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On 31 December 2020 the United Kingdom of Great Britainand Northern Ireland left the EU Single Market and Customs Union,as well as all EU policies and international agreements, ending thefree movement of persons, goods, services and capital between theUK and the EU.
The future relationship between the UK and the EU will begoverned by the EU-UK Withdrawal Agreement and the EU-UK Trade andCooperation Agreement. A summary of the effect of those agreements,and their impact on Irish employers, is set out in thisbriefing.
EU-UK Withdrawal AgreementThe Withdrawal Agreement was agreed on 17 October 2019 andentered into force on 1 February 2020. It includes the Protocol onIreland and Northern Ireland, the substantive provisions of whichapply from 1 January 2021. Amongst other matters it protects therights of EU citizens and UK nationals and safeguards the socialand political stability on the island of Ireland after thewithdrawal process.
EU-UK Trade and Co-operation AgreementThe Trade Agreement was provisionally agreed on 24December 2020. It provides for tariff-free, quota-free trade andfor sectoral cooperation in a number of important areas such asclimate change, social and labour rights and a binding disputesettlement mechanism. The Agreement provisionally applies from 1January 2021, pending approval and ratification in the EuropeanParliament.
Worker mobility has been an area of focus for Irish employers,particularly those with premises located in the UK and Ireland orwho engage frontier workers (workers living in one jurisdiction butworking in another).
Ireland is the only country in the EU to share both a landborder and a joint history of immigration governance with the UK.Given this shared history, a bespoke set of immigrationarrangements applies between the two nations. A summary of theimplications of Brexit for people who were living and working inIreland/the UK before 31 December 2020 is set out below:
Common Travel Area (CTA)Irish and UK citizens can, without having to take furtheraction, continue to freely work, travel and reside in eitherjurisdiction by operation of the CTA. The CTA predates theestablishment of the EU, and the Withdrawal Agreement expresslyrecognises that Ireland and the UK may continue to makearrangements between themselves relating to the movement of personsbetween their territories.
On 8 May 2019, Ireland and the UK entered into a memorandum ofunderstanding that set out the rights pertaining to Irish and UKcitizens in relation to the CTA, including reciprocal rights forIrish and UK citizens to reside and work, among other relatedrights. The Immigration and Social Security Co-Ordination (EUWithdrawal) Act 2020 expressly provides that Irish citizens do notrequire leave to enter or remain in the UK, subject to certainconditions. Further legislative developments may be necessary inthe near to mid-term.
UK Settlement SchemeThe UK's Settlement Scheme remains open for newregistrants provided they have been living in the UK before 31December 2020. While EU citizens can continue to work in Irelandwithout the need for an employment permit, if they reside in the UKand they are eligible to make an application under the UKSettlement Scheme, they should apply for permission to remain viathe UK Settlement Scheme before 30 June 2021.
Applicants may be granted "Settled Status" or"Pre-Settled Status", depending on the amount of timethey have been resident in the UK. Both statuses provideindividuals with rights to live and work in the UK, subject in somecases to conditions. The UK has implemented a points-basedimmigration system that prioritises skills and talent for personswishing to work in the UK who were not resident in the UK by 31December 2020.
Frontier Worker PermitThe UK has provided welcome clarity for non-Irish citizensof certain states who work in the UK while living elsewhere. A newwork permit has been introduced, which permits such individuals tocontinue to work in the UK. Any eligible person wishing to work inthe UK while residing in an EU/EEA Member State (or in Switzerland)will be required to apply for a Frontier Worker Permit from 1 July2021. A passport or national identity card can be used until 30June 2021 - however, eligible persons should ensure that theirapplication is submitted in sufficient time to allow for theprocessing of applications. Eligible persons must satisfy thefollowing criteria: (i) they must be citizens of an EU MemberState, Switzerland, Norway, Iceland or Liechtenstein, (ii) theymust be resident outside of the UK, (iii) they must have worked inthe UK before 31 December 2020 and (iv) they must have worked inthe UK at least once every 12 months since starting work in the UK.Persons who have not worked in the UK by 31 December 2020 will needto apply for a visa.
Short Term Business Trips and TemporarySecondmentsThe Trade Agreement provides that the EU and the UK shallallow (i) the entry and temporary stay of intra-corporatetransferees, (ii) the entry and temporary stay of business visitorsfor establishment purposes without requiring a work permit and(iii) the employment of intra-corporate transferees, without theimposition of quotas. The Trade Agreement also facilitates shortterm business trips by requiring EU countries and the UK to allowentry of short term business visitors (visitors of up to 90 days ineach six month period) without the requirement of a work permit orsimilar testssubject to certain conditions. Helpfully, visa freetravel for short-term non-working visits is also set tocontinue.
The Trade Agreement contains social security coordinationmeasures aimed at protecting the entitlements of EU citizenstemporarily staying in, working in or moving to the UK and of UKnationals temporarily staying in, working in or moving to the EUafter 1 January 2021. A range of benefits are covered includingpension entitlements, healthcare, pre-retirement benefits andmaternity/paternity benefits. Generally speaking, subject toexceptions, a principle of "equal treatment" is providedto those covered by the Social Security Protocol. What this meansin practice remains to be seen, as a myriad of derogations apply.The rules are without prejudice to existing CTA arrangements.
