On 31 January 2020, the United Kingdom (‘UK’) left the European Union and not without some commotion. As from that time, the so-called ‘transition period’ started in which period the EU and the UK had to negotiate their future relationship. During this period the so-called ‘Withdrawal Agreement’ applied, under which all applicable EU regulations and legislation remained in force for the UK until 1 January 2021.
As of 1 January 2021, the transition period ended and the Trade and Cooperation Agreement came into effect between the EU and the UK. Since then, companies within the EU and in the UK have been fully occupied with the impact that this agreement has on their business operations. In terms of HR, European companies are primarily concerned with supporting British employees with the immigration issues that they are facing. British companies are dealing with the opposite problem. At the same time, the Netherlands Foreign Investment Agency (NFIA) reports that many British companies are hinting at a departure, or have already departed, to the mainland. What should a Dutch employer take into account with regard to British employees/expats? And what can a British company expect if it is considering setting up business in the Netherlands?
Restriction on free movement of persons
Whereas British expats could previously move freely within the EU, this freedom has been substantially limited following Brexit. As of 1 January 2021, a British expat is no longer considered an EU citizen and therefore needs a valid residence permit or work permit, in principle, to be able to live and work in the Netherlands. There are currently almost 50,000 British citizens employed in the Netherlands.
Specific arrangements are included in the Trade and Cooperation Agreement about the residency of British expats in EU Member States, including the Netherlands. I will summarise the main points below:
- British expats who were living in the Netherlands before 31 January 2020 or during the transition period may continue residing here;
- As of 1 January 2021, all British expats in the Netherlands must apply for a regular residence permit for a definite or indefinite period, even if the British expat already has permanent right of residence. Those expats who were registered in the Personal Records Database (BRP) before 1 August 2020 have received a letter from the Immigration and Naturalisation Service (IND) inviting them to submit their application. British expats who registered after 1 August 2020, must submit an online application themselves;
- New British expats who come to the Netherlands to work after the transition period, thus after 1 January 2021, are regarded as third-country nationals (non-EU citizens) and must have a valid legal basis in order to live and work in the Netherlands;
Although it is in principle up to the British expat to arrange the formalities in the Netherlands regarding his/her residence permit after Brexit, I would also advise the employer to actively participate in this process. In summary, this means that the employer should:
- ask the British expat for a copy of the letter that he/she has received from the IND;
- put this copy and a copy of the British passport of the employee in the personnel file;
- if the British expat has not received a letter: ask him/her to submit an online application as soon as possible;
- check whether the British expat may already have a residence permit and put a copy of this in the personnel file;
- check whether the British expat is correctly registered in the BRP;
- put a copy of the issued residence permit in the personnel file;
Please take into account that the applications for a regular residence permit must have been submitted to the IND before 30 June 2021. For a complete overview, please see the website of the IND.
After 1 January 2021 British expats will have to apply for a work and residence permit (for example on the basis of the highly skilled migrant scheme) or a work permit for persons from outside the European Economic Area. As employer, it is advisable to include a suspensive condition for this process in the employment contract. Based on this condition the start of the employment is suspended until the work permit has been obtained.
Furthermore, I would recommend to include a resolutive condition in the employment contract. Based on this condition the employment contract will come to an automatic end if no valid work permit is obtained.
However, there are some legal complications attached to such a condition. The employer may not (negatively) affect the process of obtaining a work permit and the condition may not be formulated in such a way that it is in conflict with the system governing the right of dismissal. Taking this into account, the employer cannot make any mistakes in the application procedure for the work permit for expats from outside the European Economic Area. If so, the resolutive condition can most likely not be enforced.
With the entry into force of the Trade and Cooperation Agreement between the EU and the UK, Dutch employers must properly check their relationship with the British expat once again. It is important that the employer informs the British expat about, and possibly assists him/her with, the application for a regular residence permit.
Furthermore, the legal status of British expats has also changed since 1 January 2021. They are now considered third-country nationals. It is therefore advisable to incorporate conditions in the employment contract to ensure that the employer does not run any risks if no work permit is obtained for the British expat.
Pieter de Ruiter