19th January 2021
The UK and EU secured a last minute post-Brexit trade deal and The European Union (Future Relationship) Act 2020 which brings the trade agreement, known formally as the Trade and Cooperation Agreement (TCA), into UK law, received Royal Assent on 30 December 2020. With so many changes and different fact patterns, the situation is inevitably complicated. Shabana Muneer, Senior Associate in the Employment Team, summarises the main issues and poses some questions that businesses in the food and drink sector must address.
The overarching effect of the TCA is that the UK and EU can continue to trade without extra taxes and quotas being introduced. However, that’s not to say that it will be business as usual; rather there will be some fundamental differences in the way things operate between the two parties from now on, not least in relation to the recruitment and movement of staff.
Regardless of whether a trade agreement had been reached, the enacting into law of the Immigration Act in November 2020, which ended free movement of people from 1 January 2021 meant that a complete shake-up of the way businesses can recruit new staff from the European Economic Area and Switzerland (EEA), and move existing staff between the UK and the EEA, was inevitable. Food and drink businesses in both the UK and EEA will now need to rapidly adjust to these changes if they are to remain compliant with their domestic immigration requirements, while meeting recruitment needs, preserving their chances of securing the best talent and moving their staff between jurisdictions to meet operational demands. Existing rights of Irish nationals to live and work in the UK remain unaffected by Brexit.
Many UK businesses in the food and drink sector have become heavily reliant on recruiting from the EEA. The principle of freedom of movement, which gave EEA nationals the unrestricted right to live and work in the UK (and vice-versa), meant businesses in the food and drink industry have become accustomed to being able to carry this recruitment out without any additional bureaucracy or costs that are ordinarily associated with the recruitment of UK nationals. Around a quarter (25%) of all warehouse staff in the UK are EU nationals and, of the total number of people employed across the food sector, around one in ten (12%) are EU nationals[i]. Further, over a quarter of the workforce in the UK food and drink manufacturing sector consists of EU nationals according to some reports[ii].
Freedom of movement has now ended, meaning all EEA nationals who were not already present in the UK as at 11pm on 31 December 2020 will need to be sponsored by a UK employer that holds a Home Office issued sponsor licence, or demonstrate an alternative legal basis on which they have the right to work, before being permitted to take up employment. Those EEA nationals who were already in the UK on 31 December 2020 have until 30 June 2021 to make an application under the EU Settlement Scheme to preserve their rights to remain living and working in the UK and remain exempt from immigration requirements. Employers in the food and drink sector with a high proportion of EEA workers will have a vested interest in ensuring they are aware of the need to make an application, to maximise the chances that they will retain longer-term rights to work.
The net effect of the Brexit related changes is that the pool from which UK businesses can now recruit without having to follow immigration processes has significantly reduced. Whereas previously only non-EEA nationals required sponsorship, that has now been extended to any non-UK nationals (except for Irish citizens) who do not have an alternative legal basis to live and work in the UK.
Crucially, only certain roles that meet prescribed skills and minimum salary thresholds (generally at least £25,600 per annum, though this can be reduced in some circumstances and is more in others) are capable of being sponsored. The positive news for the food and drink industry is that the requisite skills and salary levels for sponsorship have been reduced from 1 January 2021, meaning that managerial roles such as warehouse, logistics and retail managers can now potentially qualify for sponsorship, as can restaurant managers, transport and distribution assistants, chefs, butchers and bakers. However, this probably doesn’t provide much comfort to employers who were previously accustomed to filling a wide range of roles classed as ‘lower skilled’ with candidates from the EEA, such as cooks, kitchen or catering assistants, waiters, bar staff and production line operatives. Such roles are still deemed too ‘low skilled’ to be eligible for sponsorship; the Government has been adamant that there will be no route for low skilled roles under the new points based system. Further, EEA nationals will now need to demonstrate sufficient English language skills before being sponsored, which may act as a barrier to sponsorship in some instances.
Any UK food and drink business which has previously recruited from the EEA or beyond or may need to do so in the future to meet its recruitment needs therefore needs to consider making an application for a sponsor licence as soon as possible in order to ensure future international recruitment runs smoothly. Delays in this regard could cause serious operational issues or cause candidates to accept employment from another employer who is in a position to complete the hiring process swiftly because they already have the sponsor licence in place. Businesses will also need to factor in the substantial costs of recruiting from the EEA, which are now on a par with non-EEA recruitment.
As well as thinking about recruitment, businesses are going to have to factor in additional immigration requirements when staff move between the UK and EEA, and the ease with which they have done so previously may well be a thing of the past. The TCA stipulates that both the UK and EU shall provide for visa-free travel for short-term visits in respect of their nationals in accordance with their domestic laws (existing free movement arrangements between the UK and the Republic of Ireland will continue).
The UK’s visitor rules allow for visits for certain specified business activities for up to six months. These include attending meetings, conferences, seminars and interviews, negotiating and signing deals and contracts, carrying out site visits and inspections and being briefed on the requirements of a UK based customer, provided any work for the customer is done outside the UK. There are specific provisions for intra-corporate activities which allow an employee of an overseas company to advise and consult, troubleshoot, provide training, and share skills and knowledge on a specific internal project with UK employees of the same corporate group. Crucially however, no direct work with clients is permitted. In addition, an employee of a foreign manufacturer may install or service equipment purchased from the manufacturer by a UK company, provided that a contract of purchase or lease is in place between the parties.
Therefore whereas EEA nationals could previously enter the UK for any business or work purpose without question, they may now be required to satisfy border officials that their visit is for a permitted reason under the visitor route. While it remains to be seen how the Home Office will manage this in practice given that most EEA nationals will continue to use eGates to gain entry to the UK, under the visitor rules individuals can be required to show border officials that they are entering to undertake permitted activities, therefore they would be well advised to carry documentation to support their smooth entry at the border. Any activities which fall outside the permitted list or require a stay in excess of six months are likely to require sponsorship.
UK nationals are permitted to spend a maximum of 90 out of 180 days in the Schengen area of Europe without a visa requirement, including for permitted business purposes such as attending business meetings. From late 2022, UK nationals will require a visa waiver in the form of an online European Travel Information and Authorisation System application prior to travel to the Schengen area.
Finally, from 1 July 2021 EEA nationals whose place of residence is in the EEA but who come to the UK regularly for work (e.g. a French national who makes a weekly trip into a London office) will require a frontier worker permit to continue such arrangements, provided they were in place by 31 December 2021.
Of course, employers requiring staff to travel for business purposes must also keep on top of the constantly evolving requirements and travel restrictions imposed across the globe due to the pandemic. Travel restrictions imposed in England (the rules vary across the UK) as a result of the third national lockdown, which started on 5 January 2021, mean that international travel is only permitted where the individual has a legally permitted reason to leave their home. Whilst work is a legally permitted reason, it should be undertaken from home unless it is “unreasonable” to do so. Employers should think very carefully therefore before requiring staff to travel for work to ensure they are not encouraging a breach of the lockdown rules. Where work cannot be done remotely (or business trips delayed until after the lockdown), employers should also bear in mind the different requirements countries have introduced regarding incoming travel; including restrictions on acceptable reasons for travel, quarantine periods and requirements for negative Covid-19 tests, and ensure their staff are fully aware of the up-to-date requirements of their destinations.
The main message to remember is that previous visa-free, restriction-free travel between the UK and EEA is now be subject to immigration rules and regulations and will require careful planning and thought. All UK businesses in the food and drink sector should urgently be asking themselves:
The Walker Morris Business Immigration team can assist with any queries on these issues, please contact Shabana Muneer using the details below.