Brexit negotiations are finally underway, beginning one year to the week after the UK voted to leave the European Union. David Davis and Michel Barnier were placatory in their press conference on Monday, having agreed terms of reference and a schedule for the talks. Employers hope that the status of their EU staff can be settled quickly. Although no-one thinks that current staff will need to leave, the uncertainty over rights and procedures is worrying for senior leaders and HR.
The Prime Minister wanted to settle the question of EU citizens in the UK before now. In fact, she pressed for an agreement last October, which was blocked by Angela Merkel, whose “no negotiation without notification” repeated the European Commission’s uncompromising line. As is often the case with the Commission, it invented an valuable position and dressed it in the garb of principle. Three million people in Britain, and around a million British nationals living in the EU, and crucially their employers, were left to wait for the Article 50 legislation and notice.
There is already an automatic right to permanent residency after five years. Your EU staff aren’t obliged to get a certificate, but employers can currently rely on passports, so this has never been an issue. The cumbersome and officious approach of the Home Office has alarmed those now trying to apply. While their concern is understandable, administrative practicalities will force the system to be streamlined before Brexit, regardless of the negotiations. Requirements for employers and employees will be reduced to a minimum. What’s really needed is clarity for those who arrived after March 2014, clarity about any cut-off dates and clarity on acquired rights towards benefits and pensions.
It could be done unilaterally. This would leave British nationals in the EU27 without a guarantee of equal treatment, however, and the Government was concerned that any cut-off date could prompt a late influx of arrivals. That’s why Mrs May rejected Vote Leave’s open offer to EU citizens, which her own Foreign Secretary championed during the referendum. Whatever the criticism and uncertainty during the wait for talks, a reciprocal deal has been the goal.
The citizenship question is one of the three early priorities for the negotiations. Already, differences of approach can be seen in the European Commission’s position paper, ‘Essential Principles on Citizens’ Rights’. Whether existing EU staff would regard each principle as ‘essential’ is open to doubt, although the impact for UK employers would be indirect. The British negotiation team is likely to have reservations about:
- Cut-off at withdrawal – any EU citizen who arrives in the UK by March 2019 would be able to stay, and would acquire a permanent right of residence after 5 years. The Government is thought to favour the Article 50 notification date. In practice, employers should find no restrictions on hiring EU staff either way, particularly given the sort of transitional arrangements being mooted.
- Super rights on family members – EU citizens in the UK would continue to have an unlimited right to bring in future spouses or family members, which British nationals do not possess. UK employees must demonstrate that they can support a foreign spouse through their own income.
- Benefits – EU citizens in the UK would remain eligible for benefit payments relating to family members that live abroad. This is particularly relevant to Child Benefit payments, where many claims relate to children living in Eastern European member states.
- ECJ jurisdiction – the Court of Justice of the European Union would monitor and protect the rights in the Withdrawal Agreement, giving the EU Court jurisdiction over the actions of future UK Governments. This would be unprecedented for an international agreement and crosses a Government red line.
More positively, the proposals would protect British nationals living in the EU, providing equivalent rights to those they currently possess, but no appeal to the UK Courts. The Prime Minister’s first demand when she meets her fellow leaders at the European Council this week is likely to be international arbitration for both sides.
If the ECJ is replaced by an independent tribunal, then David Davis was right to claim “much common ground” on the rights of citizens, with the foundations for a reciprocal guarantee. Not that employers could relax at that news alone, because it leaves much necessary detail in the air, and an entire UK immigration system to be determined. The Commission’s paper merely scopes areas like healthcare costs and pension entitlements, each of which could descend into disagreement as negotiations proceed.
The Government appears to be taking the initiative. Mr Davis promised to publish “a detailed paper, outlining our offer on Monday [26 June], which I believe will form the right basis on which to reach agreement”. It should then become possible to give European staff meaningful advice about what to expect. While the desire to reach an early settlement for EU and British citizens is genuine, during 44 years of ‘ever closer union’, the one route that was never seriously entertained by either side, much less discussed, was exit.
One day down, one year on, there is a long way to go.
LHH Penna will produce a full analysis of the potential implications of Brexit for employers and employees from the European Union following the publication of the Government’s paper next week.