Practical Law

Until recently, most of us would have dismissed such a question as ridiculous, but until recently the employment and immigration status of EU nationals in the UK has been clear: they have the right to live, work and study in the UK under the principles of free movement, as do their dependants.

Hundreds of thousands of EU migrants have come to the UK over the last decade. They have contributed significantly to the UK economy, particularly in sectors where there are labour shortages in the resident labour market, such as hospitality, agriculture and healthcare. According to a GMB study of figures produced by the Office for National Statistics, in at least 18 specialist industries EU workers constitute more than 20% of the labour force.

However, following the Brexit vote and in the light of concerns about potential discrimination against EU nationals, the Government Equalities Office has been tasked with examining the growing evidence that they are being illegally prevented from getting jobs. The Guardian, for example, recently reported that campaigners had found job adverts that clearly specify that those applying must have British citizenship. This included an advert for a sales role requiring a German speaker but which specifically stated that applicants must have a British passport.

The employers posting those adverts may genuinely have misunderstood the effect of the Brexit vote on the eligibility of EU nationals to work in the UK. Alternatively (and perhaps more likely) they may have been put off hiring EU nationals due to the uncertainty regarding their status in the short and longer term. The government is seeking to allay concerns of a “cliff edge” following Brexit and even the Home Office has tweeted that “EU nationals living here are vital” and that they “need not do anything”.

Either way, the uncertainty emanating from the leave vote means that it is crucial for employers to understand their obligations in respect of EU nationals, in order to avoid inadvertently discriminating against applicants.

Current position: business as usual

The most important thing for employers to note is that, despite the Brexit vote on 23 June 2016, in the short term at least, nothing has changed. EU nationals still have an unrestricted right to work in the UK and will do so until such time as the UK exits the EU. Based on the current timetable, that will not be until March 2019.

All employers are required to carry out an eligibility to work check on all new employees (regardless of nationality) before they commence their employment. An employer who fails to do this may be liable for a civil penalty and may also commit a criminal offence. In the case of EU nationals, evidence of eligibility to work in the UK is usually in the form of a passport confirming that the individual is a citizen of an EU country or a national ID card. In all cases, original eligibility to work documents should be inspected and a signed and dated copy retained on file (whether paper or electronically).

Refusing to employ a job applicant on the basis of their nationality or barring them from applying altogether amounts to direct race discrimination. Furthermore, there is no justification defence in claims of direct discrimination; if less favourable treatment because of nationality is established, the employer cannot escape liability by explaining the less favourable treatment.

Future changes and the post-Brexit landscape

The post-Brexit landscape for EU nationals remains unclear and their exact status is unlikely to be clarified until the final deal is agreed.

The government’s “offer” (and it is just that) to EU citizens in the UK has been publicised as part of the exit negotiations. It includes:

• Offering EU citizens who have been in the UK continuously for more than five years the right to apply for “settled status”. Settled status will be a new creation in UK law, akin to indefinite leave to remain, and will mean that the individual is free to live in the UK in any capacity, undertake lawful activity, access public funds and services and apply for British citizenship (after six years). Those who already have Home Office residence documents will also need to apply for settled status but under a more streamlined process.
• EU nationals who arrived in the UK before a cut-off date (which is to be determined) but who have not been here for five years when the UK leaves the EU, will be able to apply to stay until they have reached the five-year threshold. They can then also apply for settled status.
• People who arrive after the cut-off date will be able to apply for permission to remain after the UK leaves the EU, under the future immigration arrangements which are to be determined.

• Family dependents who are living with or join EU citizens before the UK’s exit will also be able to apply for settled status after five years in the UK. In these cases the cut-off date will not apply.
• Post-Brexit, EU nationals who have lawfully settled in the UK, will have to meet the minimum income threshold to bring a spouse.

The cut-off date will be agreed during the negotiations but it should not be earlier than 29 March 2017 (the date Article 50 was triggered) or later than the date the UK leaves the EU.

The Guardian recently published a leaked Home Office document setting out proposals under consideration for the post-Brexit immigration system. The timing and content is interesting, given that the Migration Advisory Committee (MAC) has been commissioned by the government to report on the economic and social impacts of Brexit and how the UK’s immigration system should be aligned with modern industry. The call for evidence does not close until 27 October 2017, with the government reporting back in September 2018. The extent to which the content of the leaked document represents the current thinking of the Home Office is therefore unclear. However, the language used in the document indicates that the government intends to develop a much more UK-focused immigration policy, with settlement reserved for those that are highly skilled. It states that migrants must be “considered valuable to the country as a whole” and “wherever possible, UK employers should look to meet their labour needs from resident labour”.

What should employers be doing?

Although the message currently is “business as usual”, employers should keep a close eye on developments as negotiations progress and should be contingency planning. Employers will need to understand the extent to which they are reliant on EU labour, as well as how they can minimise disruption and retain their EU staff post-Brexit.

In particular, employers will need to consider taking one or more of the following steps:

• Undertaking an audit of their workforce and recruitment practices to determine reliance on EU labour and what will need to change.
• Entering into communication with affected employees to reassure them of their importance and the organisation’s desire to retain them.
• Provide employees with regular updates as to any changes which may affect them.
• Provide affected employees with support to apply to formalise their residency in the UK, such as help with application fees, access to legal advice and collation of documentary evidence of their residency. However, depending on the level and degree of support offered, employers will also need to consider its non-EEA employees and the risk of challenges from them in terms of race discrimination claims if they are not offered similar support when eligible to apply for residency in the UK.
• Explore other options to fill labour shortages, for example retraining and redeployment programmes or Tier 2 sponsorship of skilled workers (this may mean applying for a licence or increasing the number of sponsored employees).

A policy of rejecting, or refusing to accept, job applications from non-British EU nationals on the basis of their nationality alone is likely to result in discrimination claims against the employer and adverse publicity.