On 14 November 2018, after many months of negotiations, the UK Government and the EU Commission finally announced that a draft withdrawal agreement (WA) on the legal terms of the UK’s withdrawal from the EU has been agreed, and at the same time they issued a ‘Political declaration setting out the framework for the future relationship between the UK and the EU’ .

The WA is a lengthy document (running to nearly 600 pages) but, for employers, the key provisions of interest are likely to include the future rights of EU citizens to live and work in the UK (and, similarly, UK citizens to live and work in the EU).  The WA also contains information on the future status of employment rights.

The terms on citizens’ rights reflect the already well-publicised proposals, briefly summarised below (for a more detailed analysis, see the EU Press Release).  However, a word of warning – the WA still needs to be approved by the UK Parliament and, given the ongoing domestic political uncertainty, with developments on this front on a daily basis, there are still significant hurdles to overcome before the WA gets past the finishing line.

Summary

• There will be a transition period up to and including 31 December 2020 (unless by July 2020 there is agreement to extend it);
• EU citizens who are lawfully residing in the UK, and UK nationals who are lawfully residing in one of the EU27 Member States, at the end of the transition period will be protected and will have the right to reside, work and study in their host country on an ongoing basis.   After 5 years’ lawful residence, the citizen will be eligible for permanent residence;
• EU citizens in the UK will be required to apply for temporary or settled status under the UK’s Settled Status Scheme.  For UK citizens in the EU, the right to remain in the relevant country will be under current EU rules, unless an individual EU Member State chooses to introduce an alternative application system, like the UK’s Settled Status Scheme;
• The WA also protects those family members who are currently granted rights under EU law (spouses and registered partners, parents, grandparents, children, grandchildren and a person in an existing durable relationship), who do not yet live in the same host state as the Union citizen or the UK national, allowing them to join them in the future;
• There will be a right of return to the host country for up to five years for those with the right to permanent residence in that country;
• There will be a deadline of 30 June 2021 for eligible citizens to apply for any new residence status (so in the UK, to make an application under the Settled Status Scheme).

The ‘Outline of the political declaration setting out the framework for the future relationship between the UK and the EU’ also highlights the UK and EU’s agreement for there to be arrangements on temporary entry and stay of individuals for business purposes in defined areas, and visa-free travel for short-term visits.

In terms of employment rights, in the context of a situation where the backstop provisions for Northern Ireland take effect (i.e. no subsequent agreement on this issue is reached by 31 December 2020, and the UK and the EU therefore apply a “single customs territory” ), the WA sets out a number of provisions in relation to the “non-regression” of labour standards,. To this end, the EU and UK agree:

• To ensure that the level of protection is not reduced below that provided by the common standards applicable within the EU and the UK at the end of the transition period;
• To protect and promote social dialogue on labour matters among workers, employers, their organisations, and government;
• To commit to implementation of ILO Conventions and the Council of Europe’s European Social Charter; and
• While the European Commission and Court of Justice ensure the application of laws in the EU, the UK will ensure effective enforcement of its labour laws to reflect common standards and will also maintain an effective system of judicial inspections, ensure mechanisms for action against violations of law and provide for effective and deterrent remedies.

Next steps

The next planned stage is for the WA to go to the EU summit on 25 November 2018 for approval. If the WA is approved by the EU, it will then need to be approved by the UK Parliament (with voting expected to be on 10 December 2018).   This is a critical step and the current uncertainty of whether this can be achieved, or not, cannot be overstated.

If rejected, the Government will have 21 days to put forward a new agreement. Ultimately, if no further agreement is reached, it seems likely that the UK will leave the EU with no deal in place.

However, if the WA is approved by Parliament and is passed, it will become the EU Withdrawal Bill. The Bill will then require the majority of the European Parliament’s approval and finally, the EU Council’s approval.

The UK would then leave the EU on 29 March 2019, with the transitional period taking effect until December 2020.

For any queries about the impact of the draft Withdrawal Agreement on your business, please speak to your usual contact in our Employment team, or Paul Hardy, our Brexit Director.