On 24 August 2022 the Migration Advisory Committee (MAC) was commissioned to review the shortage occupation list (SOL) for sponsoring skilled workers. The MAC is expected to make a call for evidence to employers and other stakeholders over the coming months, with their recommendations due to be incorporated into Immigration Rules sometime from Autumn 2023.

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The UK Shortage Occupation List (SOL) is the official list of the skilled occupations that the Government accepts currently face staff shortages in the UK. When employers recruit foreign nationals for a role listed on the SOL, they benefit from certain relaxations of the normal Skilled Worker visa requirements aimed at making it easier to fill those shortages.

The commissioning letter to the MAC was published on 1 September 2022 here. The MAC’s response can be found here.

What has the MAC been asked to report on?

The MAC has been asked to consider three main issues:

• The salary requirement: Currently, the salary requirement for jobs included on the SOL is the higher of either the going rate for the job, less a 20% discount, or £20,480 (subject to an absolute minimum of £10.10 per hour). The MAC has been asked to report on whether the 20% discount to the going rate should be removed. This would mean that the going rate for jobs on the SOL would be in line with those not on the SOL and the 20% reduction would only apply to the general salary threshold for sponsoring a Skilled Worker (from £25,600 to £20,480).
• The existing SOL jobs: the MAC has been asked to review all the jobs and consider whether they still fulfil the requirements to remain on the SOL. The reason given for this is that being on the SOL should only be a time-bound strategy to address labour shortages rather than having sectors permanently relying on migration, which could make labour shortages entrenched.
• Adding new jobs to the SOL: The MAC has also been asked to consider whether any other roles should now be added to the SOL. Again, this has been caveated to ensure that the MAC considers alternatives to migration first to avoid the SOL being the first port of call for employers seeking to fill labour shortages instead of investing in addressing the issues that cause the shortages in their sectors, such as lack of career progression or training opportunities for domestic workers. The MAC has been asked to specify which roles it recommends adding at Regulated Qualifications Framework (RQF) level 6 (i.e. degree level equivalent) and/or RQF levels 3-5 (i.e. A-level and above). The commissioning letter cautions against recommending roles below RQF level 3. Currently, the only role below RQF 3 on the SOL is Care workers and home carers in the Health and Care Sector; this was added due to the exceptional circumstances caused by the pandemic. The letter makes it clear that the Government will only entertain including any other role below RQF 3 if it accepts there are truly exceptional circumstances for doing so.

What are the timelines for the review?

The MAC has been asked to report back by the end of March 2023 with a view to implementing any changes in Autumn 2023. It has also been asked to base its recommendations on the more recent 2020 Standard Occupational Classification (SOC) Code system if possible, moving away from the 2010 system, which is now out of date.

The MAC has accepted the commission; however, there are currently issues with how some of the new SOC 2020 occupational codes have been applied to the datasets the MAC would use to inform its recommendations on the SOL. The MAC has suggested two alternatives:

• To commence the review now using SOC 2010; this would mean that the occupational classification data would be out of date. The MAC views this as being problematic as the labour market has changed significantly as pandemic-related restrictions have fallen away; or
• To delay the start of the review until the Office for National Statistics (ONS) has investigated the data issue that has been identified with SOC 2020 and has provided an update on its resolution. The MAC could then decide on whether to commence the commission once the issues are fully resolved, or to proceed using the SOC 2010 system. The MAC considers this alternative is preferable as it would provide the potential for more recent labour market data to be used in the review.

It seems, therefore, unlikely that the SOL review will be ready by the end of March 2023 and that any changes will be ready to be implemented in the October 2023 updates. Depending on which option is agreed on, the MAC has asked for more time but intends to report back as close to Spring 2023 as possible.

The MAC also intends to respond to the rest of the issues raised in the commissioning letter closer to the launch of their Call for Evidence.

What should employers consider in light of the review?

Employers should start considering how to engage with MAC’s Call for Evidence.

• If there are jobs that that they think should be added to the SOL, employers should start preparing the relevant evidence to show the shortage in resident labour and the need for migrant workers. The evidence should also provide details of the employer’s medium to long-term strategy to address the shortage outside of relying on the immigration system.

   

• If there are jobs already on the SOL that employers think should not be removed, they should start preparing evidence to put to the MAC to show why the need for migrant workers continues and how keeping these jobs in the SOL fits in their strategy to address the shortage outside of relying on the immigration system.

If the MAC recommends scrapping the 20% reduction of the going rate for SOL jobs and this recommendation is adopted, employers will potentially have to increase salaries to comply with 100% of the going rate for each SOL job (or the SOL salary threshold, whichever is higher). Therefore, employers should plan for the possibility of this happening in the next couple of years, depending on when the MAC recommendations are released.

We are holding our next Immigration Law Academy on 9 and 10 November 2022, which will include detailed training on the Skilled Worker route. For further information and to book, click here. If you have any specific queries about the SOL review or the Skilled Worker visa, please get in touch with a member of our Immigration Team.

Related Item(s): Immigration, Global Mobility

Author(s)/Speaker(s): Andrew Osborne, Naomi Hanrahan-Soar, Despina Stoimenidi,

When businesses run into financial difficulties and need to reduce costs, the knee-jerk reaction is often to consider the scope for job cuts. But redundancies are not a cheap option and, if mistakes are made in the way redundancies are handled, further costs may be incurred on account of tribunal claims.

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Other drawbacks include the loss of valuable skills and experience and the negative impact on the morale of the staff that are retained.

Employers should therefore think creatively and look at other alternatives that may better suit the needs of their business. This Inbrief summarises some of the options and examines how to avoid falling foul of the legal procedures and obligations that might come into play.

Please click ‘download files’ to view the full inbrief

Inside

• Changing terms and conditions

• Pension scheme changes

• Lay-off and short-time working

• Reducing use of contract workers

• Discretionary benefits

• Redeployment, secondment and sabbaticals

• Recruitment freezes or deferrals

• Flexible working

Changing terms and conditions

Perhaps the most obvious way to reduce business costs without resorting to dismissals is to adjust employees’ contractual entitlements — for example, an across-the-board pay cut.

The legal starting point is that employees’ pay, benefits and working hours will most likely be express terms of the contract of employment. Even where terms of this nature are not expressly set out in writing, they may be implied into the contract by “custom and practice”. In addition, terms may sometimes be incorporated into individual contracts from sources such as company policies or work rules.

Any significant change to working arrangements is therefore likely to require the variation of employees’ contracts of employment. Depending on the circumstances, even a pay freeze, for example, or a restriction of overtime working might entail changes to contractual terms and conditions.

Changing terms and conditions is fraught with legal dangers and employers should proceed carefully and generally take legal advice before embarking on such a course. In outline, these are the main options:

• changes allowed by the contract

• variation by mutual agreement

• unilateral imposition of new terms

• terminating employees’ contracts and re-engaging them on new terms

Changes permitted by contract

The best scenario for the employer is that the change it is proposing is authorised by the contract of employment. This can arise in different ways. The contractual term in question may, for example, be drafted sufficiently broadly to accommodate the change.

Alternatively, the contract may include a “flexibility clause” – an express right for the employer to implement changes. This could either be a specific clause covering the proposed change or a general power for the employer to vary the terms of the contract.

