Seasonal worker visa and other options introduced for farm workers post-Brexit

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Visa options for farm workers introduced

Pre-Brexit, EU nationals were able to move and work freely within Europe. While farm labour shortages have been an issue for several years, there is no doubt the situation has worsened since Brexit restricted the influx of seasonal workers.

Now freedom of movement has come to an end, the number of EU nationals in employment in the UK fell by almost 5% – from 2.3m to 2.2m – since the end of 2019 to the end of June 2021, according to official figures from the Office for National Statistics (ONS).

As a consequence of Brexit, the EU Settlement Scheme was created to secure the rights of European Economic Area (EEA) nationals and their families living in the UK by 31 December 2020.

Applicants acquire either settled or pre-settled status, depending on whether they have lived in the UK for five years or more, or less than five years respectively.

While this has been helpful to securing an existing pre-Brexit workforce, it does not fully help with the labour shortages in the agriculture sector as historically, many seasonal workers from the EU would travel to the UK for a particular season and then return home.

Some farms have hit the headlines for offering workers £30 an hour to pick produce, which shows how difficult recruitment has become since the UK’s departure from the EU.

To try and ease workforce shortages, the government has introduced a seasonal worker visa and, more recently, announced a temporary visa scheme for HGV drivers and poultry workers. There are also numerous other visas and permits farming businesses may be able to benefit from.

Temporary Seasonal Worker visa

Short-staffed farmers are claiming they need more migrant workers to harvest their crops, which is classed by the government as “low-skilled” work.

Pre-Brexit, the majority of these workers would typically come from the EU on a seasonal basis; in October 2020, the National Farmers Union said only 11% of seasonal workers in 2020 were UK residents.

In response, the government introduced a Seasonal Worker pilot scheme in 2019, initially for two years. It was extended in December 2020 for a further year.

The Seasonal Worker visa enables the recruitment of a limited number of temporary migrants – 30,000 in 2021 – for specific roles in the edible horticultural sector. This means that, in order to meet the requirements for the visa, the type of produce being farmed must be either: protected vegetables, grown in glasshouse systems; field vegetables grown outdoors; soft fruit grown both outdoors or under cover; top fruit; vines and bines; or mushrooms.

Workers must apply through an operator that has been approved by Defra and the Home Office, which will sponsor migrants for UK visas. Currently, there are four licenced operators: AG Recruitment and Management Ltd, Fruitful Jobs, Concordia Ltd, and Pro-Force Ltd.

Once a temporary Seasonal Worker visa has been secured, workers are able to come to the UK to carry out their specified farm work for a maximum of six months in a 12-month period. They aren’t able to bring dependents with them and there is no route to settlement.

While this will help the sector in the short-term, it doesn’t go far enough as only specific roles are covered. At some point, it’s likely this route will be pulled altogether too.

Skilled Worker visa

Farmers looking to recruit “skilled workers” could sponsor an EEA or non-EEA national via the government’s skilled worker route.

Employers must check whether the job they are recruiting for is eligible for this type of visa. They can do this by finding the job’s occupation code via the ONS’ occupation coding tool and checking this against the government’s Skilled Worker visa eligible list.

In the agricultural sector, skilled workers could include farm managers or owners, agricultural contractors or technicians, crofters, farmers, herd managers, arboricultural consultants, bee farmers, gamekeepers, and poultry butchers or processors, according to the list.

If the job is eligible for the skilled worker route, the salary paid must be at least £25,600 per year, £10.10 per hour or the ‘going rate’ for a particular role – whichever is the highest. In some circumstances, sponsors may be able to offer a lower salary if certain criteria are met, but no lower than £20,480.

Workers must also prove they can read, write, speak and understand English to at least level B1 of the Common European Framework of Reference for Languages (CEFR).

Skilled Worker visa applicants will need a job offer from a farm willing to employ them before they can apply. The first step for a farm is, therefore, to secure a Skilled Worker sponsor licence, which enables a business to issue certificates of sponsorship to applicants so they can get their visa.

Applications for a sponsor licence can be done online. They require a business to prove it is a genuine employer with a lawful trading presence in the UK, as well show it can offer genuine employment that meets the skill and salary thresholds of the skilled worker route.

The Home Office also requires the organisation to nominate certain individuals, primarily based in the UK, to take on roles – including an authorising officer, key contact and level 1 user – in respect of the sponsor licence.

There is a fee involved too, which depends on the size and type of organisation. Medium and large businesses are required to pay £1,476, which reduces to £536 for small sponsors.

Once a licence is approved, which usually takes around eight weeks, it will be valid for four years with the option for renewal. The application fee will be payable each time the licence is renewed.

Larger employers sponsoring migrant workers are likely to have a dedicated team dealing with sponsorship duties. However, a lot of agricultural businesses are small, family-run organisations, so the entire process can be very admin-heavy.

Temporary visa scheme

Last month (September 2021), the government announced temporary visas for 5,000 HGV drivers and 5,500 poultry workers to attempt to ease the supply chain burdens both in the haulage and food industries.

The move aims to ensure HGV drivers will be able to come to the UK for three months in the run-up to Christmas, providing short-term relief for the haulage industry. It also hopes that farmers and food producers will have access to the necessary workforce to mitigate any potential risks to Christmas food supply.

Since then, the CLA has also called on the government to step in and support the pig sector, which is experiencing labour supply issues at pork processing plants.

Temporary visas are not a long-term solution and are part of the government’s package in an attempt to resolve an existing problem that has been aggravated by both Covid and Brexit.

How the visa scheme will work in practice and whether a temporary visa will in fact relieve the pressure on supply chains just before the festivities will no doubt be revealed over the upcoming weeks.

Frontier Worker permit

The Frontier Worker permit was launched in December 2020 via the Citizens’ Rights (Frontier Workers)(EU Exit) Regulations 2020 to enable cross-border EEA citizen workers to continue with their flexible arrangements, without having to make applications under the post-Brexit points-based system.

A person is a Frontier Worker if they were immediately before the end of the transition period (11pm 31 December 2020) and have been continuously since the end of the transition period an EEA national; not primarily resident in the UK; either a worker in the UK, a self-employed person in the UK or a person treated as a worker or self-employed person in the UK by virtue of regulation 4 of the Regulations.

Applicants will be regarded as being not normally resident in the UK if they have been in the UK for less than 180 days in the 12-month period before the relevant date; or they have returned to their country of residence at least once in the last six-month period or twice in the 12-month period before the relevant date, unless there are exceptional reasons for not having done so. The relevant date can be any date from the end of the transition period.

Applicants need to demonstrate the work they carry out is genuine and effective and not marginal and ancillary to their situation as a whole in the UK.

As a Frontier Worker must have worked in the UK before the end of the transition period and continued to do so since the end of the transition period, the permit is quite limited. Someone new to the labour market wouldn’t be able to apply, for example.

There is the potential for farm businesses to benefit from this route, but it does depend on a worker’s circumstances as it won’t help everyone.

Youth Mobility Scheme visa

Those aged 18 to 30 who want to live and work in the UK for up to two years can apply for a Youth Mobility Scheme visa, providing they have £2,530 in their bank account to show they are able to support themselves.

The visa is currently only eligible for a British Overseas Citizen, British Overseas Territories Citizen, British National (Overseas) or nationals from Australia, Canada, Monaco, New Zealand, San Marino. Nationals from Hong Kong, Japan, South Korea and Taiwan must apply for a ballot to receive an invitation to apply for the Youth Mobility Scheme visa. Nationals from Iceland and India are soon to be added to the list. There is no sponsorship required by a business employing someone via this visa route.

The Youth Mobility Scheme visa tends to be utilised by young people without their own families who want to travel around the UK. An applicant will not be eligible if they have a child under the age of 18 who is either living with them or financially dependent upon them. Youth Mobility visa holders are eligible to work to support themselves, so there is the potential for farmers to benefit from this.

Looking ahead

Many farms have said the shortage of labour has made their business unviable and the National Farmers Union has repeated calls for more support from the government. In response, a spokesperson said the government was looking at ways to help the sector recruit more domestic labour.

The temporary measures that have been introduced may help the industry in the short-term, but many believe they won’t work to solve the problem in the long-term.

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Intra-Company Transfer Visa Update: Are you looking to transfer staff to the UK for temporary work assignments?

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Multi-national companies have been transferring skilled staff for work around the world for many years but how does this work when coming to work in the UK under the points based immigration system?

Multi-national companies have been transferring skilled staff for work around the world for many years but how does this work when coming to work in the UK under the points based immigration system?  

The UK has the short term Intra Company Transfer visa route to allow established employees of an overseas entity to be transferred to the UK to carry out their work in a skilled job on a temporary basis. 

Last month the Home Secretary commissioned the Migration Advisory Committee (MAC) to review the UK’s current route to ensure it complies with the UK’s commitments under free trade agreements and to advise on eligibility criteria for workers and sending organisations. MAC recently published their detailed review of the Intra Company Transfer route 2021 on 13 October. 

What are the proposed changes employers can expect? 
  • General salary thresholds are expected to increase from £41,500 to £42,400 for the main route and decrease for graduate transfers from the current £23,000 to £20,840 
  • Intra-Company Transfer does not lead to settlement today. However this could be an option in the future with any time spent in the UK counting towards settlement where staff switch from this category into another route.  
  • A new 12 month secondment visa is being considered with the possibility of a single renewal where there is a contract between an employer’s overseas and UK entity in excess of £50 million, and the business has been operating for at least 12 months 
  • A new short term route could be introduced to amend current visitor rules to cover specialist technical work which only requires a few days or weeks to complete 
  • The Immigration Skills Charge will remain, however this will not apply to EU nationals under this route from 1 January 2023 further to the UK-EU Trade and Co-operation Agreement 
What can employers expect to remain? 
  • The skills threshold that is currently RQF level 6 is expected to remain the same, so employers can only sponsor staff in jobs that are at degree level and above 
  • Employers can only transfer staff that have been employed in their overseas organisation for at least 12 months (unless paid a minimum of £73,900 a year) or three months for graduate transfers 
  • Sponsored staff will still not be required to meet an English language requirement in comparison to the Skilled worker visa route 

Employers should be mindful that MAC’s report details recommendations made to the Home Office at this stage so it remains to be seen exactly what approach will be taken towards this UK work. If MAC’s report is however reflected, it could result in some significant changes for the Intra Company Transfer route over the next year.   

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UK government to launch short term visas for HGV drivers and poultry workers next month

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The shortage of labour in the UK continues post Brexit and this time it could have an impact on Christmas. The government has had to act fast to tackle the shortage of HGV drivers and poultry workers, but is it little too late?

Temporary Visa Scheme

The government has announced temporary visas to be added to existing visas schemes that will begin in October for 5,000 HGV drivers and 5,500 poultry workers to attempt to ease the supply chain burdens both in the haulage and food industries. The UK Visas and Immigration are preparing to ensure visas are processed promptly that will be valid until 24 December 2021.

This move aims to ensure HGV drivers will be able to come to the UK for three months in the run-up to Christmas, providing short-term relief for the haulage industry and that farmers and food producers have access to the necessary workforce to mitigate any potential risks to Christmas food supply - something UK food and drink manufacturers have been asking for over the last few months.

Temporary visa are not a long term solution and are part of government’s package in an attempt to resolve an existing problem that has been aggravated by both Covid and Brexit. How the visa scheme will work in practice and whether a temporary visa will in fact relieve the pressure on supply chains just before the festivities, will no doubt be revealed over the upcoming weeks.

 

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Tijen works with global UK businesses advising on strategic international recruitment and supports with immigration compliance facilitating assignments and relocation.

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Recruitment challenges lie ahead for the social care sector

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Recruitment and the social care sector

Recruitment and retention have been ongoing challenges for the social care sector for many years, and the end of free movement means they’re unlikely to improve any time soon.

Historically, workers from the European Economic Area (EEA) have been a lifeline for the sector but with further barriers created for those living abroad, this may be about to change. As well as causing difficulties for applicants, the new immigration scheme has significantly increased the amount of administration involved for care homes.

Obtaining a sponsor licence

It is now essential for applicants to be sponsored by their employer, in order to gain a work visa.

