07/07/2016 Possible scenarios after Brexit and the free movement of workers
Due to the different scenario we find ourselves in following the outcome of the UK referendum held on Thursday June 23rd, you should begin to plan for how Brexit will affect your workforce. Brexit will not mean immediate changes in labour laws and practices, but there are certain issues legal and HR teams must consider and be prepared themselves for.
Spanish citizens or nationals of a EU member state working in the United Kingdom and UK citizens who are working in Spain or other member states will not be affected for the time being. The Brexit process will be long and might last several years.
However, focusing our analysis exclusively on the effects Brexit will have on the free movement of workers and Social Security, we can define three possible future scenarios:
- Once the UK has completed the process of leaving the EU, it remains in the European Economic Area, which includes Norway, Iceland and Liechtenstein. Should this occur, the free movement of workers would remain, and therefore Spanish citizens who work in the UK would not require a work permit to work in that country – as they do today – and, conversely, the same would apply to British citizens. In regard to the protection of Social Security, the Community Regulations 883/04 and 987/09 would continue to apply; they regulate the coordination of Social Security systems, which in practice results in the reciprocal computation of periods and guarantees access to Social Security benefits in other EU countries, as is the case right now.
- That, after leaving the EU, the UK adopts a relationship with the EU that is similar to the Swiss model: one based on bilateral agreements including the acceptance of Community regulations in regard to internal markets. The effects to both the labour context and Social Security would in this case be the same as in the first hypothesis.
- That after leaving the EU the UK negotiates a free trade agreement (like the US or Colombia) or an association agreement (like Ukraine and Chile) which does not include the free movement of workers. If this happens any posting of workers to the UK would involve processing visas and/or specific work permits. In addition, Community Regulations would cease to apply such that a bilateral agreement between Spain and the United Kingdom would have to be negotiated. In this case, ensuring that contributions are maintained overseas would be a priority.
At this point, any more detailed information is purely speculative. However, we will keep you informed as this situation develops.