The presence of a flexibility clause does not necessarily mean the employer can proceed with impunity. Clauses of this type are interpreted restrictively by courts and tribunals and any ambiguity will be resolved against the employer.

In addition, the way in which a flexibility clause can be operated may be restricted by general implied terms of the employment contract – in particular, the implied duty of mutual trust and confidence. This may, for example, require the employer to give staff reasonable notice of any changes.

In organisations that are unionised, changes to terms and conditions are usually negotiated with the relevant trade union. This is another situation in which the changes are likely to be permitted by individual employment contracts, because there is normally a clause catering for collectively agreed changes to be automatically incorporated into the contract. Nonetheless, the union will generally obtain employees’ agreement before accepting the employer’s proposed changes.

Variation by agreement

Where the employer has no right to impose unilateral changes, clearly the best route is to obtain employees’ consent. Faced with the option of agreeing detrimental changes or potentially being made redundant, many employees are likely to be amenable albeit reluctantly.

Full and effective communication and consultation, so that employees fully understand the business needs behind difficult decisions, is a crucial factor in securing agreement. This can be done via staff briefings and meetings but it is best also to offer individual consultation on a one-to-one basis.

It is essential to obtain employees’ individual written agreement to changes, in order to avoid future disputes.

Unilaterally imposing changes

What should an employer do in respect of employees who, following consultation, still refuse to agree to the change required? One option is simply to announce that the change will be implemented from a set date.

This is a risky strategy from a legal perspective. Imposing the change as a fait accompli will amount to a breach of contract by the employer. This runs the risk that employees may:

• continue to work in accordance with the changed terms, but under protest — reserving the right to sue for breach of contract and/or bring a claim for unlawful deduction from wages

• resign and claim constructive dismissal

• refuse point-blank to accept the new terms

In the third scenario the employer would have little option but to dismiss, potentially giving rise to tribunal claims for unfair dismissal from employees who have at least the two years’ service.

The best outcome for employers adopting this type of approach is that employees would simply acquiesce in the new working arrangements and go along with them. After a period of time, the legal position would be that such employees had impliedly agreed to the variation by their conduct.

Dismissal and re-engagement

Generally speaking, a better way to proceed where employees’ agreement to contractual changes is not forthcoming is to terminate their existing employment contracts – giving the required statutory or contractual notice – and offer to re-engage them on new contracts containing the revised terms.

This may seem like a “nuclear option”, but it at least avoids the risk of employees suing for breach of contract. Because the employment contract is lawfully terminated with notice, the employer is not in breach.

This approach is often called “fire and rehire” and has come in for some criticism recently – but it is a lawful step as an alternative to attempting to unilaterally impose changes. Acas has produced guidance on fire and rehire practices which emphasises the importance of employers first exploring other all options (such as obtaining agreement instead) and consulting their employees in a genuine and meaningful way.

Employees with at least two years’ service will, of course, be entitled to claim unfair dismissal. However, the employer can defend such claims by showing it had a “substantial reason” for dismissal – namely, its pressing business need to introduce the changes in question. The employer would argue that it adopted a fair procedure by consulting fully over its proposals and acted reasonably in the circumstances.

Importantly, the employer’s legal duty to consult collectively may be triggered in these circumstances. A proposal to dismiss and rehire in the context of changes to terms and conditions counts as ‘redundancy’ for collective consultation purposes. Accordingly, if 20 or more employees will be dismissed within a 90-day period, the employer must consult with the recognised trade union if there is one, or elected employee representatives otherwise. (See our Inbrief on collective redundancies.)

Pension scheme changes

Another option for employers that may appear attractive is to change its pension arrangements.

Employers should bear in mind that most changes will require them to consult with employee representatives, under special consultation requirements applying to pension schemes (although some smaller schemes are exempted). The process is broadly similar to the collective redundancy consultation process, but the obligation to consult is not restricted to changes affecting a particular number of employees. The consultation period must last at least 60 days.

Lay-off and short-time working

Employers looking for alternatives to declaring redundancies may consider laying staff off temporarily or reducing their working week. A lay-off is generally understood to mean an employer providing employees with no work – nor pay – for a week or more. Short-time working occurs when an employee works only part of a week and receives proportionately reduced pay.

If the employer has no contractual authority to impose a lay-off or short-time working, the considerations in relation to changing terms and conditions described above will apply. In particular, unless employees’ express and informed consent is obtained, the employer will potentially face claims for unlawful deduction from wages, breach of contract and constructive dismissal.

There is specific legislation governing temporary lay-offs and short-time working, but it is complex and little-used in practice. It provides a right for employees who have been laid off or kept on short time for four or more consecutive weeks or six weeks in any 13-week period to claim a redundancy payment in certain circumstances. The scheme only applies where the contract of employment allows for lay-off/short-time working without pay.

Finally, there is a very modest statutory wage protection scheme for employees who are laid off without pay. They can claim a ‘guarantee payment’ for days on which they would normally be required to work, but the maximum is only £29.00 per day and entitlement is limited to five days in any three-month period.

Reducing use of contract workers

Dispensing with the services of casual workers, agency staff and self-employed consultants may be a relatively low-risk way to reduce employment costs without making ‘permanent’ staff redundant. The employment status of such individuals should, however, be carefully assessed in case they legally qualify as ‘employees’ with statutory rights such as statutory redundancy pay and unfair dismissal.

Employers should also be careful when terminating part-time or fixed-term staff. They are protected from less favourable treatment in comparison to (respectively) full-time and permanent colleagues, unless it can be objectively justified by the employer.

Discretionary benefits

Employment contracts often describe bonuses and other benefits as being non-contractual or ‘discretionary’, implying that the employer is entitled to withhold or reduce them. Such contractual provisions do not, however, give the employer carte blanche or mean they are immune from legal challenge.

For example, an employer should be in a position to demonstrate that it has not exercised a contractual discretion arbitrarily or irrationally. Alternatively, employees may be able to argue that they have a legitimate expectation of a bonus or other benefit as a result of custom and practice, giving rise to an implied contractual right.

Redeployment, secondment and sabbaticals

A good way of retaining key skills and avoiding redundancies is to redeploy affected staff elsewhere within the organisation wherever possible, or alternatively arrange for them to be seconded to other companies. Once again, this will need to be done with the employee’s consent in the absence of an express right to redeploy or second in the contract of employment.

A sabbatical, or career-break, is not a legal concept, but simply time away from work. Many employers operate discretionary schemes, which can be paid, part-paid or unpaid. Staff who can afford time off work and who are perhaps seeking an opportunity to change their lifestyle are offered an extended period of leave, with the promise of a job on their return. Continuity of employment is generally preserved during a sabbatical, for both statutory and contractual purposes.

It would be unusual for a sabbatical or career-break policy to provide for the employer unilaterally to enforce their use, as this would effectively amount to a right to lay off without pay (see above).

Recruitment freezes or deferrals

A freeze on recruitment is an obvious and straightforward way of reducing overheads without fear of legal consequences, especially in industries with high rates of staff turnover. Recruitment deferrals may be another option, where already planned recruitment is deferred or job offers are withdrawn.