This is an additional responsibility for care homes, which will be tasked with applying for and maintaining a sponsor licence, which can be renewed every four years. Having a licence will require additional compliance for employers and failure to meet their responsibilities may result in scrutiny, UK Visa and Immigration sponsor team.

Financial implications

It should be noted that a sponsor licence isn’t free. Alongside the Government visa fees, the total cost for a single applicant working for a medium to large organisation could cost and employer a minimum of £5,500.

There is also the issue of the minimum salary threshold for work visas, which is currently set at £25,600. Many of the roles in the social care sector would fall below this figure, meaning care homes would need to increase salaries to fill the gaps.

These significant financial considerations now raise the question of whether sponsoring someone from outside the UK is financially viable for organizations. Especially when it cannot be guaranteed how long a worker will stay in the role.

The Government’s stance

In 2020, the Government did introduce a specific Health and Care Worker visa to reduce the issues affecting the sector, but this is largely targeted towards those working for the NHS and many care workers will not be eligible.

However, the Shortage Occupation List may provide some much-needed support if difficulties continue. Once a job role is placed on the list, applicants can trade points against a salary that is up to 20% below the minimum salary threshold, preventing the need for increased salaries. The Home Office has commissioned Migration Advisory Committee (MAC) to undertake an independent review of the impact of the immigration changes on the adult social care workforce that closes on 29 October 2021. Over the next few months it is vital for employers and representative organisations, who are facing extreme recruitment difficulties to engage with MAC to ensure their voice is heard.

Mandatory vaccination

Despite a social care recruitment drive recently being launched, there are many issues still deterring people from working in the sector, such as low pay and high stress. The introduction of mandatory COVID-19 vaccinations from 11 November 2021 is also unlikely to help.

Although the reason behind making the vaccine mandatory is reasonable, it does run the risk of putting more people off the care sector. While employers are able to rely on a legislative basis for dismissing staff who refuse to have the vaccine, it would still leave them in a tricky situation.

Mandatory vaccines will also result in further administrative tasks for care home operators, with robust policies needed to clearly define the requirements of both workers and visitors.

This could be even more complicated for foreign workers, as every country has its own vaccination process. While there is the potential for Home Office-approved clinics being set up in each country, which would allow visa applicants to get a certificate to confirm that they’ve been vaccinated, this would come as an additional cost to the employer.

The social care sector faces some considerable recruitment challenges moving forward, and gaps will need to be filled. Having an understanding of the new immigration system is vital, helping to avoid any further difficulties later down the line.

Get in touch with our  healthcare or business immigration team to find out how they can help.

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Business Immigration Update August 2021: What employers need to know

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Remote Right to Work checks to continue until 5 April 2022

The Home Office has confirmed that the end of the temporary COVID-adjusted right to work measures that was due to end on 31 August 2021 has been extended to 5 April 2022. This means employers can continue to conduct remote checks to support their employees in the new world of remote working. This will allow the UK government some time to review their revised plans to be implemented from 6 April 2022 onwards. They have indicated they intend to adopt a new, more secure, long-term digital service for remote right to work checks, which will also include a provision for both UK and Irish nationals.

The Home Office announced earlier in the year that employers will not have to carry out retrospective checks once the COVID-19 adjustments end for all checks done between 30 March 2020 and 5 April 2022 inclusive.

Government plans for new sponsorship system for workers and students

With the end of free movement between the UK and the European Union, employers have experienced an entire revamp of the UK immigration system that was launched at the beginning of 2021. Such changes as new immigration categories have been introduced, a makeover of the points based system impacting skilled workers and students and changes to the visa application process, which some may say, has been triggered by the global pandemic.

But it doesn’t stop there. The Home Office has published its 12 page sponsorship roadmap, which promises to deliver ‘radical changes to the sponsorship process, making it easier for users to understand and navigate, and substantially reducing the time it takes to bring someone to the UK’.

Their main objectives will focus on:

We also expect continued changes to be implemented to the current system between now and early 2022, to include review of government fees, the introduction of a skilled worker eligibility tool and the launch of a pilot salary checking tool in conjunction with HMRC. Watch this space!

  • Quicker processing times, from applying for a sponsor licence to a worker being approved their visa to start or continue their employment;

  • Improving employer’s experience of using the sponsorship system to reduce the burden on them to maintain their licence and providing the functionality and transparency they have much desired for years; and

  • Preventing abuse of the system with effective management of information risk.

Sponsor licence priority service

Since Brexit, the number of UK-based employers applying for a licence to sponsor non-UK workers has increased significantly, and even more so over the last few months since the Brexit “grace period” for EU nationals ended on 30 June 2021. It currently takes the UKVI up to eight weeks to process a sponsor licence application so to keep up with the demand, they introduced a pre-licence priority service at the end of 2020, costing employers an additional £500 for their application to be expedited from eight weeks to two weeks. So far so good, so where is the catch? While this is a positive initiative for faster processing for businesses that need to recruit fast, it is not entirely clear how the priority service is allocated. It is limited in numbers with a maximum of ten applications per day available on a first come first serviced and if applications are not accepted they fall into the normal processing standards without any communication to employers and with a £500 price tag, many businesses will simply not afford it. It remains to be seen whether this ‘service’ has any future at all, particularly with its current offering.

Shakespeare Martineau's business immigration team can help you to secure a sponsor licence for your business so that you can employ skilled foreign workers from outside of the UK and continue to operate post-Brexit.

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The EU Settlement Scheme which was introduced two years ago now allowing EEA nationals and their family members to register their rights to live and work in the UK post-Brexit will close on 30 June 2021. What will this mean for UK employers?

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Six months on: how has Brexit impacted IP?

It’s been six months since the UK left the EU, triggering a number of changes in the business landscape, including around intellectual property (IP) such as designs and trademarks. So, what is the new reality for IP in the UK?

What has changed?

Since 1 January 2021, EU trademarks and Community registered designs no longer cover the UK. The UK therefore created “comparable” UK trade marks and registered designs for all registered EU equivalent registrations at no cost to ensure that rights owners’ UK interests remain protected.

Whilst the parallel importation of IP-protected goods, lawfully placed on the EEA market, from the EEA to the UK will continue to be permitted, it may not be possible for businesses to freely export IP-protected goods from the UK to the EEA without the consent of the IP rights holder.

The UK also now has its own geographical indications scheme to protect food, drink and agricultural products with a geographical connection or that are made using traditional methods.

Do I need to do anything?

If you had made an application for an EU trade mark or an international application designating the EU, or an application for a Community registered design, and your application was still pending at the end of the transition period, you will not have received a comparable mark as of right.  Applicants who were eligible to apply for a UK mark on the basis of a pending EU application now only have up to and including 30 September 2021 to do so, so act fast!

You should also ensure that your representative contact details at the UK and EU Intellectual Property Offices are up-to-date.

To the extent that you had not used your EU trade mark in the UK prior to Brexit, you will have until 31 December 2025 to do so before your UK comparable right could be revoked for non-use.

If your business exports goods, check whether rights clearances will be necessary. Alternatively, make sure your customers have ensured clearance before the goods are imported into the EEA.

If you rely on unregistered design protection you will now need to think carefully about how and where you first market products to the design in order to gain the most appropriate territorial protection.

How has cross-border IP been affected?

Brexit has brought significant change to the way businesses will protect their IP rights across the UK and EU.

As of 1 January 2021, IP rights holders with multi-jurisdictional infringement problems involving the UK and at least one other EU Member State may now have to litigate twice, in both the UK and the EU.

New proceedings in the UK won’t stop ongoing infringement in the EU or result in the recovery of damages for infringements in the EU, and vice versa.

With many cross-border agreements already in place we expect to see more instances of the jurisdiction of a particular territory’s courts being questioned, and multiple territories accepting jurisdiction which can add complexity and cost to a dispute and make early settlement of a matter across multiple jurisdictions more attractive.

To the extent that the UK and EU markets are valuable to businesses, IP portfolios should cover both of these territories which will result in increased administration and cost.

Service of UK claims on defendants based in the EU has also changed, as for now claimants will need the court’s permission to serve on EU defendants and will have to do so through a considerably slower mechanism.  Rights owners should take this into account when seeking to issue proceedings against EU-based infringers.

What about current proceedings?

Any ongoing and new proceedings relating to infringement, validity or revocation of registered trade marks and designs in the UK will be limited to the UK comparable rights alone.

To the extent that parties to existing litigation in the UK wish to address any of these matters in relation to the equivalent EU trade marks or Community designs, they will need to consider commencing parallel proceedings in the appropriate EU forum, whether that may be the EUIPO and/or the courts of an EU member state.

Something to think about when engaging in settlement discussions is that if a claimant in ongoing UK proceedings or even a prospective claimant is able to persuade the defendant to agree to an undertaking not to infringe not just in the UK but also in the EU, without issuing parallel proceedings in the EU, it is arguably doing considerably better than it would if it were to win an infringement claim in the UK.

The same applies regarding damages in respect of sales of infringing product in the EU.

Future relations

With the UK able to create its own system, there is likely to be some divergence from EU processes in the future. However, so far many of the rules from the EU have been translated directly to the UK’s own system.

The one area where there could be a clear difference is in copyright law. With some unpopular decisions by the EU Court in this area, and the UK confirming that it will not adopt the EU copyright directive, there is an open door for change. Another sector where the UK may diverge is on parallel imports and exhaustive rights, although there’s currently a consultation to determine next steps.

As a result of Brexit, there are a number of IP processes that have changed, meaning more care and due diligence may be needed when handling IP in the future. IP law is global by nature and to a large extent harmonized across many countries.  However, businesses should also look out for any developments that may arise following further consultation, now that the UK can determine its own path forward.

Get in touch to find out how our intellectual property team can help.   

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Blog

What does Brexit mean for recruitment in the hospitality sector?

Brexit has made the right to work and live in the UK considerably more restricted for EU citizens, which will significantly impact employers, particularly in the hospitality sector.

The difficulties ahead

Although the hospitality industry is often faced with difficulties regarding retaining and attracting workers, Brexit and the pandemic have exacerbated this.

Extended periods of furlough have forced staff to look for work elsewhere and now new visa requirements are causing foreign workers to be turned away at the border, leaving hospitality businesses facing a considerable employment gap.

New entry requirements for foreign workers

Those looking to work in the UK from the EU now need a skilled work visa, which may require sponsorship. For a business to do this, it requires a sponsor licence which does carry a financial cost.

Workers must also meet the skill and salary levels set by the Home Office, in-line with the new points-based system. The general minimum salary threshold is £25,600 per year and the minimum qualification level is RQF3, which is equivalent to job role at an A-level. Those on a lower salary may still apply by trading points, providing they can meet the threshold with qualifications or experience.

However, this could be a considerable barrier for the hospitality sector, due to the significant number of “low-skilled” roles.

Applicants must also be offered a full-time position within the UK, which for bars and restaurants relying on zero-hours contracts, complicates things.

Possible hurdles to overcome

As the industry slowly returns to pre-pandemic levels, staff shortages in areas such as waiting and food preparation will be the main hurdles for venues.

Longer term, changes to the wages of hospitality staff may be necessary. However, this runs the risk of becoming a substantial overhead for businesses still financially recovering from the pandemic.

Hospitality may also have to shift its foreign talent pools and develop new bilateral relations with other countries such as Australia.

Finding a solution

Until the industry can overcome the challenges facing foreign workers, there are other short-term solutions that can be utilised:

 

  • Youth Mobility Scheme: Available to those from certain countries between 18 and 30 years old, this allows people to live and work in the UK for up to two years. EU nationals aren’t currently included, but this may be subject to change.

 

  • Graduate Visa Scheme: Having launched in July 2021, this scheme is aimed at international graduates already living in the UK. It will allow degree-level students to stay and work for two years and PhD students for three without sponsorship.
Moving forward

It is important that any areas facing extreme difficulties with recruiting workers make it known through stakeholders a call for evidence to the Migration Advisory Committee (MAC).

MAC can then make recommendations to the Government, with roles facing shortages potentially added to the Shortage Occupation list. Jobs placed on this list will not have to meet salary requirements to be approved for a visa.

While Brexit and the pandemic have taken a huge toll on the industry, it’s not all negative. Over 6 million EU citizens applied to the EU Settlement Scheme, enabling the industry to move forward with those already living and working in the UK.

