The Home Office has provided UK employers with further details about what actions they may take when checking the right to work of EEA nationals and their family members during the post-transition grace period from 1 January 2021 to 30 June 2021.

Text:

Topics covered include checking right to work documentation issued under the Immigration Rules and carrying out retrospective right to work checks for existing employees.

The guidance is contained in an updated version of An employer’s guide to right to work checks, which was published on 17 March 2021. Points to note include the following:

• There is now an acknowledgement from the Home Office that employers may want to ensure the stability of their workforce during the grace period, and to help employees to obtain the appropriate immigration status they need to be able to work in the UK beyond the grace period

• Employers are advised that they may invite individuals who have been granted status under the EU Settlement Scheme or the post-Brexit immigration system to evidence their right to work using the Home Office online service, but during the grace period they cannot insist that an individual proves their right to work using the online service

• Employers are not required, but are allowed, to carry out retrospective right to work checks on existing EEA national/EEA family member employees, as long as these are conducted in a non-discriminatory way in accordance with the requirements of the Home Office’s Code of practice on avoiding unlawful discrimination while preventing illegal working

• If an EEA national (or presumably their family member, although this is not stated in the guidance) cannot provide documents in a retrospective check to the standard required to establish a statutory excuse, the employer is advised to contact the Employer Checking Service

• From 1 July 2021 the requirements for right to work checks for EEA nationals will change, and evidence of UK immigration status will be required using the Home Office’s online service, subject to limited exceptions

• New guidance on the requirements for right to work checks from 1 July 2021 will be published by the Home Office ahead of this date

For further information carrying out right to work checks for EEA nationals and their family members during the grace period, please see our previous webinar and FAQ, or contact a member of our Immigration Team.

Related Item(s): Immigration & Global Mobility

Author(s)/Speaker(s): Andrew Osborne, Li Xiang, Tom McEvoy,

The Home Office has provided UK employers with further details about what actions they may take when checking the right to work of EEA nationals and their family members during the post-transition grace period from 1 January 2021 to 30 June 2021.

Text:

Topics covered include checking right to work documentation issued under the Immigration Rules and carrying out retrospective right to work checks for existing employees.

The guidance is contained in an updated version of An employer’s guide to right to work checks, which was published on 17 March 2021. Points to note include the following:

• There is now an acknowledgement from the Home Office that employers may want to ensure the stability of their workforce during the grace period, and to help employees to obtain the appropriate immigration status they need to be able to work in the UK beyond the grace period

• Employers are advised that they may invite individuals who have been granted status under the EU Settlement Scheme or the post-Brexit immigration system to evidence their right to work using the Home Office online service, but during the grace period they cannot insist that an individual proves their right to work using the online service

• Employers are not required, but are allowed, to carry out retrospective right to work checks on existing EEA national/EEA family member employees, as long as these are conducted in a non-discriminatory way in accordance with the requirements of the Home Office’s Code of practice on avoiding unlawful discrimination while preventing illegal working

• If an EEA national (or presumably their family member, although this is not stated in the guidance) cannot provide documents in a retrospective check to the standard required to establish a statutory excuse, the employer is advised to contact the Employer Checking Service

• From 1 July 2021 the requirements for right to work checks for EEA nationals will change, and evidence of UK immigration status will be required using the Home Office’s online service, subject to limited exceptions

• New guidance on the requirements for right to work checks from 1 July 2021 will be published by the Home Office ahead of this date

For further information carrying out right to work checks for EEA nationals and their family members during the grace period, please see our previous webinar and FAQ, or contact a member of our Immigration Team.

Related Item(s): Immigration & Global Mobility

Author(s)/Speaker(s): Andrew Osborne, Li Xiang, Tom McEvoy,

The Home Office is launching a new Graduate route from 1 July 2021 and is making amendments to Skilled Worker route from 6 April 2021

Text:

These include changes to the shortage occupation list, eligible occupations, salary calculation rules and compliance requirements where a salary is reduced.

These changes are set out in Statement of Changes in Immigration Rules HC 1248, which was published on 4 March 2021. We share our views on the implications of the main changes below, as well as flagging other changes most likely to be of interest to employers.

Graduate route

From 1 July 2021 international students who have successfully completed an eligible qualification as a Student (including Tier 4 student) after a period of physically studying in the UK will be able to apply in-country for further permission to stay under a new Graduate route. Successful applicants will be granted immigration permission for three years if they completed a PhD or other doctorate, or two years for any other eligible qualification.

Interestingly, the list of eligible qualifications for the Graduate route is broader than those recognised for eligibility under the new entrant requirements for Skilled Worker, and includes the following:

• UK bachelor or UK post-graduate degree

• Law conversion course valid in England and Wales

• Legal Practice Course (LPC) or equivalent

• Bar Practice Course or equivalent

• Foundation programme in medicine or dentistry

• Postgraduate Certificate in Education (PGCE) or Postgraduate Diploma in Education (PGDE)

• Professional course requiring study at UK bachelor level or above in a profession with reserved activities regulated by UK law or a UK public authority

The implication of this discrepancy is that unless a Student is eligible to apply under the Skilled Worker route as a new entrant on a basis other than their completed UK studies, they may need to switch into the Graduate route and then into Skilled Worker in order to start the clock running towards settlement based on the lower salary threshold for new entrants.