Employers do need to proceed with some caution if they already have committed themselves to a particular start date. A prospective employee may be entitled to claim some notice pay if a job offer is withdrawn shortly before they were due to start work, if they are given less than the notice agreed under the new contract. The rules on collective consultation and HR1 forms also apply to new employees who have signed a contract but not started work yet. It is important to bear in mind that withdrawn job offers may cause an employer to reach the collective consultation threshold of 20 or more dismissals within 30 days – either because 20 or more offers are withdrawn within a short space of time, or (more likely) when these are added together with other redundancy dismissals within a 30 day period.

Flexible working

Introducing part-time working or job-sharing can sometimes be a feasible way of reducing costs. The incentive of improved work-life balance may mean some employees would welcome the opportunity to enter into such arrangements. If so, the employer should seek their consent and the details of the new working regime should be clearly set out in writing.

Another cost-saving option may be to encourage employees to work flexibly or remotely, for example at home. This could be full-time homeworking, or hybrid working where employees only attend the office for part of each week. Agreements to allow employees to work from home could also include asking them to agree to a lower salary in recognition of the fact they may be able to live in a cheaper area or avoid commuting costs. Similar issues arise here as in relation to other changes to terms and conditions (see above). Where employees’ consent is not forthcoming, the employer can seek to rely on any flexibility clauses in the contract or consider terminating and re-engaging on new terms as a final resort.

Practical issues to consider include: monitoring and recording core hours; access to IT systems and equipment; and health and safety.

Immigration issues

Where employers are considering redundancies, or alternatives such as lay-offs or salary reductions), they should assess whether this has any effect on the immigration status of any of the employees affected. Any of them who holds a sponsored visa will have reporting requirements that are likely to be triggered, which may then have knock-on implications for whether they can keep their visa or not. Lewis Silkin’s dedicated immigration team can assist you in navigating this part of the process.

Type: Inbrief

Related Item(s): Employment, Employment, Redundancy & Restructuring, Redundancies, restructuring and insolvency

Author(s)/Speaker(s): Russell Brimelow,

Attachment: Reducing business costs alternatives to redundancy

UK employers can engage an Identity Service Provider (IDSP) to assist with carrying out the digital identity verification aspect of a right to work check for prospective employees with a valid British or Irish passport. In this article we look at how the arrangements are working initially in practice. We also outline some of the considerations for employers, including looking ahead to the end of adjusted right to work checks on 30 September 2022.

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What is the scope for using an IDSP to perform a compliant right to work check?

IDSPs provide identity document validation technology (IDVT) that can be used to carry out the digital identity verification element of a compliant right to work check for holders of valid British and Irish passports and passport cards only.

Employers retain responsibility for ensuring right to work check compliance and cannot outsource this to an IDSP. An employer’s guide to right to work checks, which is the official guidance issued by the Home Office, does however state that if an employer uses a ‘certified’ IDSP, the Home Office will accept that the IDSP is able to carry out digital identity verification to the government’s recommended minimum of a Medium Level of Confidence. In practice using a certified IDSP minimises the risk the Home Office may find the IDSP’s technology is not robust enough to provide a reliable identity verification.

Crucially, the employer must check that the details of the IDVT check output (which is produced in the form of a report with the prospective employee’s passport details and image included) are consistent with the appearance of the prospective employee who is presenting for work. This is not likely to be included within the IDSP’s workflow, necessitating the production of a separate record to confirm the visual check has taken place. This could be in the form of an endorsement on the IDVT output, or by creating a separate record in a format that cannot subsequently be altered.

The visual check record should:

• Confirm that the appearance of the prospective employee is consistent with the details and image in the IDVT output;

• Identify who carried out the visual check, either by live video link or in person (the checker must be a direct employee of the employer); and

• Confirm the date of the visual check (as this will be the date the right to work check will be considered complete).

Prospective employees can opt out of using an IDSP, even if they hold a valid British or Irish passport and must not be treated less favourably if they do. They should be offered a manual right to work check instead.

How is a digital right to work check carried out using an IDSP?

Broadly, the process is as follows:

• The individual uploads a copy of their passport/passport card and an image of themselves to the IDSP’s app/portal;

• The IDSP returns a report on the authenticity of the document, which is shared with the employer;

• The employer retains a clear copy of the report in a format that cannot be altered;

• The employer satisfies themselves that the photo and the biographic details of the person presenting for work are consistent with the details in the report and makes a record of having completed this check; and

• The employer checks on any inconsistencies on names or other details and obtains evidence that resolves these.

Evidence of the right to work check must be retained, in a format that cannot be altered, for the duration of the employment plus two years.

Who are the certified IDSPs?

Although the enabling legislation for IDSP use has been in place since 6 April 2022, there was an initial delay in IDSPs becoming certified. Since the first IDSP was certified in June 2022, further providers have been added to the list maintained by the Department for Digital, Culture, Media and Sport on an ad hoc basis.

Some of the certified IDSPs provide their services direct to employers. At least one, HooYu, offers its product indirectly through two partners, Vetting.com and Veremark.

What services do the IDSPs offer?

Many of the IDSPs offer a range of services beyond IDVT for right to work checks, such as know your customer software and other business process technology products. What other products may be suitable for a business will depend on that business’s industry sector and other profile characteristics.

How are the services priced?

The various IDSPs use different pricing models, which makes comparing them complex.

Some providers have an account setup cost and per user licence fees, some use pre-paid bundles of transactions with credits expiring after a fixed period of time.

Employers will need to make cost calculations based on forecast volume usage. This will mean deciding the point at which the IDSP will be used in the right to work check process for prospective employees, and whether to use their systems for repeat checks.

At one end of the spectrum, IDVT provided through an IDSP could be used only once a job candidate has been identified as holding a valid British or Irish passport. On the other end, the HR portal offered by an IDSP could be used to manage the right to work records for all prospective job candidates and employees requiring repeat right to work checks.

What should employers be doing to prepare for the end of adjusted right to work checks?

Even if employers opt to use an IDSP, they will still need to put processes back in place to carry out compliant manual right to work checks after the COVID-19 adjusted right to work check process ends on 30 September 2022. This is because IDSPs only provide products to carry out compliant checks on valid British and Irish passports (including Irish passport cards).

From 1 October 2022, aside from any documents that have been verified using an IDSP, an employer must review the original documents that are contained in List A or List B of the Home Office’s current right to work checklist in order to obtain a statutory excuse against liability for an illegal working civil penalty (which can be up to £20,000 per worker). Note that the checklist was significantly updated from 6 April 2022 to remove biometric residence permits (BRPs), biometric residence cards (BRCs) and frontier worker permits from the lists of acceptable documents for manual checks. Holders of these documents must have their right to work checked using the Home Office’s online system, which is separate from IDVT and free for employers to use.

It remains to be seen whether there will be another last-minute request from businesses to further extend the adjusted process, but employers should plan for a return to compliant manual checks. This will mean ensuring there are processes in place to receive, review and return original evidence of right to work. It will however still be possible for a compliant manual check to be carried out with the employee or prospective employee present by live video link rather than in person.