European Works Councils (EWCs) are established in multinationalcompanies to enable the provision of information to andconsultation of employees on the progress of the business and anysignificant decision at European level that may affect employmentor working conditions.
The European Commission clarified that for the purpose of EWClegislation, the UK is a "third country". Consequentlythe UK can no longer be the location of an organisation'srepresentative agent in the EU and UK workers will no longer beincluded in employee threshold calculations for the purpose of EWClegislation. As a result, many companies with EWC arrangements inplace moved the location of their EWC. Those who have not done somay find that an Irish representative agent has been appointed byoperation of law. I n such circumstances, employers shouldfamiliarise themselves with the Irish law governing sucharrangements. The fact that many institutions have made a consciousdecision to relocate their EWC to Ireland may also increasedomestic queries regarding the operation of EWCs.
Most contracts of employment and other employment arrangements(such as secondment arrangements) contain governing law andjurisdiction clauses. Brexit has shone a spotlight on theimportance of such clauses, particularly in the context of frontierworker arrangements (i.e. where a person lives in one jurisdictionbut works in another).
The position on governing law is not significantly affected byBrexit, as the applicable regulations are of universal application- the rules are generally the same regardless of whether thegoverning law chosen is an EU Member State or a "thirdcountry".
However, this is not the case for the rules on which courts havejurisdiction over a dispute - the pre-31 December 2020 regime hasceased to apply to the UK. There are other options available toparties, but as these are largely dependent on the applicablecircumstances and may be subject to further agreement between theEU and UK, enforcement of court judgments in cross-border disputesmay become less straightforward. Legal advice should be taken onthe drafting of jurisdiction clauses and the enforcement ofjudgments involving UK workers and businesses.
The Trade Agreement provides for interim arrangements relatingto the transmission of personal data to the UK. For the duration ofa "specified period", commencing on 1 January 2021,transmission of personal data from the EU to the UK shall not beconsidered as a transfer to a third country under EU law, subjectto certain conditions (i.e. that the UK doesn't change its dataprotection legislation). The specified period will end on theearlier of an adequacy decision being made in relation to the UK bythe European Commission or the expiry of 4 months after thecommencement of the specified period (which can be extended to 6months). Our Technology and Innovation Group's briefingprovides useful guidance: EU-UK Trade and Cooperation Agreement defersapplication of UK's status as a 'third country' underGDPR - Arthur Cox
Employers should ensure that employees who are required to driveas part of their duties are aware that UK driving licences are nolonger recognised in Ireland where the holder lives in Ireland.Licences should be exchanged as soon as possible by following theguidelines set out by the National Driver Licence Service.
The EU Charter of Fundamental Rights, which could previously beused to disapply UK legislation, is no longer part of UK law. Underthe European Union (Withdrawal) Act 2018, EU-derived domesticlegislation (e.g. Working Time legislation, Equality legislation)will generally continue to have effect in the UK, as will theprinciples in any EU case law decided before 31 December 2020(subject to limited exceptions in the European Union (Withdrawal)(Amendment) Act 2020).
The Trade Agreement provides that the UK and EU must not weakenor reduce the level of labour and social levels of protection inplace as at 31 December 2020, in a manner affecting trade orinvestment, including by failure to effectively enforce its law andstandards. Parties are required to have in place and maintainsystems for domestic enforcement of employment rights, including aneffective system of labour inspections and the provision ofeffective remedies, but some commentators have raised concernsregarding the extent to which workers' rights are trulyprotected. It is not clear how in practice an "effect on tradeor investment" will be measured and the definition of"labour and social levels of protection" would appear toleave the door open for regression in certain areas, provided thatthe overall levels of protection are not affected. An enforcementmechanism is in place, whereby a party shall have recourse to apanel of experts who can investigate and report on allegedfailures, and "rebalancing measures" may, within certainconstraints and subject to an arbitration process, be applied inthe event of material impacts on trade and investment. It remainsto be seen how effective this mechanism will be in resolvingdisputes, but for now, wholesale rolling back of employee rightsappears to have been taken off the table by the UK Government dueto negative media reaction.
Separate provisions also apply to working conditionstransporting goods between the UK and the EU. Article 2 of theNorthern Ireland Protocol imposes an additional obligation on theUK to ensure that no diminution of rights, safeguards or equalityof opportunity occurs in Northern Ireland, in particular in thearea of protection against discrimination. Cross border transfersis a common issue that arises, particularly between the UK andIreland. The position remains that separate advice should be taken,as there have always been differences between the application ofthe Acquired Rights Directive/TUPE, particularly in the context ofservice provision. Given that the jurisprudence of the EuropeanCourts drives many developments in this area, the extent to whichthis will be of persuasive authority after Brexit is a key point ofinterest.
The main impact of Brexit will be on employers in the UK, butthere are some developments that Irish employers should be awareof, particularly if they employ persons on a cross-border basis,have operations in both the UK and Ireland or have shared servicesfunctions in the UK and Ireland (such as a shared HR function).
Employers should ensure that:
The authors wish to thank Leah O'Mahony for hercontribution to this article.
This article contains a general summary of developments andis not a complete or definitive statement of the law. Specificlegal advice should be obtained where appropriate.
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