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
Cushman & Wakefield Echinox: StreamWIDE joins the new IT hub created in the Timpuri Noi Square project

StreamWIDE, a company specialized in the software and telecommunications industry, realocates its office in Bucharest in the Timpuri Noi Square project, joining the new IT hub created in the business park devel

 Read Full article »
CBRE: Office deliveries expected to bring new stock of 635.00 sqm, Bucharest to reach 3.9 mln sqm modern office spaces

During 2020–2021 to approx. 635,000 sqm of modern office space are expected to be delivered on market, increasing the Bucharest modern stock at approx. 3.9 million sq m, a step closer to a new a threshold and

 Read Full article »
Uber opens at Bucharest the largest support center to drivers and business partners in CEE

Uber company launched this week in Bucharest the largest center in Central and Eastern Europe that offers assistance to drivers and business partners in Romania, a center where they can contact directly Uber re

 Read Full article »
Samsung and Orange Romania activated the 5G VR Live streaming at Untold Music Festival in Romania

Samsung Electronics and Orange Romania have successfully deployed a 5G New Radio (NR) network to demonstrate a series of 5G use cases at Untold Festival 2019, the largest annual dance music festival in Romania,

 Read Full article »
MVP Lab in Sibiu named as one of Europe's best in the "Ones to Watch" list at European Business Awards

Ropardo MVP Lab has been named as ‘One to Watch' in Europe in a list of business excellence published by the European Business Awards, one of world's largest and longest running business competitions.

 Read Full article »
Endava marks one year since IPO

Endava, one of the most important software companies, present on the local market with 7 delivery centers, reaches an almost double capitalization, 2.07 billion USD, on July 26, 2019, one year after listing. Th

 Read Full article »
Infosys opens cyber defence centre in Bucharest

Infosys, a global leader in next-generation digital services and consulting, announced the launch of its Cyber Defence Centre in Bucharest, Romania. The Defence Centre is an expansion of services delivered thro

 Read Full article »
QuEST Global completes integration of IT Six Global Services

QuEST Global, a global product engineering and lifecycle services company, has successfully completed the integration of IT Six Global Services SRL. QuEST Global acquired IT Six, a software engineering services

 Read Full article »
RE MAX Romania opens three more offices

RE/MAX Romania has expanded its network, adding three new offices – RE/MAX Partners in Cluj, RE/MAX Quality in Sibiu and RE/MAX Prestige in Targu Mures.

 Read Full article »
Microsoft and OpenAI form exclusive computing partnership to build new Azure AI supercomputing technologies

Microsoft Corp. and OpenAI have partnered to further extend Microsoft Azure's capabilities in large-scale AI systems, according to a release of Microsoft.

 Read Full article »
 
 
 
MOST READ ARTICLES
» ROMANIAN OUTSOURCING AWARDS FOR EXCELL...
» Meet the winners of ROMANIAN BUSINESS ...
» Pavel Campan appointed as the new Vice...
» CBRE: Office deliveries expected to br...
» Genpact's COO: Staying ahead of the cu...
» N-iX, EPAM, Luxoft, Ciklum, Intetics, ...
» Molson Coors started to grow its busin...
» Exclusive OT print issue: Genpact may ...
» The Outsourcing industry announces its...
» Capgemini to open new office at Suceav...
 
EDITOR CHOICE
Workplace of the Future conference to take place on November 20th at Bucharest

The Diplomat-Bucharest together with Outsourcing Today organize the 3rd Edition of WORKPLACE OF THE FUTURE, on 20th of November 2019, in Bucharest, at Capital Plaza Hotel.

 Read Full article »
Strategic Talent Acquisition at People Empowering Business Forum on October 30 in 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 »
Informal IT School and UiPath launch an educational program for RPA development to start in October

Informal IT School announced a partnership with UiPath to launch an RPA development educational program of five months, 100 hours of courses, five days a week. The program will run in Cluj-Napoca.

 Read Full article »
Impact Hub Bucharest joins 3house to manage three coworking spaces in the city

Impact Hub Bucharest, a coworking spaces manager and developer of accelerator programs and events merged with 3house, a new concept of workplace launched in 2018. By this, Impact Hub reaches 3 locations and 6.7

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