Implications of a no-deal Brexit for hotels

On 5 Sep 2019, the Home Office updated their policy paper on their no-deal plan. The policy paper re-affirms their commitment to implement a transition period until 31 December 2020 if we leave the UK without a deal. This is great news for the hotel industry.

For any new EU citizens* planning to enter the UK after 31 Oct 2019 (GMT 11:00pm) under a "no-deal" scenario, they can continue to use the eGates using their passports and work for any employer in the UK without worrying about obtaining a suitable work visa. Should those EU citizens wish to remain in the UK after 31 December 2020, they will need to make an application for a European Temporary Leave to Remain (Euro TLR), which will give them temporary leave for 36 months or make an application for a work visa under the new Immigration Rules to be implemented from January 2021.

Unlike the Temporary Leave to Remain scheme proposed by Theresa May, the Euro TLR has many advantages. First, it is a voluntary scheme. Second, there is no fee payable to the Home Office. Third, and most importantly, it will be possible to combine the time accrued under Euro TLR with the route under the future immigration system which would lead to settlement.

The Euro TLR is the closest scheme that replicates "freedom of movement" for EU citizens. If implemented as proposed, the Euro TLR will also help UK employers significantly. UK employers can effectively continue to recruit skilled employees who are EU citizens without substantial cost/administrative burdens until the new Immigration Rules are implemented in January 2021. New EU citizens will have an incentive to come to the UK after Brexit in a no-deal scenario as it may be possible to use the time spent in the UK under Euro TLR for settlement purposes.

For legal right to work purposes, employers can continue to accept passports and national ID cards from EU citizens to evidence their legal status. From 1 January 2021, however, EU citizens must have a status granted under the Euro TLR, the EU Settlement Scheme or under the future points-based system. We await further guidance from the Home Office as the government has just commissioned a report from the Migration Advisory Committee on the new "Australian-style" points-based system.

Whilst new EU citizens who come to the UK after "exit" day in a no-deal scenario can remain in the UK until 31 December 202o with their passports or national ID cards, employers are advised to be vigilant as such individuals will become overstayers if they have not applied under the Euro TLR or the new "Australian-style" points-based system by 31 December 2020.

We envisage that there will be a class of EU citizens who fail to apply for Euro TLR but remain employed by UK employers after 31 December 2020. Although the current policy paper states that UK employers will not be required to conduct their legal right to work checks retrospectively, this position does not sit squarely with the prevention of illegal working obligations currently imposed on employers under Section 15 of the Immigration, Asylum and Nationality Act 2006.
Employers are advised to take a proactive approach to ensure that all of their employees remain compliant and retain their legal right to work after the UK exits the EU.

*EU citizens include citizens of EFTA countries (Norway, Iceland, Liechtenstein and Switzerland) for purposes of this article.