Re:locate magazine, summer 2006

Radical Changes to the Rules for Migrant Labour

The Government’s new immigration plans look set to change the nature of the migrant work force, and will have radical implications for the ways in which UK companies employ migrant workers. Julia Onslow-Cole explains.

In March 2006, the Home Office published a paper on changes to the UK immigration system under the Government’s five-year plan announced a year ago. The paper was entitled, Controlling Our Borders: Making Migration Work For Britain, Five Year Strategy For Asylum And Immigration. The new scheme is likely to change the nature of the migrant work force as the government seeks to target young people with entrepreneurial skills and phase out schemes for low skilled migrants who are being replaced by Eastern Europeans. The changes will have a radical impact on the way companies in the UK employ migrant workers.

Immigration has always been a hot political topic but, prior to the last election, Government opinion polls showed that it concerned potential voters more than the war in Iraq. During the pre-election period the Government decided that a new immigration strategy was necessary to present to potential voters.

The Home Office has said the new system will be designed in consultation with interested parties over the next couple of years and will be phased in on a gradual basis. No dates have yet been set for this phased implementation but they are likely to be towards the end of next year. The new system will rely on a new integrated IT system and given the government’s record with IT systems there is great reluctance to announce an implementation date before the IT system is in place.

The aim of the strategy is to simplify the current complicated immigration system, reducing the 50-odd ways in which to come to the UK into five basic tiers. The government also aims to make the system transparent and objective, and to streamline the decision-making process.

Under the current system, the main ways in which companies can bring migrant workers to the UK are either as work permit holders or as highly skilled migrants. A work permit application is made by a potential employer on behalf of the potential migrant employee. The UK employer has to show that the migrant has the requisite academic and/or work experience, and that there is no one in the resident European labour force that can fill the vacancy. Normally the employer would advertise the position, however there are limited categories where the advertising requirement is waived, for example, if it is an intracompany transfer and in-house skills are essential, or there is deemed to be a skills shortage. The highly skilled migrant route is for highly skilled migrants who wish to make individual applications. Unlike those potential employees who come via the work permit route, they are permitted to work for any employer or can be self-employed. Such applications are dealt with on a points based system, where points are awarded for academic achievement, work experience and salary. In addition, there are also sector-based schemes for lower skilled workers.

Under the new Points-Based Scheme, there will be five broad tiers:

Tier 1 will be for the highly skilled migrants. Building on the existing scheme it will offer substantial points for under 27s and under 32s, as the Government is keen to attract younger entrepreneurs with potential.

Tier 2 will be for employer-based applications and the employer will be rated either A or B. A-rated employers who wish to bring in migrants to fill shortage occupations will be able to do so with relative ease, and extra points are given to migrants intending to work for an A-rated employer. A new organisation called the Skills Advisory Body will determine those jobs that are shortage occupations. If the job is not a shortage occupation, the migrant will have to gain additional points from job offers, academic qualifications, earnings and work experience. Workers who join one employer and wish to move jobs must apply again.

Tier 3 is for specific new schemes that will be designed on a needs basis, prompted by the new Skills Advisory Body. The schemes will be quota-based and temporary, and dependents will not be permitted to come to the UK. The Government is expected to announce the abolition of the current Sector Based Scheme and Seasonal Agricultural Workers Scheme, designed to meet the needs of the hotel and catering industries and the agricultural sector, as it believes that workers from Eastern Europe can meet these labour needs.

Tiers 4 and 5 are for students, working holidaymakers and the like.

A key feature of the new system is that applications will be made in British diplomatic posts overseas. Currently applications are decided in the UK, and then individuals make a second application for a visa. By making an application overseas the administrative procedures will be streamlined.

Critics of the new scheme are very concerned that the diplomatic posts will be making these decisions, pointing to their poor record of decision-making, as many migrants make successful appeals against incorrect decisions. The concern is linked to the fact that there will be no appeals under the new system, only an administrative review.

The Government says that the new scheme will be so objective that individuals will be able to see clearly for themselves whether or not they qualify, and no subjective decision making will creep into the system. In practice, it is extremely difficult to see how this could work.

So, for employers taking on highly skilled labour, the new system should be easier and more transparent, but there will be increased burdens on employers. And it will be essential that they maintain a good rating with the Home Office.

The new proposals are at an early stage, and all interested parties should be encouraged to provide their comments to the Home Office. Without doubt migrants contribute hugely to the success of the UK economy and it is essential that the new system is at least as good – if not better – than the one it is replacing.