Executive Brief: Brexit and Its Impact on Employee Relocation

Executive Brief: Brexit and Its Impact on Employee Relocation

Three years after the referendum in the United Kingdom to depart the European Union set Brexit in motion, we are still left with uncertainty and a U.K. that is still very much a part of the EU. What’s the latest on Brexit and how might it impact the mobility industry?

After an extension on the process, the U.K. currently has until the end of October 2019 to come to an agreement with the EU to gracefully exit the economic and political partnership between 28 countries. Key politicians within the U.K. are still divided over the withdrawal agreement, which has resulted in several delays. While many in the U.K. government want an agreement to be reached before exiting, others are pushing for a “no-deal” Brexit if an agreement can’t be reached.

Under the current unapproved agreement, there is a transition period, which is important to mobility providers. It governs the period of time between when the U.K. officially exits the union and a future date (currently the end of 2020) that would allow businesses and others (like foreign deployed employees) to make adjustments before post-Brexit rules come into effect. A no-deal Brexit would apply new rules immediately without a transition, possibly disrupting trade and business across the U.K. and Europe.

The Impact on Employee Relocation

A transition period would give organizations with impacted staff time to make adjustments, either by recalling employees on U.K. passports in EU member states (or vice versa) or starting a work permitting process. Depending on the actual agreement, there may be very little adjustment needed. Regardless of the terms, a transition period gives organizations time to adjust their staffing and strategy effectively.

As Worldwide ERC covered [https://www.worldwideerc.org/article/eu-elections-highlight-political-polarization-throughout-europe/] as part of its post on the EU elections, a no-deal Brexit could end U.K. and EU citizen rights to move and work with relative ease. Most companies were planning on using the stated transition period to stabilize and reassess their presence in the U.K. and EU. Having no time to adjust to what would be a massive change would be a challenge that many organizations with overseas talent will have to grapple with.

It’s hard to know exactly how to prepare without knowing how Brexit will be resolved. The worst-case scenario for organizations with affected staff is that a no-deal Brexit comes to fruition at the end of October. Those with impacted staff would likely need to be prepared to move quickly, either with a temporary recall or by being prepared to move quickly in areas such as work permit. Other scenarios, such as another postponement, a deal with a transition period, or even a reversal of Brexit, would require less drastic and time-sensitive action on the part of organizations.

More information on the outcome is likely later in the summer as the U.K. with the new prime minister in place.