Latest News  

Brexit – the potential impact on global mobility of workers - OT print issue

On 23 June 2016, the UK voted to leave the European Union (EU). Prior to the referendum, there were questions over what a possible "Brexit" might mean for employers, and in particular, employers of globally mobile employees. Now that the result of the referendum is known, there is a renewed focus on what this will mean

2016-09-12 22:41:11 - by Mădălina Racoviţan - Partner, Head of People Services, KPMG

Why this matters


Leaders of Romanian organizations need to urgently analyze the potential impact of Brexit on their businesses, especially if engaged in business with UK partners or partners with UK parent companies or subsidiaries. Even though it is still too early to fully understand the impact of Brexit, and the negotiations on the UK's exit from the EU have not even begun, some issues from an organizational perspective should be considered. Employers of globally mobile employees will want to bear these considerations in mind when negotiating and reviewing not only their assignment packages but also their policies and processes.

Global mobility matters to be considered


Social security


Brexit will definitely have an impact on this area. Consequently, companies will need to consider the impact of EU social security rules for their internationally mobile employees moving to/from the UK. In the immediate short term, the existing EU social security regime and rules will continue to apply until any transitional arrangements are announced. As negotiations with the EU are expected to take place in the coming months, we will then see whether the UK will become part of the European Economic Area (EEA) along with Norway, Iceland, and Liechtenstein, or if it will negotiate its own arrangements like Switzerland. Although it is likely that no significant change would occur for assignment from the UK to Romania and from Romania to the UK if the UK does join the EEA or similar, as the EEA has already adopted many of the EU social security rules, it is important to see what impact this might have if the UK does not join the EEA (e.g. if new social security agreements with Romania or addendums to the existing ones are concluded, as appropriate). Furthermore, EU social security forms (A1, S1 etc.) may no longer be applicable in relation to the UK. The European Health-card (EHIC), which allows individuals to receive health-care treatment within the EU may no longer be available to UK citizens nor valid for Romanian nationals in the UK. Employers may therefore wish to establish that their employees have adequate medical care coverage/insurance in place while overseas. Similarly, there could be an impact on state pension benefits for Romanian employees working in the UK and similarly for UK employees in Romania. Any grandfathering of contributions made pre-/post Brexit would need to be examined on a case-by-case basis.

Immigration implications


Brexit may put an end to the right to freedom of movement to and from the UK, and consequently have an impact on work-related conditions and immigration rules for employees assigned to the UK or coming from the UK (i.e. work permit restrictions). Business travellers to/from the UK might also be affected and certain visa restrictions and conditions may be introduced. However, we do not expect immediate changes to the immigration rules, and for the moment EU/Romanian citizens already in the UK as well as UK citizens in Romania will continue to have free movement rights (until the UK formally leaves the EU). However, it is likely that there will be transitional arrangements for EU/Romanian citizens currently in the UK and UK citizens in Romania or those living in other EU countries, which might involve confirmation of permission to reside and/or work after the UK has formally left the EU. KPMG LLP (UK) has developed a flow-chart on how different groups of people may be affected assuming the current rules remain in place while the UK exits the EU.

Minimum wage for posted workers


Brexit might have an impact on the minimum wage rules and other regulations according to the posting of workers Directive (Directive 96/71/CE transposed into Romanian legislation by Law 344/2006, as well as according to the new Directive 2014/67/UE, which is in the process of being implemented in Romania) and which currently gives a degree of protection to workers posted from the UK to Romania and from Romania to the UK in relation to certain issues, including working time rules, minimum wage rate, etc). Consequently, depending on the UK position (i.e. if it joins the EEA or similar, or negotiates its own arrangements), employers who post workers to/from the UK will have to consider the domestic UK legislation in relation to the mandatory minimum requirements.

KPMG comments


Brexit will have an impact on the Romanian business environment, including mobility of workers. Romanian companies regularly deploying staff to the UK on both short or long term assignments should urgently develop alternative plans to either be able to comply with potential new immigration requirements or should consider relocation of part of their international workforce to other countries. Consequently, depending on how the UK negotiates its exit from the EU, changes could be made in relation to the four freedoms guaranteed to EU member states, direct and indirect taxes, global mobility of employees etc.


