Pack your bags; we’re going on a trip! - KPMG Belgium
Brexit Suitcase

Pack your bags; we’re going on a trip!

Pack your bags; we’re going on a trip!

Pack your bags; we’re going on a trip!

Jeroen Gobbin | Partner,

With less than 10 days to go before Brexit, the fate of the future relationship between the UK and the EU remains unclear and we can still not fully exclude a no-deal Brexit.

When it comes to immigration, or simply the migration of people, the prospect of EU citizens being treated as third- country nationals, under a no-deal scenario, makes me a little nervous.

So, given my state of unease, business leaders must also be feeling uncomfortable. How do I know? Well, I’m regularly contacted by companies regarding how to handle their impacted employees. Here are just a couple of the typical questions I receive: How easily will my employees be able to cross borders? What about social security costs and legal benefits?

Not only does this concern UK citizens living and working in the EU and EU citizens living and working in the UK, but it also impacts cross-border workers.

Going one step further: I wonder if businesses have thought about the employees whose net salary is impacted by the currency fluctuations caused by Brexit. And let’s not forget the impact on the total cost of employment for employers providing safeguard clauses for their employees. With the ongoing currency variation, employers might end up coughing up more than they budgeted for. And everything gets a lot more complicated in the event of a hard Brexit.

But before I walk you through what life may look like under a no-deal Brexit scenario, I think it’s important to go back to the beginning and remind ourselves how we got here. The European Union was established to unite European countries on both an economic and political level. Ultimately, it was about securing peace, ending the displacement of people and breaking down borders. Europe, and beyond, had been torn apart by two crippling wars and the European people needed stability and hope. With this in mind, it’s only natural that people and migration remain a sensitive topic at the heart of the Brexit discussions.

Whereas we’ve all grown accustomed to the freedom to travel, work, study and live in another Member State, this will change both for EU citizens and UK citizens once the UK leaves the EU. And more so with a no-deal Brexit. So how do we respect the UK’s decision to leave the EU while preserving the rights of the millions of people impacted?

-- When elephants fight, it is the grass that suffers --

African proverb

 

Up until recently, while it has always been uncertain whether the current deal would go through – there’s always been some goodwill on both sides to limit as much as possible the negative impact for the people. However, with the UK having recently voiced their intention to make immigration more difficult under a no-deal situation, the EU might also decide to play hardball.

Let’s get back to the point and consider what Brexit will mean for businesses. Concretely, it means that EU citizens residing in the UK will need to apply for permission to continue to reside in the UK, with a “settled” or “pre-settled” status granted based on how long they’ve been living in the UK. For UK citizens living in one of the EU 27 Member States, national contingency measures have been put in place to protect their rights at the date of withdrawal in the event of a no-deal Brexit. But if the UK doesn’t reciprocate the favor, this could potentially negatively impact the rights of UK citizens living in the EU.

But even with (clear) procedures in place to help protect the rights of both EU and UK citizens, things are far from straight forward. The additional red tape and increased costs, for both EU citizens living and working in the UK and UK citizens living and working in the EU, will surely have an impact on a business’s ability to recruit talent and respond to urgent business needs. Let’s face it, all this could lead to a shortage of skills for both the EU and the UK.

Regardless of what the future relationship between the UK and the EU will look like, one thing is clear – allowing businesses to continue to employ UK and EU nationals seamlessly from both sides of the Channel remains critical. And it goes without saying that this will become all the more challenging in the event of a no-deal Brexit.

My advice to businesses? Firstly, approach this exercise from both angles looking at your existing workforce, including cross-border workers. Secondly, consider the impact of the new immigration reality on your ability to recruit and retain the right talent at the right moment at the right place. And lastly, proactively reach out to your impacted employees because I’m sure they’re getting more and more uneasy the closer we approach a hard Brexit.

In other words, make sure you pack both sunscreen and a raincoat!