Tips for employers considering using an IDSP

• Be aware that using an IDSP will not completely remove the need to carry out manual right to work checks, so a plan must be in place to carry out fully compliant manual right to work checks from 1 October 2022, taking into account the requirement for the person carrying out the check to handle original documents;

• Consider whether and how the use of an IDSP fits into the business’s overall strategy covering IT systems for onboarding staff, managing right to work check compliance and minimising the risk of identity document fraud;

• Use a robust procurement process to determine the scope of services desired and to select a vendor – this is likely to require budgetary sign-off from senior level stakeholders and engagement across the IT and HR functions;

• Take into account that IDSPs currently can only contribute to compliant right to work checks for valid British and Irish passport holders, although the scope of their available services (and the associated cost per transaction) may extend considerably beyond this;

• Ask whether the IDSP has capability to build the visual check element of the process into their product’s workflow, or make sure this is incorporated into the business’s overall process for checks using an IDSP – some providers may be able to achieve this using one of their other products (e.g. e-signature), but at an additional cost;

• Consider the current composition of the business’s workforce and future recruitment plans when forecasting the likely volume of checks for valid British and Irish passport holders over the term of the agreement with the IDSP, and comparing the overall cost of each IDSP contract;

• Consider the timing of setting up commercial arrangements with an IDSP, taking into account that the list of certified IDSPs is still expanding and competitive providers may not yet have finalised their accreditation;

• Consider the pros and cons of using a trial to evaluate a provider, including whether to run full manual checks (or adjusted manual checks to 30 September 2022) in parallel during the trial period; and

• Enquire about the scope to negotiate on pricing and contract term as some of the initial providers have indicated a degree of flexibility on this.

If you have any queries about IDSPs or carrying out right to work checks, please get in touch with a member of our Immigration Team.

Related Item(s): Immigration

Author(s)/Speaker(s): Supinder Singh Sian, Naomi Hanrahan-Soar, Kathryn Denyer,

The new Scale-up route launches on 22 August 2022. Unusual features of the route include that sponsorship is available only to hyper-growth businesses, and that after the first six months, Scale-up visas cease to be sponsored. The latter aspect means that employers of ‘unsponsored’ Scale-up visa holders will benefit from understanding the requirements for maintaining status under the route.

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An overview of the Scale-up route is included in our earlier article.

Sponsorship under the Scale-up route

According to the ScaleUp Institute’s analysis of data compiled by the Office for National Statistics, in 2019 (the most recent year for which data is available), there were 33,445 scale-up businesses in the UK.

Although the current number of scale-up businesses may have dropped due to adverse trading conditions during the pandemic, there is a significant pool of eligible employers that may choose to become a Scale-up sponsor.

A sponsor licence under the Scale-up route is only available to scale-up businesses with an annualised turnover or staffing growth of at least 20 percent for the last three years before application. They also must have had at least ten employees at the start of the three-year period. Further details of the sponsorship process and criteria, including supporting documentation, will be made available at launch. Please contact us for advice if you would like an assessment of whether your business qualifies.

Advantages of the Scale-up route for sponsors

Some advantages of using the Scale-up route from the sponsor’s perspective include that there is:

• No Immigration Skills Charge (ISC), which represents a saving of £5,000 over a five-year period in comparison to Skilled Worker or Senior or Specialist Worker;

• Fast-tracked processing of applications; and

• Reduced migrant administration after the first six months.

Disadvantages of the Scale-up route for sponsors

Some potential disadvantages of the route include the following:

• A Scale-up sponsor will continue to have sponsor licence obligations during the life of the licence even it is not actively sponsoring workers;

• A Scale-up visa holder is not ‘tied’ to the sponsor after the initial six months, which may reduce employee retention;

• The employer must pay Scale-up visa holders under PAYE on a monthly basis (no other pattern) for them to qualify for extension and settlement – this position seems to be unduly restrictive and may be reviewed by the Home Office at a later date;

• The minimum salary threshold for the Scale-up route is £33,000, which is higher than for Skilled Worker; and

• There is potential for a Scale-up visa holder to be ineligible to extend and/or settle under the route if they do not comply with the salary requirements of it – see further commentary below.

Rationale for the structuring of the Scale-up visa

The Scale-up route has been structured to aim to provide a cheaper, faster and less administratively burdensome option for scale-up businesses. It also aims to ameliorate three of the most serious historical issues that arose with previous schemes for highly skilled workers, such as the Highly Skilled Migrant Programme and Tier 1 General.

Firstly, unsponsored entry into the UK labour market comes with the risk that a migrant may encounter ‘unemployment scarring’ if they have a period of unemployment after arrival. If this happens, they may find it increasingly hard to find a job, or may only be able to secure a comparatively less well-paid job, rendering them ineligible to meet any earnings criteria for extension or settlement in their route. The Scale-up route requires a job offer for at least six months, which reduces the possibility of unemployment scarring.

Secondly, the salary requirement of £33,000 under the Scale-up visa route aims to minimise the risk that visa holders in this category will occupy lower-skilled positions in the labour market. It is possible that some workers could still end up working for lower-skilled and lower-paid jobs for multiple employers, and this is something the Home Office will be monitoring.

Thirdly, the previous schemes were subject to the risk of visa holders fraudulently reporting self-employed earnings in order to meet earnings criteria for extension and settlement. This is addressed under the Scale-up route through the requirement for qualifying earnings to be via PAYE only.

If this route proves to be successful, it may pave the way for more liberal sponsored to unsponsored schemes to emerge.

Issues for non-sponsoring employers

Once a Scale-up worker has been employed by their sponsor for at least six months, they may work for any employer in any occupation without the need for further sponsorship.

Employing a Scale-up visa holder may at first appear straightforward to non-sponsoring employers, however an extension or settlement application in this category may be refused if an individual’s PAYE earnings (from all sources of employment) are insufficient. This may include if their earnings are impacted by periods of unpaid absence for reasons other than statutory maternity, paternity, parental/shared parental or adoption leave, or sick leave.

Employers will therefore need to decide whether, and how closely, to advise and/or monitor their employees’ earnings and absences to ensure they will qualify for an extension and ILR. Although compliance will be a responsibility for the individual, the refusal of an extension or settlement application will have an impact on their ability to continue working for their employer. In this event, an employer may need to consider sponsoring the employee under an alternative route such as Skilled Worker, potentially at short notice. If sponsorship is not possible, the employment may need to end if the person cannot secure immigration permission in an appropriate route.

If you have any queries about the Scale-up route, please get in touch with a member of our Immigration Team.

Related Item(s): Immigration, Technology & Communications

Author(s)/Speaker(s): Andrew Osborne, Supinder Singh Sian, Li Xiang, Naomi Hanrahan-Soar,

The Home Office has provided updated processing information in a communication to stakeholders on 12 August 2022. Developments include the reinstatement of priority and super priority visa services in work and study routes. The capacity of the pre-licence priority service for new sponsor licence applications has also been expanded.

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Priority and super priority entry clearance services

Priority visa (PV) and super priority visa (SPV) services have been reinstated in existing overseas locations for new work and study route entry clearance applications submitted from 12 August 2022.

PV and SPV services continue to be available at reduced capacity for visit visa applications, to enable the Home Office to work towards bringing processing in this route back within the normal 3-week global average as soon as possible.

PV and SPV services must be paid for separately for the main applicant and each accompanying family member if a family group wishes to receive a decision on all the applications at the same time.

