BREXIT: Implications of the EU-UK Agreement on European HR and Employment

On the 4th of December 2020, we published a blog on how employment could change in 2021 due to Brexit. At the time of writing, the UK and EU were in the transitioning period and no deal had been agreed upon - however on the 24th of December 2020 a last minute Trade and Cooperation Agreement was reached. In this blog, we will explain what some of the implications of this 1,246-page agreement may be for employment in the future. 

Employment Law in general

Fortunately, the majority of regulations will remain as they were in both the EU and UK. This is partly due to the role of the International Labour Organisation’s various conventions which has helped to keep labor standards comparative. It is, however, possible that the employment legislation between the two groups may diverge overtime, as there are no current major changes to the legislation in place that were not in place prior to Brexit. 

One key point to take into consideration is that the current agreement has a "non-regression" principle which prohibits either the EU or the UK from lowering the standards of  labor and social levels of protection as previously underpinned by EU directives in order to maintain a level playing field. This principle will help to maintain relative stability in labour standards for the near future between the partners. 

Bonus read: Brexit Impact on Recruitment: Strategies for EU Market

Freedom of movement for staff

Perhaps the most significant changes employers and employees will experience is that there is no longer a freedom of movement between the two regions. Previously businesses in the UK and EU were free to carry out their work in either region without much issue, however the current agreement now requires employees to have the appropriate work visas for the specific country, and residence permits if the moves are to be more permanent. This is particularly complicated for UK businesses who may need to send employees to several different EU countries, as they will now need to arrange visas for each individual country. Employers will now need to account for the additional paperwork and time required to arrange the appropriate paperwork before any work can be carried out, and in the cases of emergency work it may be best to outsource to European service providers. 

It should be noted that the Van Der Elst visa rule may allow third-country nationals employed in the EU single market to work temporarily in another EU single market country for the same employer under specific conditions. 

Scramble for talent

As the UK is no longer part of the single market, there are a number of battlegrounds forming between itself and the EU. One such battleground is that of recruitment between the two parties. Simply put, both the EU and the UK are now competing to have the best talent on their side of the channel. As more UK based companies look to open subsidiaries or branches in the EU, it is feasible that senior staff may be transferred to the continental mainland along with these new ventures.

At the same time, the UK, and London in particular, may try to maintain their dominance as one of the pre-eminent financial centers in the world, and this will include headhunting the best talent from their European rivals such as Paris, Amsterdam or Berlin. The UK’s new points-based immigration system and status as a third-country to the EU means that the fluid movement of talent between the two blocs will slow down significantly. While it is again too early to tell how Brexit and it’s legacy will impact the recruitment field in the long term, it is undoubtedly an area that will see many changes in the coming years. 

Conclusion

Labour standards between the EU and UK will continue to diverge overtime however businesses can be thankful that these changes will mostly be slow and steady. Whilst other areas of Brexit are causing headaches for both groups, such as with cross-border logistics and tax implication, employers will at least for the short term only deal with additional administration to carry out their business as usual. In a follow up blog, we will discuss these cross-border & tax implications which the Trade and Cooperation Agreement will have on UK and EU entities. 

More information

In case you would like to have more information on the implications of the Brexit on HR and employment or other European HR related topics, do not hesitate to contact us. You can directly reach Monique Ramondt-Sanders - Executive Vice President of Human Resource Outsourcing at EuroDev - by clicking on the link. Interested in more information concerning our HR Outsourcing services? Please have a look at our HR Outsourcing page. 

About EuroDev

EuroDev, established in 1996 with offices in The Netherlands, has a single, defined purpose to help mid-sized North American companies expand their business in Europe. We have created a proven, successful business development model and since our founding, have partnered with over 300 companies to help them define and meet their European business goals. Services provided include Sales Outsourcing, HR Outsourcing and Digital Marketing.