Get in touch to find out how our business immigration team can help.

We have launchedourguide to recovery and resilience, helping to support businesses and individuals unlock their potential, navigate their way out of lockdown and make way for a brighter future. Further advice in relation to COVID-19 can be found onourdedicated coronavirus resource hub.

From inspirational SHMA Talks to informative webinars, we also have lots of educational and entertaining content for life and business. VisitSHMA® ON DEMAND.

Our free legal helpline offers bespoke guidance on a range of subjects, from employment and general business matters through to director's responsibilities, insolvency, restructuring,fundingand disputes. We also have a team of experts on hand for any queries on family and private matters too. Available from 10am-12pm Monday to Friday, call0800 689 4064.

 

 

How can we help?

Our expert lawyers are ready to help you with a wide range of legal services, use the search below or call us on: 0330 024 0333

SHMA® ON DEMAND

Listen to our SHMA® ON DEMAND content covering a broad range of topics to help support you and your business.

Agriculture: diversifying or leasing your land to create habitat banks

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Peter Snodgrass, Partner & Head of Agriculture
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The end is near: COVID-19 right to work guidance update

Updated 18 June: Following the government’s delay on lifting restrictions, The Home Office has updated the Right to Work checks guidance for business’ and their employees during COVID-19.
What does the updated guidance say?

Since 30 March 2020 concession have been in place to allow employers to complete their right to work checks virtually – preventing many employees from attending their work offices as normal.

The Home Office has confirmed this concession will now end on 31 August 2021 and employers will once again be required to conduct the usual pre COVID-19 right to work checks on their employees on or before their first working day, and for follow up checks before the visa end date. More significantly, employers do not need to carry out retrospective checks on those who had a COVID-19 adjusted check between 30 March 2020 and 31 August 2021. They will maintain a defence against a civil penalty if the check they have undertaken during this period was done in the prescribed manner, or as set out in the COVID-19 adjusted checks guidance.

What should employers do?

To prevent compliance risks, it is recommended that employers review their internal processes to anticipate usual Right to Work check processes resuming from 1 September 2021. Scanned and digital copies of original documents will no longer be acceptable and they will not provide a defence against enforcement action. Employers must be presented with the physical document in its original form, unless using the Home Office’s online checking service.

This raises its own challenges, given many businesses are not considering a return to the office any time soon, if at all. Due to the impact of COVID-19, some individuals may struggle to show evidence of their right to work; therefore employers are urged to take extra care to prevent discrimination against job applicants or employees because they are unable to show their documents.

The Home Office’s online Right to Work checking service is available in respect of individuals who hold a Biometric Residence Permit (BRP), or who have been granted status under the EU Settlement Scheme or points-based immigration system. This service can only be used with the permission of the individual, and employers must be careful not to discriminate against those who refuse to allow access to their records.

What happens if someone is employed who cannot legally work in the UK?

Failure to perform right to work checks correctly could result in unwanted Home Office scrutiny and serious ramifications, including;

  • Civil penalties of up to £20,000 per illegal worker;
  • Court-ordered closure of businesses;
  • Prison sentences for individuals involved; and
  • Revocation or limiting sponsor licences for businesses.
We’re here if you have any queries

If you require any assistance about right to work checks and general compliance, speak to Tijen Ahmet in our business immigration team.

From inspirational SHMA Talks to informative webinars, we also have lots of educational and entertaining content for life and business. Visit SHMA® ON DEMAND.

Our free legal helpline offers bespoke guidance on a range of subjects, from employment and general business matters through to director’s responsibilities, insolvency, restructuring, funding and disputes. We also have a team of experts on hand for any queries on family and private matters too. Available from 10am-12pm Monday to Friday, call 0800 689 4064.

How can we help?

Our expert lawyers are ready to help you with a wide range of legal services, use the search below or call us on: 0330 024 0333

SHMA® ON DEMAND

Listen to our SHMA® ON DEMAND content covering a broad range of topics to help support you and your business.

Agriculture: diversifying or leasing your land to create habitat banks

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Peter Snodgrass, Partner & Head of Agriculture
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Your summer guide to recovery and resilience in COVID-19

Your updated summer guide to recovery and resilience

As the UK takes its first steps to ease the current national restrictions and looks forward to an increase in economic activity and recovery it is vital that businesses are prepared in every aspect.

To support businesses and people navigate their way out of the last year and the current national restrictions, unlock their potential and drive for a brighter future, we have updated our guide to recovery and resilience.

From financial considerations, employees, leadership and premises, to supply chain implications, health and safety and protecting your private wealth, our guide highlights what organisations and individuals should consider when moving from survival to recovery to thrive.

Financial considerations

Whether a large corporate with a highly structured board, an SME or an owner-managed business, the financial viability of a business is key to its future success.   However, as the thoughts turn to the roadmap out of lockdown once again, and what the future may look like, businesses that have got through the last year should consider a range of measures to enable them to cope with what is likely be a recession for some industry sectors of the UK. Prudent business owners will be well aware of the predictions and while there will be a bounce back it may take some time for confidence and stability to return from customers and suppliers.

Your employees

Managing a workforce of any size can have its challenges, let alone one that is recovering from a global crisis. Many businesses will have furloughed employees or made the difficult decision to make a number of their workforce redundant. For those businesses that haven’t, it’s highly likely they will still face having to make difficult choices, albeit further down the line.

The knock-on effects of the COVID-19 outbreak have changed the way employers engage with and effectively manage, their employees. The processes, policies and guidelines that worked previously may no longer be fit for purpose for your business, or for your workforce, in the new working landscape. With the rollout of the COVID vaccine facilitating the gradual return of employees back into the physical workplace, this in itself will bring a host of new opportunities and challenges.

Buildings, workspaces and leases

As the world and economy move forward out of lockdown, owners and investors of real estate as well as occupying tenants will have to consider the adjustments they now need to make whilst the restrictions around social distancing continue.
They will need to find new ways of working and inevitably different ways to use their space over the coming months and, at the same time, consider how to manage the cost of premises in these changed circumstances.

Suppliers and supply chain

Many businesses have struggled to comply with their contractual obligations as a result of the COVID-19 pandemic and may have been forced to rethink their supply chains. A focus in recent years on minimising costs, reducing inventories and maximising asset utilisation has often resulted in a reduced ability to cope with disruption. Whilst the impact of the COVID-19 pandemic is unprecedented in modern times, disruption to the global economy is an increasing risk, whether due to political events such as Brexit, US-China trade tensions, or climate change.

Private wealth, family businesses and family

The effects of COVID-19 will undoubtedly have a huge impact on our economy for years to come, with many businesses collapsing under the strain and the level of unemployment set to rise significantly. However, what is less widely reported on is the effect it is having and will continue to have, on families and personal wealth. We’ve already seen that the pandemic has led to an increase in people looking at how they may pass on their wealth to the next generation –and even more so for those that own family businesses.

Compliance – Health and safety

Employers have clear duties under existing health and safety legislation. Obligations to comply with health and safety at work, and to manage and control workplace risks, includes protecting workers and others from the risk of COVID-19 infection in the workplace. That duty is to do everything “reasonably practicable” to manage these risks. The onus of demonstrating that everything reasonably practicable has been done falls to the employer. The best way to demonstrate compliance with the law is usually to follow government and industry-led guidance wherever possible.

Leadership

Strong leadership is a cocktail of authenticity, collaboration, passion, compassion, and a great deal of bravery. We all know the best results occur when we are pushed out of our comfort zones and the ingredients are shaken up, and COVID-19 has done exactly that. With government guidance signalling the UK’s route out of current national restrictions, the time for positive leadership is now. It’s time to take control of what we can and create an environment with enough certainty where people can feel safe enough to flourish centre stage.

We are here to help

The team here at Shakespeare Martineau remain committed to supporting our clients and our communities throughout these challenging times, with

the depth of experience, collaborative ethos and the creative know-how to lead positively to the future.  We are able to offer advice and solutions on a range of subjects for life and business - from employment and general business matters, through to director’s responsibilities, insolvency, restructuring, funding and disputes to issues affecting family businesses, personal wealth planning and family law. Do contact us on 03300 240 333

 

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Reminder - EU Settlement Scheme closes on 30 June 2021

EU nationals have until 30 June 2021 to apply under the EU Settlement Scheme – with this date now only 30 days away (as of today - 1 June), time is of the essence for businesses to act.

All EU, EEA and Swiss citizens and their family members who were resident in the UK by 31 December 2020, who haven’t already applied to the EU Settlement Scheme, should do so now.  Consequently, this will allow them to continue to work, study, and access free healthcare and benefits in the UK after 30 June 2021.

Apply for EU Settlement Scheme

Applications can be made within the UK or abroad. If a biometric passport or national identity card is held then the simplest way to apply is online using the ‘EU Exit: ID Document Check’ app – in most cases by scanning the applicant’s passport chip.

Full details on how to apply can be found at the government website.

Which status will be granted?

Those applying will not be asked to choose which status they’re applying for – instead, the status they’ll receive will depend on how long they’ve been living in the UK when they applied.

 

  • Pre-settled status - those who have resided in the UK for less than five years will be entitled to pre-settled status (up to five years’ limited leave to remain in the UK). To remain beyond that, they must apply for settled status before their pre-settled status expires. Pre-settled status can be lost if more than two years is spent outside the UK.
  • Settled status -  those who have resided in the UK for a continuous period of five years, with at least six months of each year spent in the UK, will be entitled to settled status (a right to remain in the UK indefinitely). This will be retained provided they do not remain outside the UK for more than five years at a time.

The key for applicants to get status is to prove how long they have lived in the UK when they apply. This is mostly done through an automated check on a national insurance number, with the government using HMRC and DWP records to establish residence in the UK.

What should employers do to prepare?

Employers are not legally obliged to encourage EU employees to make an application for the EU Settlement Scheme, however, it is wise to keep staff informed about the upcoming deadline and the implications of failing to apply.

Employers do not need to carry out retrospective right to work checks on existing EU employees after the 30 June 2021 deadline. Although the government doesn’t require it, good practice is to ensure all EU staff employed between 1 January and 30 June have permission to work to minimise the risk of employing someone who has not regularised their stay under UK law by 1 July.

Sign up for our free webinar on 17 June to find out more about right to work checks and the key changes employers need to be aware of since Brexit.

What happens if EU nationals do not apply by 30 June?

Those who fail to apply on time will no longer be able to evidence they are lawfully resident in the UK. While late applications can be accepted at the Home Office’s discretion, there is no guarantee such discretion will be exercised. Furthermore, there is no clear guidance on what would be accepted as “reasonable grounds” for missing the deadline. As a result, those who make unsuccessful applications will most likely need to apply under the Immigration Rules.

In conclusion, from 1 July, recruitment of all EU, EEA and Swiss employees will require staff to demonstrate their right to work in the UK - either with the pre-settled or settled status, or with another immigration route, including a visa under the points-based immigration system.

We’re here if you have any queries

If you require any assistance regarding the EU Settlement Scheme then speak to Tijen Ahmet in our business immigration team.

Our immigration team is ranked as a Leading Firm in the Legal 500 2021 edition. 

From inspirational SHMA Talks to informative webinars, we also have lots of educational and entertaining content for life and business. Visit SHMA® ON DEMAND.

Our free legal helpline offers bespoke guidance on a range of subjects, from employment and general business matters through to director’s responsibilities, insolvency, restructuring, funding and disputes. We also have a team of experts on hand for any queries on family and private matters too. Available from 10am-12pm Monday to Friday, call 0800 689 4064.

How can we help?

Our expert lawyers are ready to help you with a wide range of legal services, use the search below or call us on: 0330 024 0333

SHMA® ON DEMAND

Listen to our SHMA® ON DEMAND content covering a broad range of topics to help support you and your business.

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The future of state aid in a post-Brexit economy

Now that the UK has officially left the European Union, there are a number of mechanisms within the business world that will gradually begin to change, including the way in which the UK regulates state aid.

However, with a complex system still in place and change on the horizon, can the UK use the opportunity to refine state aid subsidies to its advantage?

What is state aid?