It is not possible for an existing application to be ‘upgraded’ if the applicant has already booked or attended their appointment to submit their biometrics (facial image and fingerprints) at a visa application centre. Applicants may request expedited processing via the visa application centre or UK Visas and Immigration, however this is considered on a case-by-case basis and allowed only where the Home Office accepts there are extremely compassionate or compelling circumstances.

An existing application can be withdrawn and a fresh application submitted using a priority service if this is available in the location of submission. Caution should however be exercised when considering this option as it will mean the resubmission of biometrics and fees will not be refunded in all cases. The eligibility requirements for the visa will also have to be re-checked before resubmission, which may involve issuing a new certificate of sponsorship and updating supporting evidence.

PV and SPV services have not yet been reinstated for entry clearance in the following routes:

• Innovator

• Start-up

• High Potential Individual

• Family

Applications made using the UK Immigration: ID Check app are also ineligible to use the services.

Revised standard entry clearance processing times

The current global average entry clearance processing times are as follows:

• Work visas: 4 weeks (down from 5 weeks)

• Student visas: 3 weeks

• Visit visas: 7 weeks (up from 6 weeks)

• Family visas: 24 weeks

The Home Office advises that applicants should apply as early as possible to maximise the likelihood of meeting their intended travel date.

Processing times for entry clearance applications are revised weekly at Visa decision waiting times: applications outside the UK.

Expansion of pre-licence priority service slots

Since 1 August 2022, the Home Office has expanded the number of pre-licence priority service slots from 10 per day to 30. This allows businesses with an outstanding sponsor licence application to have it processed within 10 working days of paying a £500 priority service fee.

The standard processing time for these applications is 8 weeks, however processing can take longer if the Home Office asks for additional information or carries out an onsite visit to the business.

If you have any queries about the matters discussed in this article, please get in touch with a member of our Immigration Team.

Related Item(s): Immigration, Global Mobility

Author(s)/Speaker(s): Stephen OFlaherty, Parvin Iman, Tyler Jones,

As the hot weather returns this week, tackling the climate emergency should be high on everyone’s agenda. But should employers give greater weight to the environment when deciding whether to say yes or no to an employee’s request to do their job remotely?

Text:

One of the legacies of the covid-19 pandemic is that remote working has become normal. Workers in the so-called knowledge economy are now commonly working remotely on a hybrid or fully remote basis, sometimes moving out of cities in search of a new lifestyle.

Employees are increasingly asking to work remotely from overseas locations, either for a few weeks at the end of a holiday or for a longer spell, perhaps even under a digital nomad visa. At the same time, environmental issues are becoming more important to businesses.

The need to address climate change by reducing our carbon emissions is urgent. Some employers are beginning to calculate their carbon emissions and, in time, more employers are expected to focus on slashing them.

What happens if these two trends – remote working and carbon reduction – start to compete with each other?

Carbon emissions

When deciding whether to grant an employee’s remote-working request, employers tend to focus mainly on feasibility: Will the request impact the employee’s performance? Can service levels be maintained? Does the employee have a suitable working space and facilities to work remotely? Will there be immigration, tax, employment law or social security issues if the employee wants to work remotely from overseas?

The climate, however, does not generally come into the equation. Employers do not tend to evaluate the environmental impact of requests to work remotely or assume it to be neutral if not beneficial compared with office commuting. It is hard to do so anyway, but maybe the climate should be more of a factor in decisions about flexible working.

Some remote-working requests, if granted, may lead to reduced carbon emissions. The obvious example relates to the emissions generated by the employee’s commute. They come within the employer’s “scope 3” (indirect) carbon emissions and there is technical guidance on how to quantify them. Employees can save emissions from commuting if they are working from home or working a reduced working week.

Even greater carbon savings can be achieved if the office shrinks or closes as employees work from home. The campaign for a four-day week has argued that shifting to a four-day working week without loss of pay could shrink the UK’s carbon footprint by more than the entire carbon footprint of Switzerland.

Some arrangements might even lead to more specific environmental benefits where, for example, an employee is planning to move to a more sustainable home and way of life and the remote-working arrangement is part of that overall plan.

By contrast, some remote-working arrangements may increase carbon emissions. In general terms, homeworking results in a smaller carbon footprint, but the picture is much more complicated when looked at on an individual level.

Depending upon factors such as their domestic energy source and consumption, the energy efficiency of the office and the time of year, employees may increase their employer’s scope 3 emissions by working from home. That’s why, for example, it would be better if city-dwelling German workers came to the office during winter and their Spanish counterparts did so in summer.

The picture becomes even more complicated if we look at requests to work remotely from an overseas location. For example, a round trip to Barbados (one of the first countries to launch a digital nomad visa) involves nearly 800 kgs of CO2, and that is before taking into account any emissions caused by air conditioning in the building where the employee plans to work.

Weighing the merits

Arguably, employers should perhaps be more aware of the specific climate impact of any remote-working request. But what, then, about the legal position? Can an employer legally take climate impact into account when weighing up the merits of a remote-working request?

If an employee asks for remote working under the statutory “right to request flexible working” regime, employers can only say no based on one of eight specific grounds such as additional cost or impact on performance. None of the eight grounds obviously relates to the environment. That is not to say that employers cannot take the environment into account, however.

First, it’s arguable that concepts such as “cost” or “performance” can stretch to include environmental costs or performance. Second, the penalties for infringing the flexible-working regime are very low (up to eight weeks’ pay). Third, many requests to work remotely are made outside of the statutory flexible working framework, especially requests to work temporarily overseas.

Policies that involve rejecting remote requests on environmental grounds might indirectly discriminate against certain protected groups (it’s arguable that overseas nationals are more likely to ask to work remotely from overseas) but may be justified – and there’s no reason why the environment could not be part of that objective justification. For employers who are prepared to be bold, therefore, there is scope for taking greater account of environmental factors when weighing up remote-working requests.

That said, a greater focus on the environmental impact of remote-working requests has the potential to cause conflict and resentment. Various studies show that employees, in general, are demanding greater action on the climate emergency, but many are also relishing the new remote-working possibilities thrown up by the pandemic. Are employees ready for climate-motivated pushback on their remote-working requests?  Or will they strongly resist that?

In many sectors, there is a recognised shortage of talent as a result of Brexit, covid, and other factors, so some employers will be wary of pushing back too hard. This perhaps is where compromises may have a role to play – you can work remotely for parts of the year or on the condition you power your home with sustainable or green energy? 

If businesses start evaluating the environmental impact of remote-working requests, will this cause disgruntled employees to ask questions about other scope 3 emissions – for example your approach to business flights or the commuting habits of your senior management team? 

Some employers may struggle with the resources and expertise to measure remote-working emissions impacts, although tools are increasingly available. Perhaps employers will be best able to weather these storms if they have a clear and cohesive environmental strategy.

For now, we’d advocate greater awareness and discussion about the environmental impact of remote working so more informed requests and decisions can be made. In time, we can expect to see more employers taking a policy stance that puts the environment into the equation where it was missing before.

This article was originally commissioned and published by International Employment Lawyer.

