Effects of Brexits on Seconded Employees

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.

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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.