Brexit and expats: employment implications resulting from Great Britain’s exit from the European Union
The famous Brexit has caused rivers of ink to flow. We are going to add to this flow with this article on the implications of Great Britain’s exit from the European Union (EU) for the intra-Community movement of workers.
A week has already passed since Euro-skepticism, with 51.9% of the votes, defeated British Europhiles, with 48.1%, who voted in favor of Great Britain remaining in the EU in an unprecedented referendum. However, the referendum is not binding and the United Kingdom has yet to commence its formal withdrawal from the Union in accordance with article 50 of the Treaty of the European Union. In fact, it is still even unknown how this will actually take place and under what conditions.
What we do know today, according to section three of the Treaty, is that EU Treaties will no longer apply to the United Kingdom as of the date the withdrawal agreement comes into force or, in the absence thereof, two years after the notification of the decision to withdraw, “unless the European Council unanimously agrees with the State concerned to extend the term”.
How will this affect the intra-community movement of workers?
The immediate effect will be as drastic as it is simple: the free movement of workers between the United Kingdom and other EU Member States will no longer be applicable. Subsequently, British expats or workers posted to other EU Member States and EU expats in the United Kingdom will have to obtain official permission and a visa to be able to live and work in the EU and the United Kingdom, respectively.
Neither will Community regulations on the coordination of Social Security Systems apply to UK and EU expats, which means that British expats posted to EU countries and EU workers posted to the United Kingdom will no longer benefit from the rules on the maintaining of contributions in the country of origin (contributions will be made in the country in which the work is performed), nor on the aggregation of insurance periods in different countries of the EU for the purposes of qualifying for Social Security benefits in EU Member States (British expat contributions in EU countries will not be taken into account in the United Kingdom to qualify for benefits and the amounts contributed by EU nationals in the United Kingdom will not be recognized in the Social Security systems of their respective countries).
However, we cannot predict the result of the negotiations between the United Kingdom and the EU, and therefore the real effects of Brexit: the terms and conditions of the withdrawal agreement between the EU and the United Kingdom remain to be seen. Intermediate and alternative formulas exist that would enable EU expats to continue receiving the benefits of the free movement of workers, such as: (i) the United Kingdom joining the European Free Trade Agreement (to which Norway, Iceland, Liechtenstein and Switzerland have adhered), thus allowing it to be part of the European Economic Area; or (ii) the signing of bilateral agreements between the United Kingdom and the EU jointly, or with willing Member States individually.
In short, Will Brexit prevail or will Bregret take place (reconsideration by the British)? If Brexit does take place, will there be agreements between the United Kingdom and the EU or with individual Member States to maintain the benefits of free movement of workers? Only time will tell.
Garrigues Labor and Employment Law Department