Related Item(s): Employment

Author(s)/Speaker(s): Jonathan Carr, Gemma Taylor,

As the hot weather returns this week, tackling the climate emergency should be high on everyone’s agenda. But should employers give greater weight to the environment when deciding whether to say yes or no to an employee’s request to do their job remotely?

Text:

One of the legacies of the covid-19 pandemic is that remote working has become normal. Workers in the so-called knowledge economy are now commonly working remotely on a hybrid or fully remote basis, sometimes moving out of cities in search of a new lifestyle.

Employees are increasingly asking to work remotely from overseas locations, either for a few weeks at the end of a holiday or for a longer spell, perhaps even under a digital nomad visa. At the same time, environmental issues are becoming more important to businesses.

The need to address climate change by reducing our carbon emissions is urgent. Some employers are beginning to calculate their carbon emissions and, in time, more employers are expected to focus on slashing them.

What happens if these two trends – remote working and carbon reduction – start to compete with each other?

Carbon emissions

When deciding whether to grant an employee’s remote-working request, employers tend to focus mainly on feasibility: Will the request impact the employee’s performance? Can service levels be maintained? Does the employee have a suitable working space and facilities to work remotely? Will there be immigration, tax, employment law or social security issues if the employee wants to work remotely from overseas?

The climate, however, does not generally come into the equation. Employers do not tend to evaluate the environmental impact of requests to work remotely or assume it to be neutral if not beneficial compared with office commuting. It is hard to do so anyway, but maybe the climate should be more of a factor in decisions about flexible working.

Some remote-working requests, if granted, may lead to reduced carbon emissions. The obvious example relates to the emissions generated by the employee’s commute. They come within the employer’s “scope 3” (indirect) carbon emissions and there is technical guidance on how to quantify them. Employees can save emissions from commuting if they are working from home or working a reduced working week.

Even greater carbon savings can be achieved if the office shrinks or closes as employees work from home. The campaign for a four-day week has argued that shifting to a four-day working week without loss of pay could shrink the UK’s carbon footprint by more than the entire carbon footprint of Switzerland.

Some arrangements might even lead to more specific environmental benefits where, for example, an employee is planning to move to a more sustainable home and way of life and the remote-working arrangement is part of that overall plan.

By contrast, some remote-working arrangements may increase carbon emissions. In general terms, homeworking results in a smaller carbon footprint, but the picture is much more complicated when looked at on an individual level.

Depending upon factors such as their domestic energy source and consumption, the energy efficiency of the office and the time of year, employees may increase their employer’s scope 3 emissions by working from home. That’s why, for example, it would be better if city-dwelling German workers came to the office during winter and their Spanish counterparts did so in summer.

The picture becomes even more complicated if we look at requests to work remotely from an overseas location. For example, a round trip to Barbados (one of the first countries to launch a digital nomad visa) involves nearly 800 kgs of CO2, and that is before taking into account any emissions caused by air conditioning in the building where the employee plans to work.

Weighing the merits

Arguably, employers should perhaps be more aware of the specific climate impact of any remote-working request. But what, then, about the legal position? Can an employer legally take climate impact into account when weighing up the merits of a remote-working request?

If an employee asks for remote working under the statutory “right to request flexible working” regime, employers can only say no based on one of eight specific grounds such as additional cost or impact on performance. None of the eight grounds obviously relates to the environment. That is not to say that employers cannot take the environment into account, however.

First, it’s arguable that concepts such as “cost” or “performance” can stretch to include environmental costs or performance. Second, the penalties for infringing the flexible-working regime are very low (up to eight weeks’ pay). Third, many requests to work remotely are made outside of the statutory flexible working framework, especially requests to work temporarily overseas.

Policies that involve rejecting remote requests on environmental grounds might indirectly discriminate against certain protected groups (it’s arguable that overseas nationals are more likely to ask to work remotely from overseas) but may be justified – and there’s no reason why the environment could not be part of that objective justification. For employers who are prepared to be bold, therefore, there is scope for taking greater account of environmental factors when weighing up remote-working requests.

That said, a greater focus on the environmental impact of remote-working requests has the potential to cause conflict and resentment. Various studies show that employees, in general, are demanding greater action on the climate emergency, but many are also relishing the new remote-working possibilities thrown up by the pandemic. Are employees ready for climate-motivated pushback on their remote-working requests?  Or will they strongly resist that?

In many sectors, there is a recognised shortage of talent as a result of Brexit, covid, and other factors, so some employers will be wary of pushing back too hard. This perhaps is where compromises may have a role to play – you can work remotely for parts of the year or on the condition you power your home with sustainable or green energy? 

If businesses start evaluating the environmental impact of remote-working requests, will this cause disgruntled employees to ask questions about other scope 3 emissions – for example your approach to business flights or the commuting habits of your senior management team? 

Some employers may struggle with the resources and expertise to measure remote-working emissions impacts, although tools are increasingly available. Perhaps employers will be best able to weather these storms if they have a clear and cohesive environmental strategy.

For now, we’d advocate greater awareness and discussion about the environmental impact of remote working so more informed requests and decisions can be made. In time, we can expect to see more employers taking a policy stance that puts the environment into the equation where it was missing before.

This article was originally commissioned and published by International Employment Lawyer.

Related Item(s): Employment

Author(s)/Speaker(s): Jonathan Carr, Gemma Taylor,

The requirement for some foreign nationals to register with the police has been suspended with effect from at least 4 August 2022. The Home Office has not made an official announcement and the Immigration Rules have not been amended, however affected individuals are being contacted by the Home Office or police services directly.

Text:

Under the UK Immigration Rules, certain foreign nationals are subject to an immigration condition requiring them to register with the police. They are also required to make notifications to the police where certain of their circumstances, had changed, e.g. they move residential address, change jobs or have an extension of their immigration permission. Although these requirements are currently still included in the Immigration Rules, they are no longer being observed in practice, as confirmed on GOV.UK from 4 August 2022.

This change will be welcomed because it removes a significant administrative burden both for the affected individuals and UK police forces. The registration system had been severely backlogged for some time, with the Metropolitan Police advising that no registration appointments were available until 2023.

Also, individuals who fail to comply with the condition are no longer at risk of criminal prosecution and/or refusal of immigration permission.

What do affected individuals need to know about this change?

A public notice issued by the Home Office, National Police Chief’s Council and Counter Terrorism Policing confirms that:

• Individuals who receive the public notice are no longer required to register with the police from the date of its receipt (this includes people who are waiting for an appointment);

• Individuals who have been issued with a visa with the police registration requirement endorsed but who have not yet travelled will either have their visa reissued if possible or will be notified of the change in their conditions in advance of travel;

• Immigration permission will now be granted without the police registration requirement imposed;

• Individuals who present at a police registration office will be advised they are not required to register;

• Individuals who have already travelled or who are in the UK will not have their visa/BRP updated to reflect the removal of the requirement;

• Individuals with existing immigration permission containing the condition will not have their visa or BRP amended, but they are no longer required to retain their police registration certificate or to report any changes to the information included on it to the police. They do however continue to be required to report certain changes to the Home Office;

• Proof of compliance with the requirement will not be required for applications for further UK immigration permission; and

• Individuals who have already paid the registration fee prior to the scheme being suspended will not be refunded.