State aid – or subsidy control as it is referred to post-Brexit – is an umbrella term given to various forms of financial assistance provided by a public body to a private business, which carry the risk of distorting competition in the marketplace. Financial support mechanisms that fall under the banner of state aid include:

 

  • Subsidies and grants; and
  • Tax-advantaged venture capital schemes such as venture capital trust (VCT), enterprise investment scheme (EIS) and seed enterprise investment scheme (SEIS).

Prior to Brexit, state aid subsidies were governed by a number of EU laws, including the General Block Exemption Regulation (GBER), which aimed to monitor and control Member States when giving aid. Now the UK is no longer required to so closely abide to those regulations, there is an opportunity to formulate a new system that benefits UK businesses and the potential to re-visit some of the rules applicable to the venture capital schemes.

What needs to change?

Past EU Commission audits revealed that the UK was administering the venture capital schemes in a manner which wasn’t fully-compliant with, or in the spirit of, GBER. This led to the introduction of stricter rules, some of which although seeking to ensure greater compliance with EU requirements, are arguably too tightly drawn and fail to take into account the realities of business practice, in particular the very start-up businesses that the schemes seek to support.

One such rule which would merit being looked at as a potential area for change is the company age test.

Company age test

This test was designed to ensure that schemes were more appropriately targeted at young and innovative companiesHowever, this has proven to be regularly problematic. Even for the newest and most novel of businesses, acquisitions of intellectual property or assets from the founder’s prior endeavours, no matter how nominal or incidental, can prejudice the outcome of the test. As a result, companies that should have been eligible for the schemes have been excluded in the past.

Unfortunately, this outcome is a product of legislation which, although rightly designed to avoid artificial structuring and abuse in compliance with the EU state aid rules, fails to provide for any ‘de minimis’ exception. Although the UK must still have a subsidy control mechanism in place which aligns with EU regulation in the new system, there is room for the UK to relax certain parameters, ensuring eligible businesses do not miss out.

How does this benefit the UK?

Whilst it is likely that the current setup of the venture capital schemes will remain largely unchanged, certain tweaks and refinements could smooth out some of the snagging points currently created by the EU’s rules. In this case, refining the company age test would be a good place to start.

The venture capital schemes are one of the most important finance mechanisms we have. They promote investment and provide support to ambitious companies, ensuring a healthy flow of capital through the market and it is essential that these continue, regardless of the changes the UK decides to embrace in future.

Contact us

To find out more about what our investment funds team can do for you, contact Peter Mayhew.

Our updated guide to recovery and resilience covers everything you need to navigate your way out of lockdown, unlock your potential and make way for a brighter future. Further advice in relation to COVID-19 can be found on our dedicated coronavirus resource hub.  

From inspirational SHMA Talks to informative webinars, we also have lots of educational and entertaining content for life and business. Visit SHMA® ON DEMAND.

How can we help?

Our expert lawyers are ready to help you with a wide range of legal services, use the search below or call us on: 0330 024 0333

SHMA® ON DEMAND

Listen to our SHMA® ON DEMAND content covering a broad range of topics to help support you and your business.

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Blog

The UK’s new subsidy control regime

One of the most contentious points of negotiation between the UK and EU for a trade deal between was the UK’s regulation of state aid, or governmental subsidies for companies. This was always a bit puzzling as, while it was in the EU, the UK was one of the least generous donors of state aid, typically providing less than half the EU average when adjusted for GDP.

This was less an impact of the regulatory control over state aid - France and Germany provided much greater state support to their industry within the same legal and regulatory framework - but a political decision as to whether, and to what extent, government should intervene in the market.

The disagreements were of course settled on Christmas Eve, when the UK-EU Trade and Cooperation Agreement (TCA) containing a framework regulating government subsidies was agreed.

 

Government consultation on designing a new approach for subsidy control

The UK government has repealed the EU rules on state aid and is now looking to formulate its own legal framework for controlling state subsidies. Consequently, the Department for Business has published a consultation paper on subsidy control.

What is the purpose of the consultation?

The government is looking to establish a new subsidy control regime that reflects the UK’s strategic interests, with the aim of delivering a regime that:

  • facilitates strategic interventions to support government priorities, including supporting the economy’s recovery from COVID-19;
  • takes account of the economic needs of the UK’s individual nations and strengthens the economic bonds of the Union;
  • protects the UK’s competitive and dynamic market economy; and
  • ensures that subsidies in the UK are given in line with our international commitments including those in the UK-EU Trade and Cooperation Agreement (TCA).

Read more about the subsidy control consultation paper on the gov.uk website.

Change in terminology

So where are we starting from? The first difference is a terminological one, with “state aid” now referred to as “subsidy”. The definition broadly follows the definition of state aid in the Treaty on the Functioning of the European Union.

Subsidies include any “specific financial assistance that comes from a state resource” if it gives an advantages to a business and could affect UK-EU trade. This definition (along with much of the other law relating to subsidy control) will be familiar to anyone who has dealt with the old EU regime. For instance, it will include, fiscal measures as well as subsidies strictu senso.

Although the wording of the UK’s subsidy laws has not changed substantially, there is potential for their application to be significantly different. Subsidies can be permitted where justified by a specific public policy objective, and these objectives can now diverge significantly.

Use of funding

The consultation is concerned with more than just the TCA obligations however. Devolution has given different authorities significant sums that they can spend with limited restrictions. This can allow funds to be more targeted to where they are needed, but also risks regions competing with each other to attract investment from canny companies that will play them off against each other.

For this reason, the government is proposing that public authorities will be able to design and award subsidies that serve public policy objectives, as long as they “minimise any harmful or distortive effects on competition within the UK internal market".

What are the risks of subsidies?

The risks associated with subsidies are just as real on a domestic level as they are at an international one. The commitments in the TCA are exclusively concerned with ‘material effects’ on trade, or investment flowing between the EU and the UK. However, the consultation is asking whether we should bolster the TCA’s restrictions for the UK internal market to ensure companies are not being unfairly subsidised, and the market not unduly distorted.

How will the new subsidy control regime support the economy’s recovery?

The foreword to the consultation paper emphasises the need for government spending and subsidy control as being key in enabling the country to ‘Build Back Better’.

For this reason, the consultation paper is looking for responses to help determine the best shape and form of those subsidies. This will have an impact on key sectors in particular energy and education, through the R&D framework.

In addition, the consultation paper considers whether certain types of subsidies will be exempt from any new subsidy control regime. The government intends to exclude subsidies that “are required for the purpose of defence or safe-guarding national security" from subsidy control.

The consultation paper invites responses as to whether fisheries and farmers should be exempt from the new subsidy control regime, as well as the audio-visual sector.

Minimum threshold

The consultation paper proposes a minimum threshold, similar to the “de minimis” threshold under the EU regime, but at a significantly higher value.

Where subsidies fall within the scope of the new regime, and are above the set minimum values, public authorities will have to make a series of disclosures in relation to the subsidies awarded. These include:

  • details of the subsidy instrument (how it is being delivered);
  • the amount, the date granted;
  • the granting authority; and
  • the purpose of the subsidy.

The Department for Business, Energy & Industrial Strategy (BEIS) has also indicated that "where a subsidy is provided under the terms of a scheme, rather than as a one-off subsidy, public authorities will need to provide information about the categories of beneficiary, the terms and conditions of eligibility for subsidy and the basis for the calculation of the subsidy (including any relevant conditions relating to subsidy ratios or amounts)."

BEIS recognises that this is a lot of bureaucratic effort, and some industries, or smaller subsidies would become unviable because of it. BEIS is considering reducing the administrative burden for 'low-risk' or ‘low value’ subsidies. This is another element that is being consulted on.

Establishing an operationally independent authority

The TCA requires the UK to establish an operationally independent authority that keeps an eye on how subsidies are applied, as well as giving courts powers to review subsidies independently, and to review the decisions of the authority. Unlike the EU Commission’s role in both setting policy objectives, and ensuring compliance, the consultation proposes that this is an independent policing authority only and the does not set pre-approved policy objectives.

This role would seem to naturally sit with the Competition and Markets Authority (CMA). The CMA has significant in-house expertise and, under the UK Internal Market Act 2020, the CMA is responsible for monitoring the effectiveness of the internal market, and appears to already be recruiting state aid advisers. Whoever is responsible for this role, it is important that public authorities and businesses are clear on:

  • the authority’s role and responsibilities;
  • what kind of guidance it will issue; and
  • and whether it will be able to give binding approval to a subsidy.

This last point is particularly significant where businesses are waiting for legal certainty before committing to a project.

This is linked to the key topic of judicial enforcement and remedies for non-compliance.

 

When will the new subsidy control regime take effect?

BEIS have confirmed that any changes to the subsidy control regime would only take effect when new legislation providing for them comes into force. They’ve also confirmed that it will not apply retrospectively to subsidies awarded in the interim.

 

We can support your business

If you need support with any matters relating to the new subsidy control regime, get in touch today or visit our commercial lawyers page to learn more.

Our updated guide to recovery and resilience covers everything you need to navigate your business out of lockdown, unlock your potential and make way for a brighter future. Further advice in relation to COVID-19 can be found on our dedicated coronavirus resource hub.  

From inspirational SHMA Talks to informative webinars, we also have lots of educational and entertaining content for life and business. Visit SHMA® ON DEMAND.

How can we help?

Our expert lawyers are ready to help you with a wide range of legal services, use the search below or call us on: 0330 024 0333

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How do the current travel restrictions impact businesses? | COVID-19

As the impact of COVID-19 continues to affect us all, the UK government’s continued restrictions on travel means further challenges for UK business.

Self-isolation rules will inevitably cause delays to vital projects and businesses will now also need to consider additional costs linked to travelling to the UK. There is no doubt travel should be delayed or minimised if not necessary but, where new hires from overseas are critical to the operation of the business, this is not always possible.

Here we explore what employers need to know about the current travel restrictions and how this may impact their business.

Employees travelling to the UK

The UK borders remain open, but if travelling from a red list country, your employees must quarantine upon arrival in a hotel and have residence rights to enter the UK - be British, Irish or have a valid UK visa. EU citizens can have status under the EU Settlement Scheme. This means short-term business visits are banned if travelling from a ‘red list country’.

If entering England from a country not on the red list, self-isolation is required for ten days, or the use of the Test to Release scheme to reduce the self-isolation period to five days, with some limited exceptions in ‘very essential’ jobs.

The rules for Scotland are even more stringent, requiring all international arrivals from outside the Common Travel Area entering Scotland to self-isolate in managed quarantine hotels.

Mandatory testing

The UK government imposed mandatory testing on anyone intending to travel to the UK that must be taken within three days of their departure to the UK and produce a negative result before travel.

What do businesses need to consider?

The main considerations for business is to ascertain the level or type of restrictions that will apply to your employees that will predominantly be determined by the answers to three key questions:-

 

  1. Where are your employees travelling from?
  2. What is their immigration status?
  3. What is the reason for their travel?

 

In addition, businesses should factor in mandatory isolation periods, availability of flights and costs for hotels before giving employees the green light to travel.

While Boris Johnson’s ‘roadmap to freedom’ was announced this week (Monday 22 February), with the prospect of restrictions being fully eased by 21 June (if all goes to plan), the future for travel is still yet to be seen, with the PM indicating a vaccine passport for international travel being introduced.

For now, what was a simple business decision to permit travel to the UK is no longer the case.

We’re here if you have any queries

For further guidance and support, particular around queries or concerns on the immigration status of your employees, speak to Tijen Ahmet in our business immigration team.

From inspirational SHMA Talks to informative webinars, we also have lots of educational and entertaining content for life and business. Visit SHMA® ON DEMAND.

Our free legal helpline offers bespoke guidance on a range of subjects, from employment and general business matters through to director’s responsibilities, insolvency, restructuring, funding and disputes. We also have a team of experts on hand for any queries on family and private matters too. Available from 10am-12pm Monday to Friday, call 0800 689 4064.

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The impact of Brexit on legal professional privilege in cross-border communications

Following the end of the UK-EU transition period, it is now clear that there is no agreement on preferential market access for legal services. This has significant implications for the UK legal services sector. UK solicitors are no longer recognised as solicitors qualified to practice within the EU.

