The Agreement for the United Kingdom to Withdraw from the European Union established a transitional period from the time the agreement entered into force until 31 December 2020, during which time European Union (EU) law continued to be applicable. Upon the termination of the transitional period, the United Kingdom is no longer treated as an EU member state and it is therefore considered a third-party country.
In this regard, by passing Royal Decree-Law 38/2020 (RDL 38/2020) of 29 December, Spain’s government has established measures to adapt the Spanish legal system to some of the consequences of the United Kingdom’s withdrawal from the EU and to provide clarity. This alert addresses the measures that are related to labor and immigration matters.
As of 31 December 2020, United Kingdom citizens who were working on a continuous basis in Spain in professional activities that require such individuals to be citizens of a member state at that time will be allowed to continue performing such work under the same conditions.
As to UK citizens who perform temporary or sporadic professional activities, they may continue to do so for the sole purpose of complying with valid contracts that were executed prior to 1 January 2021.
Workers transferred to Spain prior to 31 December 2020 by a company established in the United Kingdom, as from 1 January 2021, may continue to live and work in Spain without obtaining a prior immigration permit to do so.
However, if it is necessary to extend the duration of the initially planned transfer that was notified to the Spanish labor authority, it will then be necessary to apply for a residence and work permit. In such cases, the processing of permits will have the benefit of being approved without being subject to a labor market test in Spain.
As of 1 January 2021, employees of companies established in the United Kingdom or in Gibraltar that are transferred to Spain will be required to obtain the visas or residence and work permits for foreigners that are stipulated in Spanish legislation, in accordance with the generally established rules (without benefits).
European Workers’ Committees
European Workers’ Committees or alternative information and consultation procedures involving employees or companies in the United Kingdom that have their central management in Spain will continue if they were set up and agreed prior to 1 January 2021.
In order to determine what legislation is applicable with regard to social security, the rules established prior to the date of the United Kingdom’s withdrawal from the EU will continue to apply.
With regard to individuals that are considered employees, RDL 38/2020 establishes that those individuals receiving salaries in either the United Kingdom or Spain from an employer who normally performs its business in one country but sends employees to the other country to work will continue to be subject to the legislation of the first country, provided that the foreseeable duration of such work does not exceed 24 months and that the transferred person is not sent to replace someone else.
RDL 38/2020 came into force on 1 January 2021. Its validity is subject to reciprocity, that is, it requires the United Kingdom or Gibraltar to treat Spaniards there in the same manner as United Kingdom citizens are treated in Spain, and it requires the United Kingdom to apply the measures in the same way as Spain. In this regard, if the United Kingdom fails to afford reciprocity, Spain may suspend the measures. The law’s validity is also subject to the EU reaching specific agreements with the United Kingdom in these areas, in which case the relevant agreement reached by the EU and the United Kingdom will prevail with regard to such measures.
For citizens of EU member states, the periods recorded in the United Kingdom social security system up to 31 December 2020 will be recognized for the purposes of calculating and receiving unemployment benefits or compensation for business closure when the last contributions were made to Spain, in accordance with the regulations on the coordination of social security systems.
Likewise, the periods in which United Kingdom citizens contributed to the social security system of any EU member state, including the United Kingdom, will also be recognized, provided that their right to legally reside in Spain continues.
EU citizens that reside in Spain and travel daily to Gibraltar to work will be eligible for unemployment benefits until 31 December 2022. These individuals will not be required to have paid their last social security contribution in Spain to receive such benefits.
The package of measures provided by RDL 38/2020 allows British citizens that reside in Spain to use their social security cards and obtain medicines with prescriptions issued in the United Kingdom until 30 June 2021.
The foregoing is allowed as long as the United Kingdom provides the same healthcare to Spaniards and to those foreigners that are entitled to receive healthcare at Spain’s expense, according to the same terms and conditions that were applicable prior to 1 January 2021.