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
3Pillar Global hired 72 professionals this year, looking for further recruitments

Global custom software development company hired 72 IT specialists in 2019, adding to the team of 500 professionals working in the company's Romanian offices located at Cluj-Napoca, Iasi and Timisoara.

 Read Full article »
JLL: Total office space in Bucharest to reach 3 million sqm

The second quarter of 2019 reconfirmed the increased interest for the office market in Romania. Over 115,000 square meters of office space were leased over this period at the national level, a value similar wit

 Read Full article »
Horváth & Partners launches Steering Lab, Big Data and Machine Learning-based excellence center

Management consultant Horváth&Partners announced it launched an excellence center in Romania, Steering Lab, AI-based and using tools of Big Data and Machine Learning.

 Read Full article »
Colliers International takes over the property management of Vastint's Business Garden Bucharest

The real estate consultancy company Colliers International will be in charge with the property management of the office compound Business Garden Bucharest, developed by Vastint in Orhideea area in Bucharest.

 Read Full article »
Survey: Romanians switch to a lower-paying job for other advantages

One out of five Romanians took at least once throughout their career a lower-paying job and two out of five would take a lower-paying job in exchange for other advantages they see as more valuable, a survey con

 Read Full article »
Fujitsu named a leader in Gartner Magic Quadrant for Data Center Outsourcing and Hybrid Infrastructure Managed Services, Europe

Gartner has once again named Fujitsu a Leader in the 2019 Gartner Magic Quadrant for Data Center Outsourcing and Hybrid Infrastructure Managed Services, Europe. This is the seventh consecutive year that Fujitsu

 Read Full article »
KKR enters exclusive negotiations with GBL for Webhelp Group

KKR, a leading global investment firm, announces it has entered into exclusive negotiations to sell a majority stake in the Webhelp group to Groupe Bruxelles Lambert (GBL). GBL will invest alongside Webhelp's

 Read Full article »
TELUS International continues to grow in Bucharest

In order to support the extensive hiring planned for TELUS International in Bucharest this year, the company has acquired 1,200 sqm more space, in addition to the 8,800 sqm office space it has in AFI Park.

 Read Full article »
EY: Four out of five companies plan to reduce their legal spend over the next two years

Eighty-two percent of companies plan to reduce their legal function costs over the next two years, with 42 per cent of respondents planning on doing so by more than 10 per cent, according to a new report releas

 Read Full article »
ANCOM: About 15 million connections affected by security

About 15 million connections were affected in 2018 by security incidents that had in view the security and integrity of electronic communications networks and services, most of them being about mobile telephony

 Read Full article »
 
 
 
MOST READ ARTICLES
» Raiffeisen Bank Romania outsources onl...
» Horváth & Partners launches Steering ...
» JLL: Total office space in Bucharest t...
» Colliers International takes over the ...
» Survey: Romanians switch to a lower-pa...
» Oracle results pushed down by a strong...
» SSC in Romania. Who takes the lion's s...
» Genpact, Luxoft and Oracle, top lessee...
» Eucom: Nine out of ten corporate Roman...
» The value proposition of HR in 2019
 
EDITOR CHOICE
My HR Lab: Research of suitable candidates and giving feedback to rejected ones, the biggest challenge in HR

During June 2019, My HR Lab company run an online (social media platforms) survey "Challenges of the recruitment process" which enrolled over 100 professionals working in HR and recruitment in Romania.

 Read Full article »
The local market needs more added-value and complex projects to be developed by the companies

The statement has been uttered within this year's Romanian Outsourcing and Shared Services Summit by Catalina Dodu, Country Manager at Atos, pointing to the local enablers that could enhance the innovation and

 Read Full article »
The office market at a glance: The round for tenants is on

Data provided by CBRE show that the office spaces segment will continue to grow rapidly in 2019, and 15 new projects covering 304.000 sqm will be delivered. According to the real estate consultancy agency, curr

 Read Full article »
People Empowering Business Forum 2019 to take place on October, 30 at Bucharest

Latest trends like demographic upheaval, globalization, digital technology, and changing social values and worker expectations, are disrupting business models and radically changing the workplace. These are req

 Read Full article »
Addressing the mantra of cyber-security: Confidentiality, integrity and availability

The fast advancement of technology in all the aspects of everyday life, either personal or professional, and the emerging of AI (Artificial Intelligence) and ML (Machine Learning), not to mention cloud technolo

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