0 COMMENTS ^ Go back to Top
WRITE A COMMENT ^ Go back to Top
 
Your email address will not be published.
Nickname
Email
Comment
Validation Code
   
 
 
NEWS
Colliers International, designated to obtain WELL certification for Skanska's Campus 6 buildings

Pioneering in the field, Skanska is the first developer to introduce in Romania the WELL Building standard for the newest company's project developed in Bucharest, Campus 6 and its 2 and 3 office buildings, bei

 Read Full article »
Atos signs cybersecurity industry partnership with NATO

Atos, global leader in digital transformation and the NATO (North Atlantic Treaty Organization) Communications and Information Agency today sign an industry agreement to commit to a rigorous and continuous exch

 Read Full article »
Co-working segment: CBRE advises Spaces in the opening of its biggest center in Romania

CBRE, the world and local market leader in real estate consultancy, advised on the leasing transaction of 4,100 sqm office space for the largest center to be opened by Spaces in Romania.

 Read Full article »
Francesca Postolache, Partner PwC joins People in Shared Services & Outsourcing Forum on October 18, at Bucharest

Francesca Postolache, Partner PwC, joins us next Thursday to take forward major subjects such as Digital Transformation and Next-Generation Talent Development.

 Read Full article »
Telekom Romania opens in Brăila its sixth BPO center

Telekom Romania announces the opening in Braila of BPO (Business Process Outsourcing) centre dedicated to companies that need such services and which prefer to rely on a professional and experienced provider

 Read Full article »
Delphi Technologies inaugurates global IT center in Bucharest

Delphi Technologies, a leading provider of advanced propulsion solutions to automotive manufacturers has opened its first multidisciplinary global IT center in Bucharest. This new site will provide information

 Read Full article »
London Stock Exchange Group appoints Andreea Stanescu as General Manager for Romania

London Stock Exchange Group (LSEG) announced that Andreea Stanescu has been appointed General Manager, Romania. Andreea will be reporting to Dee Liyanwela, Head of Business Services Ltd (BSL) Sri Lanka and Roma

 Read Full article »
Google to offer free courses for young programmers and business incubators

Google announced the launch of the "Digital Workshop for Programmers", aimed at offering free courses to students who want to learn to program and young people who want to become technology entrepreneurs. These

 Read Full article »
ANIS scholarships gathered 35 innovative projects since launch

Employers' Association of the Software and Services Industry (ANIS) announced it registered 35 innovative projects within the first edition of its program called "ANIS' Scholarships".

 Read Full article »
Matthieu Pasquier is the new CEO of Societe Generale European Business Services

The Board of Societe Generale named Matthieu Pasquier as the new CEO of Societe Generale European Business Services, effective July 16, the company announced.

 Read Full article »
 
 
MOST READ ARTICLES
» Andrei Romanescu, Managing Director of...
» ROMANIAN OUTSOURCING AWARDS FOR EXCELL...
» Delphi Technologies inaugurates global...
» Genpact's COO: Staying ahead of the cu...
» Francesca Postolache, Partner PwC join...
» French energy operator Total opened su...
» Colin Lovering to moderate the talks o...
» Exclusive OT print issue: Ericsson - ...
» Grégoire Vigroux appointed the new Vi...
» Ready for People in Shared Services & ...
 
EDITOR CHOICE
People in Shared Services and Outsourcing Forum, 2018: What kind of future, tomorrow will bring?

We have just concluded the fourth edition of our annual event People in Shared Services and Outsourcing Forum, the get-together of the Who's Who in the industry of business shared services in Romania.

 Read Full article »
Olga Botusan, Stefanini, keynote speaker at People in Shared Services & Outsourcing Forum on October 18, at Bucharest

This Thursday, at People in Shared Services & Outsourcing Forum 2018, Olga Botusan EMEA HR Director at Stefanini joins us to talk about Digital Transformation and Next-Generation Talent Development.

 Read Full article »
Colin Lovering to moderate the talks of People in Shared Services & Outsourcing Forum on October 18, at Bucharest

The moderator of the 4th edition of the annual event dedicated to the human resources in shared services & outsourcing industry, COLIN C. LOVERING ISM, Chairman of BRCC and Senior VP, Avison Young Real Estate i

 Read Full article »
Andrei Mihai Crăciun joins the speakers of People in Shared Services & Outsourcing Forum on October 18, at Bucharest

Andrei Mihai Crăciun the Head of office for Innovation, Technological Transfer and Intellectual Property Office from West University of Timisoara will be joining us to discuss whether the private-state actors

 Read Full article »
Sergiu Negut, on the stage of People in Shared Services & Outsourcing Forum on October 18, at Bucharest

On October 18th, Sergiu Negut joins People in Shared Services and Outsourcing Forum to share with us his ideas of ways to support the industry's human capital necessities and create a more efficient cooperation

 Read Full article »
Latest News  
 
about us | newsletter | contact | members area | GDPR policy
Copyright © 2015 by Diplomat Media Events Design by Diplomat Media Events