Graduate route migrants will be allowed to undertake any work at any skill level, and to study in the UK provided this is not on a course that would normally require sponsorship as a Student. They will also be able to apply under the Skilled Worker route using the new entrant tradeable points criteria if they apply within two years of holding immigration permission under the Graduate route, noting that time spent in the Graduate route will count towards the four year maximum time that a person can hold immigration permission as a new entrant.

Time spent in the Graduate route will not be counted towards settlement other than based on ten years continuous lawful residence in the UK.

Graduate route migrants will be allowed to be accompanied by dependants, but only if the dependants were in the UK as the graduate’s Student dependant or born in the UK while the graduate had immigration permission as a student. There is no direct provision for child dependants born while the graduate has immigration permission under the Graduate route, which appears to be a drafting error. Unless such a provision is made in the future, they will need to apply under a general provision for children born in the UK to parents with limited immigration permission.

Skilled Worker route

Amendments are made to salary requirements, the Shortage Occupation List and occupations eligible for sponsorship for applications made from 6 April 2021.

Amendments to salary requirements – new £10.10 minimum hourly rate

A minimum hourly rate of £10.10 is being introduced for the route. This equates to the hourly rate a person being paid an annual salary of £20,480 (the minimum general salary floor for the Skilled Worker route) would receive for a 39-hour week.

Employers who have assigned a Certificate of Sponsorship before 6 April 2021 that does not meet the new requirement will need to consider whether the related immigration application can be submitted on or before 5 April 2021. If it cannot, they will need to consider whether the salary and/or hours worked per week can be revised, and if appropriate, make the change using a sponsor note. The applicant will also need to be advised of any changes.

Individuals who have already  immigration permission based on a salary that does not comply with the new minimum hourly rate will be able to extend their immigration permission as a Skilled Worker at their existing hourly rate due to a transitional arrangement. However, the hourly rate will be applied at the point at which people who benefit from the transitional arrangement apply for settlement.

As a reminder, no discounts apply to the going rates that the applicant must be paid when applying for settlement as a Skilled Worker. This may mean that in order to qualify for settlement, some Skilled Workers, eg those who scored tradeable points based on a discounted going rate, will need to have their salary increased so that it meets all of the following:

• The general salary threshold applicable to them (£20,480/£23,040/£25,600);

• £10.10 per hour; and

• The full going rate for their role.

Amendments to salary requirements – Certain science and Higher education teaching roles

When the Skilled Worker route was introduced, the going rates for skilled occupations were reviewed, resulting in substantial increases in the going rate for the following Standard Occupation Classification (SOC) codes:

• 2113 Physical scientists

• 2119 Natural and social science professionals not elsewhere classified

• 2311 Higher education teaching professionals

A transitional arrangement is being made so that individuals who were last granted immigration permission under Tier 2 General in these SOC codes can extend their stay and settle in the UK on the basis of a table setting out lower going rates than apply to other Skilled Workers in the same occupations, provided they apply by 30 November 2026.

Amendments to Shortage Occupation List

The UK-wide Shortage Occupation list is being expanded for applications made on or after 6 April 2021, to include roles under the following health and care sector SOC codes:

• 1181 Health services and public health managers and directors

• 1242 Residential, day and domiciliary care managers and proprietors

• 3111 Laboratory technicians

• 6146 Senior care workers

• 2213 Pharmacists

• 2219 Health professionals not elsewhere classified

• 2221 Physiotherapists

• 6141 Nursing auxiliaries and assistants

 Secondary teaching professionals (SOC 2314) in modern foreign languages are also recognised as a shortage occupation and SOC 5434 Chefs are removed on the basis that they now qualify under the main Skilled Worker route and at a lower salary level than required on the Shortage Occupation List.

These changes partly adopt the recommendations made by the Migration Advisory Committee (MAC) in September last year, which the Home Office deferred acting on immediately due to uncertainty around the labour market effects of the COVID-19 pandemic.

Employers should note that to be eligible for 20 tradeable points due to the role being a recognised shortage occupation, the salary paid for individuals filling shortage occupations must still meet the £20,480 minimum salary threshold or 80% of the going rate for the role, whichever is higher. This is different from the previous position under Tier 2 General, where inclusion on the shortage occupation list automatically entitled the applicant to points. A potential trap is that the going rate for Band 3 healthcare occupations is £19,737 in England, Wales and Northern Ireland, so employers for these roles must ensure sponsored individuals are paid at least a basic salary of £20,480.

New occupations eligible for sponsorship

Deckhands on large (nine metre plus) fishing vessels and vent chick sexers have been made eligible for sponsorship, also following the MAC’s recommendations. In each case eligible workers must have at least three years’ relevant experience.

