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Post-Brexit Challenges: Posting of EU Employees to the UK in the Framework of Provision of Services

Posting of EU Employees to the UK in the Framework of Provision of Services

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The dynamic and challenging 2020 somehow distracted the attention of the EU citizens and businesses to the fact that on 31 January last year the United Kingdom made its important step out of the European Union. The transitional period, that was agreed to cover the whole 2020, ensured no changes to the way the day-to-day business was done during the past year. That came to its end on 1 January 2021, when the UK effectively left the European Union and the free movement of workers between the EU member states and the United Kingdom was officially over.

The Brexit Deal of the last days of 2020 has in practice declared the UK a third country to the EU member states with respect to the matters of employment mobility. Hence, the freedom of movement of workers rule, as we know it, no longer applies when Bulgarian (or other EU) employees need to spend time working on a secondment in the UK. The special legal provisions of the Posted Workers Directive are no longer binding on the UK and respectively neither Bulgarian, nor other EU employers may rely on these when organizing business-related travels for their personnel to the UK.

Until 1 January 2021, Bulgarian and all other EU employees could easily travel for business purposes to the United Kingdom when the needs of their local employers required so. The Bulgarian law in particular differentiated between two main categories of such business travels: On the one hand, there were the business trips where usually for a short period of time employees visited the UK for business meetings, conference attendance, client-facing meetings, trainings, teambuildings, etc.; On the other hand, it was acceptable to have a Bulgarian employee posted to the UK to do some actual work for a client there or at the local employer belonging to the same group of companies, where the Posted Porkers’ Regulation applied (including with respect to the minimum remuneration and working conditions). The Union’s uniform rules on employment mobility had secured that the EU employees could travel freely to the UK, stay there and come back home to their home member state where the bureaucratic immigration rules governing visas, work permits, calculation of maximum stay, etc. did not apply.

Well, they do apply now!

The effective Brexit has put an end on the free non-regulated movement of personnel between the EU and UK companies. The UK government has made it clear that it will not tolerate any foreign employees – regardless if they are sent on a business trip or posted in the framework of provision of services – working in the UK without complying with the relevant immigration formalities.

Therefore, while UK employers can still avail of the EU posting regime when sending employees to the Union, an EU employer can no longer rely on the Posted Workers Directive to temporarily send an employee to the UK for the purposes of fulfilling a certain task or delivering a service. In practice, this means that effective 1 January 2021, employees that are citizen of the EU can only be sent on regular business trips to the UK and, if some actual work will be done for the benefit of the receiving party there – a visa will be required.

From a migration standpoint, a visa requirement is never good news. As it will be from now on, EU employers will first have to secure visas for their employees if they will need to be sent to the UK to temporarily do some work there. It seems that the UK will apply the rule regardless of the duration of the employee’s stay there, so it will be the case that even a week-long business trip of a Bulgarian developer to assist, for example, for the launching of a new software product in the UK, will require a visa. This stems from the prohibitions imposed on business visitors in the UK to do paid or unpaid work for a UK company. On the less bureaucratic side, business trips of the EU employees for a conference or a meeting will not require a visa.

From an employment law perspective, the new rules will relieve the EU employers from the burden to find out and apply the special rules and standards of the receiving country on the posting of employees in the framework of provision of services. Although those rules are in their essence extensively directed to protect the employee’s interests, they impose significant administrative burden on the employers. The execution of special annexes to the employment contracts are just the first step, then follows the mixed application of both employment law provisions of the sending and the receiving state. Finally, the posting of workers regime requires that the posted employees are paid at the host country salaries’ standard while there – and it seems needless to say that in the cases of employees posted to the UK, the minimum salary levels there were often a challenge for the foreign employers to meet.  

This financial struggle will now come to an end to create what seems to be the bigger problem – how would the business continue to operate if the mother company or a key subsidiary of the EU domiciled entity is situated in the UK: so close and yet so far away with Brexit now being here. Initially, it will most certainly come like a shock – the limited access to the UK’s employment market, the potentially impeded visa-free access to the UK, the reduced options for free movement of personal data between the companies of the same corporate group, etc.

But then the truth is that there are still valid options to keep the international business up and running even post Brexit, and the online video management is not the only one of these. When hands-on approach will be needed in the UK and an EU employer needs to send some of its employees to the UK to secure it, some useful legal mechanisms, already known in the EU may come in place, such as the intra-company transfers. After all, if not anything else, 2020 – the year of the Brexit Deal and the COVID-19 pandemic – has given us a lesson that a solution may always be found when there is a proper challenge.

By Ilya Komarevski, Partner, and Mileslava Bogdanova, Senior Associate, Tsvetkova Bebov Komarevski

Bulgaria Knowledge Partner

Schoenherr is a leading full-service law firm providing local and international companies stellar advice that is straight to the point. With 15 offices and 4 country desks Schoenherr has a firm footprint in Central and Eastern Europe. Our lawyers are recognised leaders in their specialised areas and have a track record of getting deals done with a can-do, solution-oriented approach. Quality, flexibility, innovation and practical problem-solving in complex commercial mandates are at the core of our philosophy.

Firm's website: www.schoenherr.eu

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