So how does this affect legal professional privilege in cross-border communications with lawyers? As UK departs from the EU, both lawyers and businesses need to reassess their ability to assert legal professional privilege before national courts as well as the European Commission.

What does legal professional privilege mean?

Legal professional privilege entitles a party to withhold evidence (written or oral) from a third party or the court, such as legal advice privilege (confidential communication between lawyers and their clients for the purpose of seeking or giving legal advice), or litigation privilege (confidential communication between lawyers and their clients/third party for the dominant purpose of being used in connection with actual or pending litigation).

Legal professional privilege in England and Wales

As far as English law is concerned, communication with foreign lawyers is not excluded from legal professional privilege.

The English court has recently clarified that, as far as court proceedings in England & Wales are concerned, legal professional privilege will continue to extend to communications between a client and its foreign lawyer, irrespective of the location where the lawyer is practising (PJSC Tatneft v Bogolyubov & Ors). Additionally, the English court will also not investigate the foreign regulatory requirements in determining whether legal professional privilege applies.

The decision offers a welcome relief to UK organisations that either employ internal legal teams of internationally qualified lawyers or solicit advice from foreign lawyers.

Legal professional privilege in the EU 

For businesses operating in the EU, or embroiled in legal proceedings in the EU, the position is different. In the absence of any agreement between UK and the EU, all UK lawyers (who have not re-qualified as EU lawyers) are now treated as third-country lawyers in the EU.

What this means is:

In the context of actual or potential EU and EEA competition proceedings before the EC, legal professional privilege will no longer extend to communications with UK qualified lawyers (unless they also requalify in the EU). This is because EU law dictates that LPP does not extend to third-country lawyers (Akzo Nobel C-550/07).

Risk of disclosure could potentially arise in scenarios where:

  • the company receiving legal advice is based in the EU/EEA;
  • one of the recipients of legal advice is physically based in the EU/EEA; or
  • the parent company of the recipient company is based in the EU/EEA and has access to its UK subsidiary’s documents.

Going forward, clients (and lawyers) will need to be mindful of how legal advice is procured (and given), particularly when it touches upon competition law issues that may eventually come before the EC.

EU member states will also no longer be bound by the EU Lawyers’ Services Directive. Instead, national rules on legal professional privilege will apply in proceedings before national courts, national investigations and private party litigation.

Legal professional privilege rules vary greatly across the EU, so clients (and lawyers) will need to carefully review the national laws in their relevant jurisdictions to assess whether, and if so how, legal professional privilege applies.

Practical tips to protect legal professional privilege in the EU

 

  1. Specifically reference recognised EU lawyers on all communications.
  2. UK lawyers should liaise with EU lawyers so that any issued guidance or formal advice is signed off by the EU counterpart.
  3. Where possible, cross-jurisdictional teams should be formed where EU Lawyers formally lead representations and this should be recorded in communications.
  4. Any material produced by UK lawyers generated exclusively for the purpose of obtaining advice from an EU lawyer will remain privileged.
We’re here to help

With our Multilaw membership, we have direct access to over 10,000 lawyers across 150 commercial centres, allowing us to work alongside local partners, offer cross-jurisdictional services and support our clients with on-the-ground representation across the EU (and other continents).

If you have any questions on how the change in legal professional privilege rules could affect your business, or would like any additional guidance or support, please get in touch with Sneha Nainwal in our commercial disputes team.

Our Brexit & Beyond hub contains the latest news, articles, briefings, commentary and webinars concerning the legal implications of Brexit, ensuring that you have all the information you need to drive your strategic thinking, now and in the future.

From inspirational SHMA Talks to informative webinars, we also have lots of educational and entertaining content for life and business. Visit SHMA® ON DEMAND.

Our free legal helpline offers bespoke guidance on a range of subjects, from employment and general business matters through to director’s responsibilities, insolvency, restructuring, funding and disputes. We also have a team of experts on hand for any queries on family and private matters too. Available from 10am-12pm Monday to Friday, call 0800 689 4064.

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Technical

What does the new Brexit trade deal mean for the energy sector?

On the 24 December 2020, the United Kingdom, the European Union (“EU”) and the European Atomic Energy Community (“Euratom”) negotiating teams reached agreement in principle on the basis of the future relationship between the UK and the EU.

The agreed principles are set out in three draft agreements. Two of the agreements in the Brexit deal impact the energy sector:

The third agreement covers the exchange and protection of classified information. Each of the agreements applies provisionally until 28 February 2021, to give the EU and UK Parliaments time to analyse and ratify them. Approval by the UK Parliament has already been achieved, although ratification by the European Parliament and the Council of the European Union may require more time.

Brexit concerns: The Brexit deal and the energy sector

During the extended Brexit negotiations concerns were expressed over a number of areas in which the GB energy market might lose out. These included loss of access to the EU’s Internal Energy Market (IEM), including day-ahead market coupling, cross-border balancing and capacity market integration; loss of influence over EU policy resulting from membership of ENTSOe, ENTSOg and ACER terminating; adverse impact on UK renewables and carbon emissions policies; and disruption of nuclear operations.

The TCA and NCA address these issues through the various high-level principles they enshrine. However, they essentially provide a framework for the development of detailed arrangements for the future relationship in the energy sector. A range of committees will oversee the development of detailed measures and these include specialised committees addressing the maintenance of a level playing field for open and fair competition and another, addressing technical barriers to trade which will address cooperation on energy standards.  A Specialised Committee on Energy will address other issues including the efficient use of interconnectors.

Much attention during the Brexit negotiations was focused on the future arrangements for Northern Ireland. These were largely settled in the Ireland/Northern Ireland Protocol agreed as part of the Withdrawal Agreement. In the case of the energy sector, it was agreed that the all-island electricity market, the i-SEM, would continue post-transition period and, to facilitate this, the UK government agreed under the Protocol to apply EU law in Northern Ireland in respect of the i-SEM.

Access to the Internal Energy Market (IEM)

One of the key areas of concern from a GB perspective pre-Brexit was the degree of access that would be retained to lower-priced power in the IEM. In particular, would the GB interconnectors be able to continue their participation in the single day-ahead price-coupling process?

Whilst it is now established that the UK is a third country outside the IEM and interconnector trading has reverted to explicit auctions, new coupling arrangements are envisaged by the TCA for the day-ahead timeframe as outlined in Annex ENER-4.  The TCA provides for an alternative mechanism to be developed, based on the concept of multi-region loose volume coupling under a process to be overseen by the Specialised Committee on Energy. The new coupling arrangements are to be implemented by early 2022 and, whilst likely to be less efficient than single day-ahead price-coupling, should enable the GB market to regain at least part of the ‘social benefits’ of coupling. In the interim, the GB interconnectors can be used to access the EU markets but only through the less efficient mechanism of explicit auctions.

There are no similar provisions in the TCA to facilitate access to the IEM in other timeframes, including intraday and balancing. However, the Parties are required under Article ENER.13 to develop “arrangements to deliver robust and efficient outcomes for all relevant timeframes, being forward, day-ahead, intraday and balancing” and this is reiterated by Article ENER.14.

Access to EU Institutions

Having been at the forefront of liberalisation of the EU energy sector and the development of cross-border trade, the UK risks losing its influence post-Brexit. This would have been a major concern if the UK had retained its participation in the IEM but remains an issue even with the reduced level of integration provided for in the TCA. Whilst the new arrangements leave the GB energy market outside the IEM and the key institutions, ENTSOe, ENTSOg and ACER, the TCA does include a framework for co-operation between UK TSOs and ENTSOe and ENTSOg. This will fall short of membership by the UK TSOs but does create the opportunity for cooperation in a number of key areas, including: technical procedures to implement the provisions on network development; efficient use of electricity and gas interconnectors; electricity trading and cooperation on the security of supply; offshore energy infrastructure planning; and gas decarbonisation/gas quality.

Similarly, Ofgem has ceased to participate in ACER but the TCA provides that ACER and Ofgem must develop contacts and enter into administrative arrangements as soon as possible to facilitate meeting the objectives of the agreement as a whole. The specialised committee on energy must agree guidance for this cooperation as soon as practicable (Article ENER.20).

Carbon emissions

Concerns were expressed pre-Brexit that the UK government might not maintain the same environmental standards and levels of protection on climate change in the future, particularly in light of the UK withdrawal from the EU Emissions Trading Scheme.   Whilst the TCA acknowledges the Parties’ rights to set their own policies on the protection of the environment and climate change, it includes a commitment not to reduce these protections below the levels at the end of the transition period in a way that might affect trade or investment (Part 2, Heading One, Title XI Article 7.2).

There is also a specific commitment to implementing the UN Framework Convention on Climate Change and the Paris Agreement. The fight against climate change is recognised as an “essential element” of the TCA and “materially defeating the object and purpose of the Paris Agreement is specified in Title III Article INST. 35 (4) as constituting a “serious and substantial failure” to ensure an essential element of the TCA.

Renewables

Similarly, the Parties have committed to maintaining current targets for renewables. In the case of the UK, this means the targets set out in the National Energy and Climate Plan (ENER.21). The Parties have also committed to ensuring that support for electricity from renewable sources will facilitate the integration of renewables in the electricity market (Article ENER 22). The Parties are to cooperate in the development of offshore renewable energy by sharing best practices and facilitating the development of specific projects with aim of developing higher volumes of renewable energy to address climate change. There is a specific commitment in respect of the potential for renewable energy and associated offshore network in the North Sea.

Developing the detail

By establishing a basis for EU and UK institutions to collaborate in the energy sector and setting out some high-level principles, the TCA and NCA have created a framework for developing the detail of future cooperation in the sector. Inevitably this will result in looser ties than would have been the case had the UK had remained in the IEM but it seems likely that, following on from the protracted trade negotiations, discussions on energy matters will be ongoing for the foreseeable future as the new relationship is developed.

Brexit and nuclear power

The UK government gave notice to withdraw from the Euratom at the same time as giving notice to withdraw from the EU on the basis that the treaties governing membership were considered to be inextricably linked. That gave rise to concerns that the UK’s nuclear industry might be disrupted. In particular, new nuclear cooperation agreements would need to be put in place to permit the future supply of nuclear materials and equipment, including intellectual property, software, and skills, to the UK.

Alongside the broader based TCA, the UK government agreed with Euratom a separate NCA for the safe and peaceful use of nuclear energy. The NCA applies from 1 January 2021 on a provisional basis until 28 February 2021 and, subject to ratification, will remain in force for an initial period of thirty (30) years.

The NCA provides a framework for cooperation in nuclear materials, non-nuclear material, equipment and technology; facilitation of commercial cooperation relating to nuclear fuel cycle; use of radioisotopes and radiation in agriculture, industry and medicine; exchange of scientific and technical information and participation in joint projects and establishment of joint ventures as outlined in Article 4 of the NCA.

Contact us

If you have any questions on what the Brexit deal means for the energy sector and the impact on trading arrangements with the EU, or need any guidance or support get in contact or contact a member of your local energy team.

If you would like to read more of our energy blogs and guides sign up to our mailing list to join our quarterly energy mailer.

Our free legal helpline offers bespoke guidance on a range of subjects, from employment and general business matters through to director’s responsibilities, insolvency, restructuring, funding and disputes. We also have a team of experts on hand for any queries on family and private matters too. Available from 10am-12pm Monday to Friday, call 0800 689 4064 or request a callback.

How can we help?

Our expert lawyers are ready to help you with a wide range of legal services, use the search below or call us on: 0330 024 0333

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Guides & Advice

The impact of Brexit on divorce and family law

The family law legal system in the UK has increasingly become an international one - over the last few years alone we have seen an increase in cases involving international family law issues and cross-border disputes.

It is now not unusual for families to live in different countries and/or own properties abroad alongside multinational businesses. There are also many children that are part of families who frequently travel between, and live in, more than one country.

So how will Brexit affect the global nature of the way in which many families live and work? We highlight some of the key areas where Brexit is likely to have an impact.

Will Brexit affect my divorce?
The pre-Brexit situation

The question of which country a divorce may be issued in was governed by a Council Regulation called Brussels II. This meant that there was often a race to the court under what is known as the lis pendens rule. This is a rule that the first party to issue proceedings at court, secures the jurisdiction of the court in that particular country. Urgent advice and action was often needed to find out the best place for proceedings and then to issue quickly.

