can employ someone for.
• Employers should also ensure that they have contingency plans for European workers who must leave the UK after the period of leave. It would be worth exploring other options in terms of filling skills gaps in the longer term.

Have new recruits enter the UK Before 31^st October where possible

• As mentioned, in a No-Deal scenario, only those EEA or Swiss nationals (and their family members) who are in the UK by Brexit day will qualify under the EU Settlement Scheme (which provides the ability to remain in the UK indefinitely if they requirements are met). Employers should check if their organisation has any key recruits who are of European nationality who are due to start work shortly after Brexit. If so, organisations may wish to consider having that recruit enter the UK before the 31^st October 2019 in order to enhance their rights.

Timing of Recruitment

• In the event of a no-deal Brexit, timing should be factored in for EEA/Swiss recruits who have non-EEA/Swiss family members. Such family members will no longer be able to enter the UK without prior visa approval in the event of a no-deal Brexit. Understandably, new recruits in this position may wish to wait for their family member's visa approval to be granted before making a move to the UK. Therefore timing will need to be factored in to such recruits in a way that was not necessary under the EU free movement rules.

Sponsorship and costs

• Employers should consider whether the new single skills immigration system (which will mainly focus on the recruitment of medium and highly skilled migrants) will be helpful to their organisation and consider whether they should be applying for a sponsor licence now.
• Currently, sponsorship under Tier 2 of the Points-Based system is expensive (the current estimate by the Immigration Law Practitioners Association of the total cost of sponsoring a migrant worker was £8,631 based on a 5 year visa). Minimum salaries of at least £30,000 (but vary depending on the particular role) are also currently required for a role to be eligible for sponsorship in most cases. Organisations should consider whether they will continue to require migrant workers (from the EEA and Switzerland or elsewhere), be aware of the financial impact this can have and should budget accordingly.

For queries, please contact Elaine McIlroy or Lynne Marr. We are delivering workshops for employers and their EU nationals on the implications of Brexit. For details please contact your usual Brodies contact.