If you have any queries about this development, please get in touch with a member of our Immigration Team.

Related Item(s): Immigration

Author(s)/Speaker(s): Andrew Osborne, Supinder Singh Sian, Kathryn Denyer,

The requirement for some foreign nationals to register with the police has been suspended with effect from at least 4 August 2022. The Home Office has not made an official announcement and the Immigration Rules have not been amended, however affected individuals are being contacted by the Home Office or police services directly.

Text:

Under the UK Immigration Rules, certain foreign nationals are subject to an immigration condition requiring them to register with the police. They are also required to make notifications to the police where certain of their circumstances, had changed, e.g. they move residential address, change jobs or have an extension of their immigration permission. Although these requirements are currently still included in the Immigration Rules, they are no longer being observed in practice, as confirmed on GOV.UK from 4 August 2022.

This change will be welcomed because it removes a significant administrative burden both for the affected individuals and UK police forces. The registration system had been severely backlogged for some time, with the Metropolitan Police advising that no registration appointments were available until 2023.

Also, individuals who fail to comply with the condition are no longer at risk of criminal prosecution and/or refusal of immigration permission.

What do affected individuals need to know about this change?

A public notice issued by the Home Office, National Police Chief’s Council and Counter Terrorism Policing confirms that:

• Individuals who receive the public notice are no longer required to register with the police from the date of its receipt (this includes people who are waiting for an appointment);

• Individuals who have been issued with a visa with the police registration requirement endorsed but who have not yet travelled will either have their visa reissued if possible or will be notified of the change in their conditions in advance of travel;

• Immigration permission will now be granted without the police registration requirement imposed;

• Individuals who present at a police registration office will be advised they are not required to register;

• Individuals who have already travelled or who are in the UK will not have their visa/BRP updated to reflect the removal of the requirement;

• Individuals with existing immigration permission containing the condition will not have their visa or BRP amended, but they are no longer required to retain their police registration certificate or to report any changes to the information included on it to the police. They do however continue to be required to report certain changes to the Home Office;

• Proof of compliance with the requirement will not be required for applications for further UK immigration permission; and

• Individuals who have already paid the registration fee prior to the scheme being suspended will not be refunded.

If you have any queries about this development, please get in touch with a member of our Immigration Team.

Related Item(s): Immigration

Author(s)/Speaker(s): Andrew Osborne, Supinder Singh Sian, Kathryn Denyer,

Employment law and immigration law are two distinct areas of law. On occasion, they meet each other and can create headaches for employers. We examine what happens when immigration law collides with discrimination law, unfair dismissal law and TUPE.

Text:

Employment and immigration: an uncomfortable relationship?

It can be helpful to think of employment law and immigration law as two awkward siblings. They usually get along fine, sometimes they even work together well, but they are distinct beings. Occasionally, they get in each other’s way. When we consider their overarching structure and purpose, the potential for conflict between these bodies of law is clear:

• Employment law governs how the working relationship functions. It is concerned with rights for employees e.g. rights to pay and notice, protection from discrimination and unfair dismissal etc. Employment tribunals and civil courts hear disputes between employers and employees. If an employer breaches employment law, an employee may lodge a claim. If the employee wins, in many cases the employer will be ordered to pay compensation

• Immigration law exists in a parallel world in which the Home Office is king. Immigration law dictates how someone can join a UK workforce from abroad. The Home Office sets, monitors and enforces immigration rules. A fundamental principle is that all employees must have the ‘right to work’ for their employer in the UK. Most non-British/Irish workers need to obtain and hold a work visa before they can do their job in the UK. A failure to follow the rules – for example, working without appropriate immigration permission – may result in the Home Office taking action against the employer and/or the employee.

We consider three of the most common scenarios in which immigration and employment issues overlap.

Can an employer reject job applicants who do not have the right to work in the UK?

Immigration law versus discrimination law

Immigration law is discriminatory. It creates a two-tier hierarchy of job applicants and employees, divided along nationality lines. British and Irish nationals can start any job in the UK without anything other than an assessment of their professional credentials. But other nationals, for the most part, need something more. To hire a migrant who does not already hold some form of immigration status that enables them to work in the UK, an employer will usually have to “sponsor” that individual under a work visa (e.g. a Skilled Worker visa). The employer must first have obtained a “sponsor licence” from the Home Office. The grant of that licence requires the employer to understand and fulfil various compliance obligations. Then, the candidate needs to apply for a visa, which involves satisfying eligibility criteria and the payment of fees to the Home Office (commonly covered by the employer). Because of these financial and administrative hurdles, a question we are sometimes asked is: can an employer automatically reject candidates who do not already have the right to work in the UK?

The employment right at play here is protection from discrimination. All workers and job applicants in the UK enjoy the right not to be discriminated against in relation to certain protected characteristics (including race, ethnicity and nationality). The Home Office has issued guidance for employers in the form of a statutory code of practice: ‘Avoiding unlawful discrimination while preventing illegal working’. The code states:

Employers should:

• be consistent in how they conduct right to work checks on all prospective employees, including British citizens

• ensure job selections are made on the basis of suitability for the post

• ensure that no prospective job applicants are discouraged or excluded, either directly or indirectly, because of known or perceived protected characteristics

Employers should not:

• discriminate when conducting right to work checks

• only check the status of those who appear to the employer likely to be migrants

• make assumptions about a person’s right to work in the UK or their immigration status on the basis of their colour, nationality, ethnic or national origins, accent, surname or the length of time they have been resident in the UK

An employment tribunal may take the Code into consideration when determining whether discrimination has occurred.

Can a rejection policy be justified?

An automatic rejection policy based on right to work status is likely to be “indirectly” race discriminatory against a group of job applicants, namely non-British/Irish nationals (meaning the policy technically applies to all applicants, but in practice has a particularly detrimental effect on a particular group). Indirect discrimination can, however, be “objectively justified” if it is found to be a “proportionate means of achieving a legitimate aim”. This means that an indirectly discriminatory policy could potentially be lawful if the employer has a good reason for it, and there are not other, less discriminatory, ways of achieving the same aim. What is or is not a valid justification will turn on the particular facts presented to an employment tribunal.

The first question is whether the employer has a “legitimate aim” – put simply, a good reason – for the policy. This, of course, depends on the specific context and facts. But, as a general point, the case law in this area is underdeveloped and not particularly favourable to employers. The leading case – Osborne Clarke v Purohit – is from 2009 and long pre-dates the current immigration system but remains binding on tribunals. It concerned a law firm’s policy of excluding candidates from trainee solicitor roles if they did not already have the right to work. The Employment Appeal Tribunal found that the policy did amount to unlawful indirect race discrimination as it could not be objectively justified on the basis of cost alone, especially in light of the firm’s ample resources. Instead, the firm should have conducted the recruitment process on merit ‘as normal’. It should only have thought about sponsorship questions towards the end of the process.

The Home Office code of practice (mentioned above) reinforces that central takeaway message, stating that employers should “ensure job selections are made on the basis of suitability for the post” (although both the judgment and the code do state that there is no obligation to sponsor someone). An employer considering implementing an automatic rejection policy should therefore be aware of the risk of relying only on costs to justify such policies, with the risk that a spurned job applicant would lodge an indirect discrimination claim with an employment tribunal.