Divorces issued on or before 31 December 2020 will continue to follow these rules and the divorce will be recognised according to the Brussels II regulation.

Divorce after Brexit

The lis pendens rule is now replaced by a forum conveniens rule, which previously applied to all other non-EU countries. This essentially means that a court may decline to deal with a divorce if it appears more appropriate or convenient for a different country to deal with it. It is anticipated that this may well lead to more protracted and costly disputes regarding which EU country should issue the divorce if the parties cannot agree.

Another area which has been impacted by the Brexit deal is the jurisdictional grounds to bring a divorce. A petitioner can only start divorce proceedings in England and Wales if the English court has jurisdiction to deal with those proceedings. The removal of Brussels II has now changed the definition of the jurisdiction in the divorce petition and these discreet technical points may well have a big impact on future divorce applications.

Read more about the divorce process and how we can help you.

The impact of Brexit on children law
The pre-Brexit situation

The Brussels II regulation also provided consistency in international family law disputes e.g. by recognising parental responsibility across EU member states and regulating the rules around child protection and child abduction in the EU.

How have things changed after Brexit?

It remains to be seen how this will impact on future international children disputes.  What we can say it that it is likely to lead to more cross-border disputes which could potentially be very complicated.

Parenting through a divorce or separation is not easy, regardless of jurisdiction. Read more about how we can guide you through the process and ensure the welfare of your children remain the top priority.

In addition to the above, there are many other changes within family law including areas such as maintenance agreements. As with all legal matters, however, our experience has shown that costs can be reduced and litigation less protracted if legal advice is sought at an early stage.

Read more about our international family law expertise.

No doubt we will find in the coming months that there are likely to be some cases that fall through the cracks, as there will undoubtedly be some gaps in the law that the Brexit deal has not covered. Therefore the true impact of Brexit on divorce and family law still remains to be seen.

We continue to monitor the key updates and our team of family lawyers are on hand to advise you with any international family law query that you may have.

How we can support you

We have wide experience of all types of jurisdiction cases and regularly work alongside lawyers in other countries to secure the best outcome for you and your family. For advice and support contact Monica Ghai or complete our enquiry form and we’ll call you back to arrange a free, 20 minutes no-obligation confidential consultation at a time to suit you.

From inspirational SHMA Talks to informative webinars, we also have lots of educational and entertaining content for life and business. Visit SHMA® ON DEMAND.

Our free legal helpline offers bespoke guidance on a range of subjects, from employment and general business matters through to director’s responsibilities, insolvency, restructuring, funding and disputes. We also have a team of experts on hand for any queries on family and private matters too. Available from 10am-12pm Monday to Friday, call 0800 689 4064.

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The new trading arrangements with the EU | Brexit

After eight months of negotiation, and some four and a half years after the referendum vote to leave the EU, the EU-UK Trade and Co-operation Agreement signed on 30 December came into force provisionally at 11 pm (UK time) on 31 December 2020, and the UK finally left the EU customs union and single market.

The Agreement, which is one of a package of agreements reached with the EU, was approved by Parliament in the UK on 30 December but has yet to be ratified by the European Parliament and the Council of the European Union. This is expected to take place early this year.

Whilst the Trade and Co-operation Agreement offers some significant free trade benefits, it represents a profound change for British businesses and their trading arrangements. As a member of the EU customs union and single market, the UK was part of a single customs territory with the same standards, rules and supervision and enforcement systems. As a result, trade between the UK and other EU member states was seamless. This is no longer the case.

Many businesses will have been planning for Brexit for some time, implementing Brexit related reviews and addressing issues identified by, for example, amending standard contract documents, or addressing issues specifically when negotiating bespoke contracts. None of this preparation will have been wasted and if you still have work to do, it is important to act now.

The EU-UK Trade and Co-operation Agreement focusses on the arrangements for trading goods; the Agreement has very little to say about services. The key headline benefit of the Agreement is that goods imported and exported between the UK and the EU will be free from tariffs and quotas. However, it is clear that, at least in the short term, business exporting to, or importing from, the EU face significant change and some important challenges:

• To qualify for the preferential tariff arrangements, goods must comply with the applicable rules of origin set out in the Agreement. These are designed to determine the economic nationality of a product where that product includes materials or components made in more than one country. In some cases, compliance may not be straight forward. Marks & Spencer’s chief executive Steve Rowe, using the example of the company’s Percy Pig sweets which are manufactured in Germany, imported into the UK and then exported to the Irish Republic, France and the Czech Republic, noted that “About a third of the products in our food business is subject to complex rules of origin around componentry and how much has been altered in the UK.”

• Goods traded between the EU and the UK will now be subject to customs formalities and, in particular, all imports into the EU will need to meet EU standards and will be subject to regulatory checks and controls. In practice, as cross border traffic starts to return to normal levels after the Christmas and New Year period, this may mean delays and additional cost. Businesses which rely on the speed of delivery may be particularly vulnerable. Already, there have been a number of press reports of UK exporters having difficulties in getting fresh fish and seafood to EU markets and facing order cancellations as a result.

• The UK and EU are now separate regulatory systems, which means that most businesses serving both the UK and EU markets need to comply with two separate regulatory regimes. There is no mutual recognition of conformity assessments, which means that UK manufacturers will need to have their products assessed for compliance with an EU notified body. However, the Agreement does contain measures designed to simplify compliance requirements and facilitate trade.

• It is important to remember that under the Northern Ireland Protocol, agreed as part of the UK-EU Withdrawal Agreement, Northern Ireland effectively remains part of the EU single market. This means that goods entering Northern Ireland from Great Britain will need to comply with EU rules and will be subject to regulatory checks and controls.

Whether the disruption currently being experienced by some businesses is simply the consequence of teething problems, or symptomatic of more permanent regulatory friction, business will need to adapt quickly, and a clear understanding of responsibilities, both contractual and regulatory, and how they are impacted by the new arrangements will be crucial.

Contact us

For further advice and help with any aspect of your trading arrangements with the EU and beyond, please contact Matthew Sutton on a member of the commercial team in your local office.

How can we help?

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Brexit and the end of free movement

Although the UK left the EU on 31 January 2020, the 12 month transition period meant that free movement did not effectively end until 31 December 2020.

Now that the transition period is over, it is vital that employers are aware of their new obligations and responsibilities regarding recruiting from abroad, as well as ensuring their staff maintain the right to work in the UK.

What is the EU Settlement Scheme?

The UK government’s EU Settlement Scheme offers EU, European Economic Area (EEA) nationals and Swiss nationals the opportunity to protect their residence in the UK now that the transition period has ended, provided they were in the UK before 31 December 2020.

For the purposes of the Settlement Scheme, citizens of countries in the European Economic Area (Norway, Lichtenstein, and Iceland) have the same eligibility as full EU citizens.

What is the deadline for the EU Settlement Scheme?

The government has allowed a grace period up to 30 June 2021, whereby eligible EU nationals living in the UK who have not yet applied for settled or pre-settled status can still do so.  It is important to note that this only applies to EU nationals who moved to the UK before 31 December 2020, meaning the grace period will not allow any further EU citizens to move to the UK for work without going through the UK’s points based system, which has previously applied to citizens of non-EU countries.

EU nationals who moved to the UK, but have yet to apply for settled or pre-settled status, may be at risk of losing their right to live and work in the UK if they miss out on this scheme. Employers may wish to encourage staff to check their eligibility and, if necessary, make an application for settled or pre-settled status before the deadline. Failure to take advantage of the grace period could result in employers having to dismiss employees who have lost their right to work.

While there is no requirement for employers to carry out retrospective right to work checks for existing employees, for new hires from 1 January 2021 the risk of potentially losing business critical staff at short notice should be taken seriously by any business. Ignorance of the need to apply to these schemes will not be a valid excuse.

Applying for a sponsor licence

Any company looking to recruit foreign nationals in 2021 will require a sponsor licence from the Home Office. Previously, many UK businesses were able to recruit EU nationals without the need for a licence, as EU citizens merely needed to present proof of citizenship of an EU state before being hired.

With many UK businesses taking the steps to apply for a sponsor licence in 2021, the Home Office are understandably busy. Therefore it is advisable to make an application well in advance of the need to sponsor visas to prevent any delays, particularly businesses that foresee the need to recruit from abroad in the near future.

Businesses will need to factor in time for the preparation and processing of visa applications in their recruitment timelines going forward. They may also want to review the quota allocated to them through their sponsor certificate, and whether an application for an increased quota is appropriate. Differing rules will apply for intra-company transfers.

Our specialist business immigration team can assist and advise with applying for a sponsor licence.

EU nationals and non-EU nationals are now treated the same

As the government has been promising for many years, the UK has now expanded its points-based immigration system to apply to all foreign nationals equally. EU nationals must now follow the same system that non-EU immigrants have been subject to.

Additional options will still be available for non-UK nationals to come to the UK using a variety of visa options. These include, but aren’t limited to, Global Talent and Graduate visa options, as well as health and care worker, or creative and sporting visas. Each will have their own specific requirements.

Watch our short to our webinar on understanding the UK’s new immigration system

What does the future hold?

It is notable that with the new immigration rules, the UK has abolished its annual cap on migration to the UK, applied to immigrants from outside the EU under the old regime. Whether this will lead to an overall increase or decrease in net migration remains to be seen.

It is notable that the government’s net migration figures often include students coming to the UK to study at universities. It is likely that there will be a fall in students coming to the UK from EU countries in 2021 and beyond, as they will now have to pay standard international fees, which often far exceed the previous regime for EU students. Read more about the new student immigration routes.

It is no secret that the UK’s new immigration policy is encouraging skilled workers to come to the UK, with no preference from their country of origin. The new regime will offer no routes for ‘low skilled’ workers to come to the UK for work purposes, meaning the UK’s pool of employable low skilled workers will shrink from across the EU, to being drawn from the existing UK workforce only.

For employers, the UK’s new immigration policy may encourage businesses to up-skill their existing workforce, particularly for those high skilled jobs where specialist vacancies might have previously been filled by lateral hires from elsewhere in the EU.

For those jobs that cannot be filled from upskilling an existing workforce, the countries from which incoming hires may come is likely to change, with there no longer being an advantage in speed or ease in the hiring of an EU citizen over someone from, say, India or the USA.

We can help keep your global workforce moving

For further guidance and support speak to Tijen Ahmet in our business immigration team.

From inspirational SHMA Talks to informative webinars, we also have lots of educational and entertaining content for life and business. Visit SHMA® ON DEMAND.

Our free legal helpline offers bespoke guidance on a range of subjects, from employment and general business matters through to director’s responsibilities, insolvency, restructuring, funding and disputes. We also have a team of experts on hand for any queries on family and private matters too. Available from 10am-12pm Monday to Friday, call 0800 689 4064.

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Personal data after Brexit – what has changed and how it affects you and your business

It’s just over two and a half years since major changes were introduced to the data protection legal landscape in the UK with the coming into force of the GDPR.

But with the Brexit transition period now at an end, the GDPR, as an EU Regulation, is no longer automatically part of UK law.  The UK is, however, adopting it into UK national law, meaning that from 1 January 2021 the UK GDPR and the EU GDPR will co-exist separately. However further major changes now affect every business in the UK.

This guide looks at the steps you should take to make sure your business is ready to manage its personal data in a post brexit world.

Which data protection laws apply from 1 January 2021?

The European Commission has been considering whether the UK’s laws are adequate to protect the privacy and data protection rights of EU citizens.  It had not issued such a decision (known as an Adequacy Decision) by 1 January 2021 and so from that date there have been three overlapping regimes:

The UK GDPR

A slightly expanded version of the GDPR which will apply for data processed in the UK or by an EU (or other international) business targeting customers in the UK. It will include aspects not covered by the basic GDPR, such as processing for law enforcement purposes.

The EU GDPR

This will apply, for example, if a business targets EU customers or has a base in the EU.

The Withdrawal Agreement version of the GDPR

A ‘frozen version’ of the EU GDP which will apply as a safety net for EU citizens to personal data processed by UK businesses as at the last day of the transition period (31 December 2020). This version will last until an Adequacy Decision is issued.

