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Migrant Workers and Changes in the Law

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Whilst the British economy was thriving, the importance of migrant workers was not challenged. However during this economic downturn, the selection of non-UK workers for domestic jobs has become more controversial, and in this multi-national world, a good system of immigration control was clearly needed. The recent changes to the UK Border Agency’s points based immigration system provides some provisions to ensure that local UK workers have the first chance to apply for vacancies, but what are the legal implications of the new system to an employer?

Checking an employee's right to work in the UK
Since 27 January 1997, UK employers have had a responsibility to check whether their employees were legally entitled to work here. A well controlled and monitored system within the workplace has been necessary to ensure that an employer does not fall foul of the legislation. The recent revision of the laws on preventing illegal migrant working has provided the biggest shake-up of immigration controls for more than 45 years, and now feature a points based system.

The points based system
The system consists of 5 tiers, and each tier has different requirements. The points required may be adjusted by the Government, according to local market and economic conditions,

So what does this mean for employers? Basically, an employer needs a thorough understanding of the new system, have robust internal procedures in place, and a system for keeping abreast of ongoing changes. The points based system has raised the standards that migrant applicants must meet to gain permission to work in the UK, most notably within certain categories in Tiers 1 and 2.


Hiring skilled workers from abroad
Tier 1 is divided into 4 sub-categories including Tier 1 General, which replaces the Highly Skilled Migrant Programme. The other sub-categories are Entrepreneur, Investor and Post-study. The intention is to permit entry to those migrants who have most to contribute to the UK’s economy.

From 31 March 2009, migrants wishing to enter the UK under Tier 1 General must, among other requirements, have been educated to the equivalent of UK Masters Degree and have earned a salary of £20,000 within 12 consecutive months out of the previous 15 months. Migrants applying under Tier 1 are exempt from the need to be sponsored by a UK company.

Tier 2 effectively replaces the old work permit system. An employer seeking to recruit under Tier 2 (General) must be able to show that they have attempted but failed to find a resident worker. In order to demonstrate this, the job must be advertised in the manner and media set out in the Codes of Practice. In addition, the employer must apply to the Home Office to register as a licensed sponsor, so that they can provide a Certificate of Sponsorship to the applicant. Certain specific duties are imposed upon licensed sponsors.

Sports people and Ministers of Religion come under Tier 2 in specialist sub-sections.

Duties of the Sponsor
Although there are clear benefits to the points based system, there is nonetheless an administrative burden on companies who have to apply for a Sponsorship Licence. The general duties include record keeping and reporting, as well as legal compliance and cooperation with the UK Border Agency. This will be easier for those with established HR functions rather than less structured or smaller companies.

In terms of payroll and related processes, there are certain sponsor duties that must be carefully followed. The Home Office will look at the internal processes of the company in detail to make sure that they are able to carry out their duties properly

Whether the company is big or small, however, it must be a genuine organisation or a sole trader operating legally in the UK. The history and background of the company and key personnel is reviewed by the Home Office.

“Shortage occupations”
The Migration Advisory Committee is tasked with designating “shortage occupations”. This list is reviewed regularly – for example, the MAC has just recommended the suspension of consultants in geriatric medicine from the shortage occupation lists, whilst electricity generation engineers have been added.

Penalties for Employers
Both civil and criminal penalties may apply. The civil penalty for an employer is a maximum of a £10,000 fine per illegal worker. However knowing that a worker is illegal constitutes a criminal offence and can lead to an unlimited fine or up to two years’ imprisonment.

Assessment of the new system
So far, general feedback on the new system has been largely positive.

A key advantage for companies who use (or plan to use) a significant amount of immigrant labour is the ability to issue Certificates as a Licensed Sponsor, rather than waiting for work permit applications to come. This can result in significant time-savings. The Sponsorship Licence issued for a migrant worker is actually just a "virtual document" (a unique reference number). Although it might sound complicated, this process is far less time-consuming than going through a work permit application process.

Only time will tell how far the points based system will go to meet the needs of UK employers.


About Cheyney Goulding LLP

Cheyney Goulding LLP is a firm of solicitors based in Guildford, Surrey and London, with specific ‘City’ calibre expertise in business law, dispute resolution, employment and property for companies, partnerships, charities and individuals. Cheyney Goulding’s clients are drawn from large international public companies that use the firm for particular areas of expertise, to small and medium sized businesses and individuals. Whoever the client, great emphasis is placed on developing good personal relationships, and understanding the needs of the client. The corporate and commercial team draft all forms of commercial agreements, handle mergers, acquisitions, refinancing and restructuring. Property matters range from debt collection to cases in the House of Lords and European Court, and the firm regularly advises and acts on employment law issues.

About Karen Grant
Karen Grant is a solicitor at Cheyney Goulding LLP who specialises in all aspects of employment law. She advises large international businesses and small to medium sized enterprises providing employment and commercial advice to suit the needs of the firm’s wide-ranging client base. She also advises clients on an individual basis offering a unique personal service with a commitment to providing practical advice.
For more information, please visit www.cheyneygoulding.co.uk