Although this case remains binding, the immigration system of today is more complex and costly than it once was. An employer may, therefore, have more success if these kind of “objective justification” arguments were presented now (although, to our knowledge, the point is untested). For example, some employers have taken a view that a rejection policy for lower paid roles may be more likely to be justified, because roles paying less than £25,600 a year are, generally, ineligible for sponsorship under the Skilled Worker route. However, this is not a hard-and-fast rule. Some employees can be sponsored on an annual salary of less than £25,600. As a result, an employer would be well advised to think through this issue in detail, with careful consideration given to the reasons behind its policy. We recommend that legal advice is sought at an early stage.

Immigration fee clawbacks

As an alternative means of managing the cost of sponsoring an employee, increasingly employers are asking sponsored employees to sign up to ‘clawback’ repayment agreements. These see the sponsored employee being required to repay some or all of the fees associated with their visa application if the employment relationship ends. However, these arrangements are not without legal risk. An employee may argue that it is an unlawful penalty clause, an unlawful restraint of trade, or a discriminatory measure. Careful drafting is essential, with mechanisms such as ‘tapering’ the amount of the repayment over time and including a ‘sunset’ provision often advisable. It should also be noted that the Home Office prohibits a sponsor from passing on the cost of any Immigration Skills Charge it has paid.

Should an employer dismiss an employee who does not hold the right to work in the UK?

Immigration law versus unfair dismissal law

Immigration law requires that all employees have the right to work for their employer in the UK. If an employer suspects that an existing employee does not have the right to work for them in the UK, continuing the employment relationship may pose compliance risks for the employer. On the other hand, employment law says that employees with two years’ service have the right not to be “unfairly” dismissed from their job. Further, all employees (regardless of their length of service) have the right not to be treated in a discriminatory way. So, how should an employer handle a situation where it comes to light that an employee may not hold the right to work? Balancing the immigration and employment risks in this situation can be challenging.

Conducting right to work checks and investigating immigration status

The first thing to note is how the UK’s right to work regime operates. If an employee works without immigration permission, the Home Office considers them to be an “illegal” worker. The employer would be liable to receive a civil penalty (a financial penalty of up to £20,000) in respect of each illegal worker. It may even face criminal prosecution if it knew or should have known of the illegal working in question. However, if an employer properly undertook a right to work check, they will receive a “statutory excuse” against a civil penalty in respect of that illegal worker. If a worker does not hold the right to work, but the employer did a compliant right to work check before the start of their employment, the employer will not be liable for a civil penalty.

There is no obligation to do follow-up right to work checks during the employment relationship, except where an employee has time-limited immigration permission. However, it may come to light that an employee who once had the right to work in the UK may no longer continue to hold that right. For example, they may have forgotten to apply for an extension of their immigration permission before it expired. If an employer becomes aware of the possibility that an employee has lost their right to work in the UK, swift and considered action is advisable, because the continued employment of an employee without immigration permission may pose serious immigration risks for the employer.

But the employment law dimension must not be forgotten. To minimise employment risks, the employer should promptly try to investigate the employee’s right to work status. However, there is an obvious conflict here: while there is a need to undertake a form of procedure to mitigate the employment risks, there is also a need for urgent action to mitigate the immigration risks.

A fair procedure would probably involve the employer meeting with the employee. The employee should be encouraged to provide information that would be helpful in determining their immigration status.

The employer may also wish to conduct a check using the Home Office’s Employer Checking Service, because a ‘Positive Verification Notice’ would give the employer a statutory excuse against liability for a civil penalty for six months. Caution should be exercised even if a ‘Negative Verification Notice’ is received. This can sometimes happen where an individual does actually have the right to work e.g. where an application or appeal has not yet been logged on the Home Office’s systems or it has not been registered that the person is a Windrush generation individual. We recommend that immigration law advice is sought in this scenario.

If the employer, having conducted its investigation, concludes that the employee probably does not have the right to work, dismissal may well be appropriate – and, potentially, necessary. However, a failure to follow a fair procedure and arrive to an informed decision may prompt the employee to lodge an unfair dismissal and/or discrimination claim.

Dismissing for right to work reasons

If, following a fairly conducted investigation, the employer reaches a conclusion that dismissal is unavoidable, the termination letter should include:

• a description of the investigation;

• a reference to the right to work provisions in the employment contract;

• the reason for the dismissal (taking the form of “because we believe that you do not have the right to work”, rather than “because you do not have the right to work”);

• the right of appeal; and

• potentially an offer of re-engagement if the employee can prove they have the right to work.

We recommend that full legal advice on how to handle these scenarios is sought on a case-by-case basis both because of the risk of tribunal claims and also because an employee who seemingly does not have the right to work may, in fact, actually have that right.

Does a TUPE transfer of sponsored employees require the new employer to do anything?

Most employment lawyers are familiar with the Transfer of Undertakings (Protection of Employment) Regulations 2006 (aka “TUPE”). After a TUPE transfer, employees’ terms and benefits are preserved when their employment transfers to the new employer. However, the ways in which TUPE interacts with immigration law are less well understood. Consequently, it is not uncommon to overlook a couple of important immigration-related issues in corporate transactions.

Post-transfer right to work checks

Under TUPE, right to work checks that were done by the seller of the transferring business are deemed to have been done by the buyer. In other words, the buyer will get the benefit of a statutory excuse that the seller obtained in relation to a transferring illegal worker. The flip side of this is that if the seller did not do proper right to work checks, and so did not obtain a statutory excuse for a transferring illegal worker, the buyer will potentially be liable for a civil penalty in respect of that person.

For this reason, the buyer would be well advised to undertake due diligence on whether the seller has done compliant right to work checks. The transaction paperwork (e.g. the asset purchase agreement) should address the issue in the form of appropriate warranties and/or indemnities. Then, after the transfer, the buyer should ensure that it conducts fresh right to work checks on those transferring employees. There is a grace period of 60 days from the transfer date to do so.

Sponsor licence notification or application

If the TUPE transfer involves the transfer of sponsored employees, both the buyer and the seller must notify the Home Office of the change of sponsor. They must do so within a relatively short period of 20 working days from the date of the transfer. If the buyer does not itself already hold a sponsor licence of its own, it must apply for one from the Home Office and prepare to assume responsibility for the sponsorship of those employees. The window for applying is, again, 20 working days from the date of the transfer. A failure to make an application will likely mean that the Home Office cancels the sponsored employees’ immigration permission. Both parties to the TUPE transfer must therefore be alive to their post-completion obligations and the transaction agreements should be drafted accordingly.

If a sponsored employee’s duties and responsibilities will change, such that the transfer is outside the scope of TUPE, this would usually require a fresh immigration application to be made to authorise them to start working in the new position for their new employer.

Any questions?

Although this article considers aspects of some of the more commonly encountered questions that we deal with, it cannot give a full account of the various dimensions and complexities of each scenario. We therefore strongly recommend that full legal advice is sought on a case-by-case basis when handling these difficult questions in practice. If you need assistance, please do get in touch with a member of our Employment Team or Immigration Team.

Related Item(s): Employment, Immigration

Author(s)/Speaker(s): Tom McEvoy,