Some UK businesses will potentially be subject to all three of the data protection regimes. These include UK businesses which:

  • have operations in the EU
  • sell to customers in the EU
  • or monitor EU citizens through their website browsing activities.

Will there be much difference between the regimes?

Not to start with. But it’s very possible that over time the EU GDPR and the UK GDPR will diverge. Particularly since the UK courts are no longer obliged to follow European Court of Justice decisions after the end of the transition period.

What do you need to do?

Arrange your processing of data so that you can, if necessary, distinguish between the various categories of data (UK citizens, EU citizens, and pre-transition period EU citizens’ data) – in case in the future you need to treat them differently under EU and UK GDPR.

For example, if you target customers in the EU or if you have non-UK data in your database, check whether your database can be set up to tag the different sets of data. If it can, that’s something you should be doing.

Will there be any effect on cross-border data transfers?

Yes.  Another consequence of not being granted an Adequacy Decision.

Under the EU GDPR, transfers of data around the EU can be done freely but transfers to so-called ‘third countries’ can only take place if appropriate safeguards are put in place.

The UK would have become a “third country” on 1 January 2021.  A grace period was however agreed in the EU-UK trade deal concluded on Christmas Eve 2020 so that has not (yet) happened (see below). If the UK becomes a “third country” then, from that point, without an Adequacy Decision personal data can’t be transferred from the European Economic Area (the EU plus Iceland, Liechtenstein and Norway) to the UK without appropriate safeguards.

Normally, this will be done by the exporting company and the importing company putting the EU Standard Contractual Clauses (SCCs) in place between them.

And traditionally, this has been straightforward.

But things have been made a little more complicated by a recent decision of the ECJ, which, as well as invalidating the Privacy Shield, made clear that if you want to rely on the SCCs you need to make sure they’re adequate to protect individuals’ data under the laws of the third country.

How do you do that? By supplementing the SCCs to cover off any concerns. Because whilst you can supplement the clauses, you’re not allowed to amend them.

Remember also that data being accessed via a computer outside the UK counts as a cross-border transfer – even if the data is sitting on a server in the UK.

Fortunately, the EU-UK trade deal signed on Christmas Eve 2020 spared UK businesses from the need to have the necessary safeguards in place from 1 January 2021.  A term of the deal postponed by up to six months (four plus a possible two more) the point at which the EU will regard the UK as a third country, subject to certain conditions. Although nothing is certain, it is possible that the breathing space has been agreed because the European Commission believes it will be able to issue the UK with an Adequacy Decision in the next few months before the grace period expires.

If you want to transfer personal data from the UK to the EEA, the UK Government has already confirmed it will treat the EEA as having adequate protection laws, though it will be keeping that position under review.

How to ensure you are ready for the cross-border transfer changes?

While we wait to discover whether an Adequacy Decision will be granted, you should:

  1. Review your key international data flows and record them in your Article 30 records of processing.
  2. Prioritise them, in terms of volume or key data or sensitive special category data that’s flowing, and tackle the most important first.
  3. Prepare ready-to-use versions of the SCCs so that cross-border data transfers are not disrupted if the grace period ends at the end of April (or June if it is extended) without an Adequacy Decision for the UK. Don’t forget that SCCs will be needed even for transfers from an EEA company to a group company in the UK.
  4. Identify your processors in the EU (e.g. cloud, HR, payroll, database service providers). And ask them what appropriate safeguards they propose to use.
  5. Consider how to deal with transfers by your EU processors to you as controller in the UK.
    • Because as things stand at the beginning of 2021, the only approved SCCs which currently exist are:
      • from controllers to processors, or
      • from controllers to another controller.

Not the other way round.

However, on 12 November 2020 the European Data Protection Board published some brand new SCCs which, if adopted, will include clauses that can be used for processor-to-controller and processor-to-processor transfers.

The six months breathing space will pass quickly. Be ready to put the new SCCs in place (once they’re adopted) to cover any transfers of personal data from the EEA to the UK after the end of the grace period if no Adequacy Decision has been issued to the UK by then. An Adequacy Decision is not a foregone conclusion: the European Commission has previously expressed reservations about whether some of the UK Government’s legal powers to require access to personal data for national security reasons are compatible with EU rights to data protection, and also whether the UK’s participation in the Five Eyes Intelligence Network could mean EU data finds its way to the USA.

Remember that you will still also need SCCs (or another adequate safeguard) for transfers of personal data from the UK to non-EEA countries which do not have an Adequacy Decision (such as the US).

It’s expected that the previous SCCs will be repealed with a one-year transition period. So be prepared for a major contract-updating exercise for any SCCs in the old format.

Related services

What other practical steps should you be undertaking going forward?

  • Identify whether you need to appoint an EU Representative:
    • If you don’t have any establishment or permanent base in the EU but you offer goods or services to individuals in the EU or monitor them, then you’ll need to appoint an EU Representative in an EU Member state where you target customers.
    • You appoint the EU Representative in writing and their job will be to liaise with the local supervisory authority, for example if there is a data breach.
    • You don’t need to appoint a Representative, however, if your processing is only occasional or low risk and if it doesn’t include special category data.

     

  • If you do need an EU Representative, Shakespeare Martineau’s membership of the PrivacyRules network means we can help you find the right one.
  •  

  • If you trade in multiple EU countries, work out which EU Supervisory Authority will be your lead Supervisory Authority for all places in the EU. That will allow all your bases in the EU to benefit from the EU’s ‘one-stop shop’ in terms of supervisory purposes under the EU GDPR.
  •  

  • If, however, you don’t have any bases in the EU but you do business there, you probably won’t be able to benefit from the EU’s one-stop shop and will need to think carefully about the implications of the ICO ceasing to be the Supervisory Authority for EU GDPR purposes.
    • If, for example, there’s a data breach affecting the data of EU individuals in multiple EU jurisdictions, you may well need to make notifications to the ICO as well as to every one of those EU Supervisory Authorities where customers’ data has been affected.
    • So, update your data breach notification processes to take this into account.

     

  • Review and update your privacy notice, contracts and other documentation.
    • Refer to the correct version of the GDPR. And you’ll probably need to update the terminology. For example, references to transfers outside of the EEA will need to be changed to transfer out of the UK.
    • Adjust what’s said about national data transfers. Remove references to the Privacy Shield and put in the right wording about SCCs and how you use them.
    • Change references to transfers outside of the EEA to transfers out of the UK.
    • And identify your EU Representative, if you’re required to have one. If you have establishments in the EU, you’ll probably need to list the relevant Supervisory Authorities that apply.
  •  

  • Finally, consider refreshing the training for your staff so they understand how the new regime works.

We can help

For further guidance on how you can prepare for the personal data changes post-Brexit, contact Kim Walker or another member of the Commercial & IP team.

Our Brexit & Beyond hub contains the latest news, articles, briefings, commentary and webinars concerning the legal implications of Brexit, ensuring you have all the information to drive your strategic thinking. Now and in the future.

And our free legal helpline offers bespoke guidance on a range of subjects, from employment and general business matters through to director’s responsibilities, insolvency, restructuring, funding and disputes. We also have a team of experts on hand for any queries on family and private matters too. Available from 10am–12pm Monday to Friday, call 0800 689 4064.

How can we help?

Our expert lawyers are ready to help you with a wide range of legal services, use the search below or call us on: 0330 024 0333

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How to Make the Most of your Board Meeting

Effective minute taking

Effective minute taking is a key responsibility of the company secretary and is definitely a skill that takes time to develop and hone.  A good set of minutes should not only provide a record of discussion and agreed action points but is a conclusive record of the deliberations and decisions taken by the board of directors or a committee of the board.  The minutes form part of the historical records of the company and evidence that the board of directors has fulfilled their legal and fiduciary duties by carefully considering all of the company’s stakeholders and the impact of the board’s decisions. (s. 172 Companies Act 2006).  The importance of effective minute taking can be evidenced in the recent case of PCP v Barclays Bank Plc (2020) whereby the minutes omitted reference to a notable high value transactional agreement.

Whilst there is a no ‘one-size-fits-all’ for minute taking and many companies will adopt a different approach it is key that the fundamentals of good minute taking are applied.  It is therefore important that the chair and the company secretary work closely together to ensure that the final set of minutes are impartial and accurately reflect the business conducted at the meeting before being adopted by the board and signed as the official record of the meeting.

Board Meetings – the new normal

After several months of working from home, the increase in the number of virtual meetings has pushed companies and company secretaries to adopt careful measures in ensuring that private and confidential material can be shared and circulated securely and that directors can attend meetings in a secure virtual environment.  It is important that both the chair and company secretary work collaboratively and proactively to ensure that board meetings consider and discuss key issues and come to final decisions in an efficient and effective manner.

What do I need to consider before holding a virtual meeting?
  • Can you hold a virtual board? – company secretaries should ensure virtual board meetings are not prohibited by any erroneous provisions in the articles of association;
  • Communication with the chair– communication during these times is key. Prior to meetings company secretaries may propose a preparatory call with the chair for a run through of the agenda, items of importance and any additional information.
  • Circulate materials ahead of the scheduled meeting - although deemed common practice, it is crucial that company secretaries complete this task. Directors will then be able to read and consider the board materials and even collaborate beforehand, allowing the chair to focus the meeting on debate and discussion rather than the presentation of key agenda items. The utilisation of dashboards, diligent boards, board portals, informational evaluations etc, to ensure all board members receive information securely are now becoming more common and allow directors to be continuously updated and engaged.
  • Consider the technology – ensure you are leveraging conference technologies (e.g. Zoom, Microsoft Teams, GoToMeeting, etc.) to the board’s advantage.
    Although video conferences may allow members to view physical cues of interest and when to permit other members to speak, the meeting can be disrupted by unstable internet connections. The same can be said for telephone conferences where audio may be clearer but participants can easily talk over one another. Consideration should also be given to address any cyber vulnerabilities which may put the organisation or individual members at risk of hacking or fraud. The board should be cautious of where and how they share sensitive documents e.g. via email on an unprotected server, from a personal device, on a shared/public Wi-Fi, etc. Recommendations are given to utilising board portals as a secure and efficient means of circulating documents.
  • Changes to the agenda – ‘zoom fatigue’ has set in for many following lengthy ‘work-from-home’ periods so the chair and company secretary should consider streamlining the purpose of meetings. Shortened meetings can still be effective where consideration is given to provide time slots for each agenda item, include breaks to improve participant concentration, and time for discussion of key agenda items. This should result in fewer formal board sessions.
During the virtual meeting
  • Ensure the meeting is quorate – the chair or company secretary may ensure all that participants are present or by carrying out roll call, where members present haven’t been made obvious/declared;
  • The chair in control – leadership from the chair is critical for directing effective virtual meetings, ensuring that agenda items are introduced, encouraging participants to mute themselves as items are being presented, as well as allowing all participants the opportunity to ask questions. The chair will need to adapt to these new meeting practices and leverage the capabilities and knowledge of all members to bring about productive discussion, feedback and advice from all participants;
  • ‘Working-from-home’ but not alone – from a corporate governance perspective, each board member should be aware of their surroundings during meetings as family members, service workers, etc. could unknowingly be ‘in attendance’. Therefore, all members should reduce any risk or liability by attending meetings in a separate and quiet room, with no disturbances; they may even opt to participate via headphones; and
  • Minutes/recording – boards may want to consider whether meetings should be recorded as the recording would be deemed an official record and would be required to be maintained in the same way as minutes. Consideration should be given to the usefulness of recordings vs minutes as the latter endeavours to be presented impartially and recordings may not. In respect of minute taking, company secretaries must raise to any participant when an audio connection is faulty affecting their ability to effectively minute take. The company secretary may also ask the chair to summarize any key points and action points after each agenda item to ensure all participants are on the same page.

Over the past few months the COVID-19 pandemic has only highlighted the importance of the company secretary’s role at board and executive level, assisting companies in adapting and implementing strong corporate governance as well as adapting to changing regulatory processes. The new normal, it would appear, is here to stay and will continue to shape corporate governance and regulatory processes at pace.

For further information regarding the company secretarial responsibilities for you or your business please contact Ben Harber or another member of the Company Secretarial team.

