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Nexia Ebner Stolz


Effects of Brexits on Seconded Employees

A hard Brexit will have direct effects on secondments of employees between German and the United Kingdom. Here's what you need to know.

On 29 March 2019 the dead­line for nego­tia­ti­ons bet­ween the Uni­ted King­dom and the EU on the terms of Bre­xit will expire. The draft with­dra­wal agree­ment col­lap­sed on 15 January 2019 due to oppo­si­tion by the Bri­tish Par­lia­ment. If a with­dra­wal agree­ment can­not be rea­ched in the remai­ning time or the nego­tia­tion period is exten­ded, the Uni­ted King­dom will exit the EU wit­hout any tran­si­tio­nal arran­ge­ments.

Effects of Brexits on Seconded Employees© Unsplash

This would have a direct impact on the second­ment of emp­loyees by a Bri­tish firm to Ger­many, and vice versa. So far, affec­ted EU citi­zens do not need a resi­dence per­mit or a work per­mit in Ger­many or the Uni­ted King­dom. From 30 March 2019 this will be dif­fe­rence from a purely legal stand­po­in­t—the pro­b­lem is that there is curr­ently no way to apply for the per­mit(s). A three-month grace period is curr­ently being dis­cus­sed in Ger­many, so that affec­ted emp­loyees would have until the end of June 2019 to apply for the same kind of resi­dence per­mit and work per­mit that are requi­red for citi­zens of coun­tries out­side the EU.

The social secu­rity sys­tem for secon­ded emp­loyees is also chan­ging. Up to now, an emp­loyee's parti­ci­pa­tion in the social secu­rity sys­tem of his or her coun­try of ori­gin while wor­king abroad has been docu­men­ted by an A1 cer­ti­fi­cate. This avo­ids both a situa­tion where the emp­loyee has no insurance and a situa­tion where the emp­loyee is insu­red twice. If the Uni­ted King­dom lea­ves the EU, the EU-based rules on the coor­di­na­tion of social secu­rity sys­tems will no lon­ger apply. These rules will be replaced by the social secu­rity con­ven­tion ente­red into bet­ween Ger­many and the Uni­ted King­dom in 1960. This will apply unchan­ged and will actually come back into force. The A1 cer­ti­fi­cate will be replaced by a D-UK-101 cer­ti­fi­cate. App­li­ca­ti­ons can and should be filed now.

Alt­hough the social secu­rity con­ven­tion from 1960 in prin­ciple pro­vi­des com­pa­ra­ble pro­tec­tion to that pro­vi­ded by EU law, it is not con­gru­ent in terms of coverage. For example, it only app­lies to the citi­zens them­sel­ves, and does not pro­vide for unem­p­loy­ment insurance. The Ger­man federal govern­ment the­re­fore pre­sen­ted a draft law on tran­si­tio­nal regu­la­ti­ons in the areas of emp­loy­ment, edu­ca­tion, health, social secu­rity and citi­zenship fol­lo­wing the with­dra­wal of the Uni­ted King­dom of Great Bri­tain and Nort­hern Ire­land from the Euro­pean Union. It pro­vi­des for tran­si­tio­nal arran­ge­ments so that Ger­man and Bri­tish natio­nals living and wor­king in the other State at the time of an unre­gu­la­ted Bre­xit will retain their social secu­rity coverage.

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