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Statement of Changes to the Immigration Rules: a new post-Brexit immigration system

The long-awaited Statement of Changes to the UK Immigration rules was laid before Parliament on 22 October to take effect from 1 December 2020. It provides us with a more definitive guide to the future points-based system in the UK, from 1 January 2021, when freedom of movement between the EU and the UK comes to an end.

Watch our webinar on the practical implications of the UK’s new immigration system when recruiting overseas workers.

The Statement of Changes outlines a number of new changes to the visa system; these highlight new rules for students, graduates and those working in the UK as ‘Skilled Workers’. These new rules are imperative to business as they will affect the way in which employers recruit from the EU from next year.

Here we outline the changes to the immigration requirements.

Visa requirements for Skilled Workers

This category will replace the Tier 2 General and is for individuals coming to the UK to work in a skilled job with a licenced employer known as a sponsor.

  • The same system will apply to both EU and non-EU citizens;
  • The minimum skill threshold is reduced from RQF level 6 (degree) to level 3 (A-Level or equivalent), effectively unlocking this route for a greater number of individuals;
  • The cap on restricted Certificates of Sponsorship is to be suspended;
  • The Resident Labour Market Test (RLMT) advertisement process will be abolished, the requirement for general vacancies shall continue;
  • The cooling off period will be abolished; there is no longer a requirement for a Tier 2 migrant to wait 12 months after their visa has expired or they have left the UK, before applying for a new visa;
  • Reduction of the minimum salary threshold from £30,000 to £25,600 a year;
  • Applicants must score 70 points in total, 50 of which are mandatory as follows;
    • Employer’s sponsorship (20 points);
    • A job at an appropriate skill level (20 points);
    • A knowledge of English equivalent to level B1 or above of the Council of Europe’s common European framework (10 points);
  • To score the remaining 20 points, applicants must receive an annual salary of £25,600 or above.

Where they will be paid less than £25,600, they can achieve the remaining 20 points in one or a combination of the following ways;

  • Salary of £23,040 - £25,599 (10 points)
  • PhD in a subject relevant to the job (10 points)
  • PhD in a science, technology, engineering or mathematics subject relevant to the job (20 points)
  • Job in a shortage occupation (20 points)
Intra-Company Transfer visa

The Tier 2 Intra-Company transfer visa will be re-branded to ‘Intra-Company Transfer’ (ICT).

  • The minimum skill level will remain at RQF level 6 (degree level);
  • There will be no English Language requirement;
  • Applicant must be employed by overseas branch for a minimum period prior to the transfer (12 months in the case of Intra-company transfer or three months in the case of ICT trainees);
  • The ‘high earner salary threshold’ will be reduced from the current level of £120,000 per annum to £73,000 per annum;
  • The 12-month cooling off period will be amended and will allow ICT visas for up to =five years in any six years rolling period. Also, nine years in any 10 year period for high earners;
  • It has now become possible to switch from the ICT route to the Skilled Worker route from within the UK if applicants meet the qualifying requirements.
What is the English language requirement for a visa?
  • Applicants only need to prove the required level of English language to the Home Office on one occasion rather than for each application they make;
  • Applicants who have gained GCSE/A Level or Scottish Higher in English while at school in the UK can rely on this as a proof of their English language ability;
  • Malta is included in the majority English-speaking country list.
What are the new visa rules for students?
  • Maintenance levels are being amended in line with the current home student maintenance loans;
  • The restrictions of working as a postgraduate doctor or dentist in training are being removed. Students and their dependents who are permitted to work under their visa permission will now be allowed to work as a postgraduate doctor or dentist in training, to enable them to work in the NHS;
  • Foreign students wishing to study in the UK for six months or less can now do so on a visit visa;
  • Students wishing to study an English Language course can now do so at an accredited institution in the UK for between six and 11 months;
Changes to the Global Talent route
  • Changes have been made to the criteria for senior appointments to cater for emerging leaders as well as those at a more advanced stage of their career;
  • The definition of the types of academic and research roles that qualify for the route will be expanded;
  • There is a two stage process to include endorsement from an approved body and an application for entry clearance;
EU Settlement Scheme

EEA nationals residing in the UK by 31 December 2020 qualify under the EU settlement Scheme. If however, they relocate next year, an entry clearance application will be required under the new system, being accepted from 1 January 2021.

Keeping your global workforce moving

Tier 2 General and Intra Company Transfer will be closed to new applicants from 1 December 2020. This means existing migrant workers currently in the UK under these routes will need to apply for their extension and meet eligibility requirement rules under the new rules.

It is vital for UK businesses to take measures today to assess and identify their EU workforce as well as plan and implement in preparation for the UK’s new immigration system.

For assistance and advice with securing the status of your EU workers, speak to Tijen Ahmet in our business immigration team.

Our Brexit & Beyond hub contains the latest news, articles, briefings, commentary and webinars concerning the legal implications of Brexit, ensuring that you have all the information to drive your strategic thinking now and in the future

From inspirational SHMA Talks to informative webinars, we also have lots of educational and entertaining content for life and business. Visit SHMA® ON DEMAND.

Our free legal helpline offers bespoke guidance on a range of subjects, from employment and general business matters through to director’s responsibilities, insolvency, restructuring, funding and disputes. We also have a team of experts on hand for any queries on family and private matters too. Available from 10am-12pm Monday to Friday, call 0800 689 4064.

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Brexit: Commercial Contracts and Supply Chains

Time is Running Out – Act Now

The UK leaves the EU customs union and single market on 31 December. This will have profound implications for British businesses and their trading arrangements. Trade negotiations are continuing, but there is no guarantee that a deal will be reached before the end of the year. Even if the UK can secure the “Canada style” deal with the EU it is seeking, it is important to recognise that this does not represent the status quo. Deal or no deal, customs controls will apply to trade with the EU from 1 January and frictionless trade will end.

Many businesses will have been planning for this outcome for some time, implementing Brexit related reviews and addressing issues identified by, for example, amending standard contract documents, or addressing issues specifically when negotiating bespoke contracts.

However, if this is not you, then it is still not too late to act.

What issues do I need to consider when reviewing contractual arrangements or negotiating new contracts?

Brexit clauses

  • Consider including a clause in contracts that triggers some change in the rights and obligations of the parties as a result of the UK leaving the EU customs union and single market. This might give relief from delays caused by the introduction of customs controls, and/or the ability to pass on additional costs incurred.

Force Majeure

  • It is unlikely that a standard force majeure provision will apply to a Brexit related matter. However, the wording of the provision should be checked.

Termination rights

  • Consider including a right to terminate at the end of the current transition period, or a general right to terminate at any time for convenience by giving a reasonably short period of notice.

Prices and delivery responsibilities

  • Check the pricing provisions in the contract. Where selling or buying cross border, are prices inclusive or exclusive of duties and tariffs? Is the position clear?
  • If selling goods to another UK business which incorporates imported components or materials, can any cost increase or additional duties incurred be passed on to the customer?
  • Where buying or selling cross border, which party is responsible for dealing with customs procedures on leaving and entering a country and the associated costs?
  • Review the use of INCOTERMS. Will using the same INCOTERM be appropriate after 31 December?

Time for delivery

  • If you are supplying goods, allow for the possibility of delays arising from customs procedures. This may also be relevant when supplying goods to other UK businesses, where those goods incorporate imported parts or materials.

Personal data transfers

  • If transferring personal data between the UK and EEA member states, consider whether new or updated agreements will be required after 31 December.

Personnel

  • Consider whether the end of freedom of movement will impact on your ability to deliver against contracted timescales.

Contractual references to the EU

  • Check references to the EU and the EEA in contracts. Should these references continue to include the UK after 31 December? Is the position clear? This is likely to be particularly important in licences and distribution agreements, where rights are typically granted in relation to defined territories.
  • As an additional precaution, consider the possibility of Brexit leading to future changes to the composition of the UK. Should a contractual reference to the UK include a future independent Scotland?

Changes in law

  • Is there any legislation which is crucial to the operation of the contract which may be affected following the end of the transition period? Consider what effect a change of law might have in these circumstances and the potential for incurring additional costs.

Dispute Resolution

  • It may become more difficult to enforce English court judgments in EU member states after 31 December. This may result in more complexity, more cost and delay. Consider whether it would be beneficial to include a requirement in contracts to use arbitration.

 

Remember, time is running out. Whatever the outcome of trade negotiations, the UK’s trading relationship with the EU will change fundamentally on 1 January.  It is important to act now.

Contact us

For any advice and guidance on reviewing and amending your contracts in the lead up to 1 January 2021 and beyond, please contact Matthew Sutton on 0121 237 3064, or another member of the commercial team in your local office.
For advice or guidance on any other commercial or legal issue, a member of our team can walk you through everything. Click here to discuss.

How can we help?

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Brexit | what does the future hold for dispute resolution?

The Brexit transition period is rapidly coming to a close, but there are still questions surrounding the future relationship between UK and European law, particularly in the area of international dispute resolution. Looking ahead to 31 December, what could any changes mean for UK businesses and how can they prepare?

What will happen to cross-border judgments after Brexit?

Without an applicable agreed treaty between the UK and the EU, the recognition and enforcement of cross-border judgments will differ considerably due to disparities in the local laws of EU member states. As such, UK businesses would have to seek legal advice in the foreign jurisdiction where the UK judgement is to be enforced.

This could lead to a host of complexities, causing delays, increased costs and general uncertainty regarding the enforcement of a judgment.

Is there a solution?

The 2007 Lugano Convention could be a solution to this issue, maintaining the status quo on the enforcement and recognition of judgments for businesses trading with the EU. Simply put, the convention offers automatic mutual recognition of court judgments, as long as they comply with set procedural formalities.

Having applied to accede to the convention as an independent member, the UK now needs the agreement of all signatories. Although Denmark, Iceland, Norway and Switzerland have given their support, the EU – at present – has not. Only time will tell as to whether this solution will be accessible.

Rejoining the 2005 Hague Convention

An Instrument of Accession has also been deposited by the UK to rejoin the 2005 Hague Convention on Choice of Court Agreements. The Convention requires signatory states to recognise each other’s judgments where disputes have to be litigated in the courts of another signatory state - these are currently the EU, Mexico, Singapore and Montenegro.

However, the Hague Convention does have limits, with contracts where one party is a ‘consumer’, or which contain asymmetrical jurisdiction clauses not falling within the scope of the Convention.

London as a centre for commercial disputes

English law’s reputation for being transparent, fair and impartial has placed London as a global centre for resolving commercial disputes. However, this status isn’t set in stone, with other jurisdictions looking to take over London’s position. Something that will be made easier should the UK/EU deal fail to prioritise the strong judicial cooperation that the country has previously enjoyed.

Now is the time to act

For businesses that have already secured a judgment against an organisation in the EU, now is the time to make the most of the transitional period, with UK judgments still automatically recognised in the EU.

Those which haven’t yet issued court proceedings, or are in the middle of the process, should consider seeking professional advice from a lawyer in the state of intended enforcement. Foreign rules on enforcement may impact the management of UK court proceedings.

As the end of the Brexit transition period approaches, UK businesses should keep an eye on the status of the 2007 Lugano Convention accession and investigate whether their contracts are eligible under the Hague Convention. For organisations that can, it would be prudent to take advantage of the existing EU regime in order to avoid any potential future difficulties.

We can help

If you have obtained a judgment against a person or entity that will have to be enforced in the EU, we can help you to enforce that judgment now or advise you on the implications of delaying enforcement beyond 31 December 2020.

For further guidance on how you can prepare for the changes, contact George Fahey on 0207 264 4523. Alternatively, you can get in touch online or visit our international arbitration lawyers page to learn more.

Our Brexit & Beyond hub contains the latest news, articles, briefings, commentary and webinars concerning the legal implications of Brexit, ensuring that you have all the information to drive your strategic thinking now and in the future

From inspirational SHMA Talks to informative webinars, we also have lots of educational and entertaining content for life and business. Visit SHMA® ON DEMAND.

Our free legal helpline offers bespoke guidance on a range of subjects, from employment and general business matters through to director’s responsibilities, insolvency, restructuring, funding and disputes. We also have a team of experts on hand for any queries on family and private matters too. Available from 10am-12pm Monday to Friday, call 0800 689 4064.