Salary reductions

A new compliance requirement is being added to require a Skilled Worker to make a fresh application if their salary is reduced but they claim that they still qualify for the route on the basis of scoring a different set of tradeable points than they were previously approved under. This will enable the Home Office to assess the individual’s eligibility for the different set of tradeable points.

Other changes of interest to employers

These include:

• Allowing veterinarians to rely on the English language assessment they passed for professional regulation to meet the English language requirement for sponsorship under the Skilled Worker route

• Re-implementing a transitional arrangement to allow intra-company transferees previously granted permission under the Immigration Rules in force before 6 April 2011, or as a work permit holder, to extend their stay under the Intra-Company Transfer route with no maximum cumulative period of immigration permission in this capacity

• Allowing holders of certain prestigious prizes such as Academy Awards, BAFTAs, Brit Awards, British Fashion Council Fashion Awards, Golden Globes, Grammy Awards, Nobel Prizes, OIivier Awards and Tony Awards to qualify for the route without needing an endorsement from an endorsing body, and for them toproceed to settlement after three years

• Confirming that at settlement stage, dependants in certain work routes are not required to meet an absence requirement of no more than 180 days per year for any periods of immigration permission they were granted before 11 January 2018 – this is more restrictive than the Rule which was inadvertently previously deleted, which covered periods of leave granted following an application made under the Rules in place before 11 January 2018

• Only counting time spent in the UK towards the maximum 14 days allowed between engagements for T5 Creative and Sporting workers

For further information on these changes and how they may affect you, please contact a member of our Immigration Team.

 

Related Item(s): Immigration & Global Mobility

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

The Home Office is launching a new Graduate route from 1 July 2021 and is making amendments to Skilled Worker route from 6 April 2021

Text:

These include changes to the shortage occupation list, eligible occupations, salary calculation rules and compliance requirements where a salary is reduced.

These changes are set out in Statement of Changes in Immigration Rules HC 1248, which was published on 4 March 2021. We share our views on the implications of the main changes below, as well as flagging other changes most likely to be of interest to employers.

Graduate route

From 1 July 2021 international students who have successfully completed an eligible qualification as a Student (including Tier 4 student) after a period of physically studying in the UK will be able to apply in-country for further permission to stay under a new Graduate route. Successful applicants will be granted immigration permission for three years if they completed a PhD or other doctorate, or two years for any other eligible qualification.

Interestingly, the list of eligible qualifications for the Graduate route is broader than those recognised for eligibility under the new entrant requirements for Skilled Worker, and includes the following:

• UK bachelor or UK post-graduate degree

• Law conversion course valid in England and Wales

• Legal Practice Course (LPC) or equivalent

• Bar Practice Course or equivalent

• Foundation programme in medicine or dentistry

• Postgraduate Certificate in Education (PGCE) or Postgraduate Diploma in Education (PGDE)

• Professional course requiring study at UK bachelor level or above in a profession with reserved activities regulated by UK law or a UK public authority

The implication of this discrepancy is that unless a Student is eligible to apply under the Skilled Worker route as a new entrant on a basis other than their completed UK studies, they may need to switch into the Graduate route and then into Skilled Worker in order to start the clock running towards settlement based on the lower salary threshold for new entrants.

Graduate route migrants will be allowed to undertake any work at any skill level, and to study in the UK provided this is not on a course that would normally require sponsorship as a Student. They will also be able to apply under the Skilled Worker route using the new entrant tradeable points criteria if they apply within two years of holding immigration permission under the Graduate route, noting that time spent in the Graduate route will count towards the four year maximum time that a person can hold immigration permission as a new entrant.

Time spent in the Graduate route will not be counted towards settlement other than based on ten years continuous lawful residence in the UK.

Graduate route migrants will be allowed to be accompanied by dependants, but only if the dependants were in the UK as the graduate’s Student dependant or born in the UK while the graduate had immigration permission as a student. There is no direct provision for child dependants born while the graduate has immigration permission under the Graduate route, which appears to be a drafting error. Unless such a provision is made in the future, they will need to apply under a general provision for children born in the UK to parents with limited immigration permission.

Skilled Worker route

Amendments are made to salary requirements, the Shortage Occupation List and occupations eligible for sponsorship for applications made from 6 April 2021.

Amendments to salary requirements – new £10.10 minimum hourly rate

A minimum hourly rate of £10.10 is being introduced for the route. This equates to the hourly rate a person being paid an annual salary of £20,480 (the minimum general salary floor for the Skilled Worker route) would receive for a 39-hour week.

Employers who have assigned a Certificate of Sponsorship before 6 April 2021 that does not meet the new requirement will need to consider whether the related immigration application can be submitted on or before 5 April 2021. If it cannot, they will need to consider whether the salary and/or hours worked per week can be revised, and if appropriate, make the change using a sponsor note. The applicant will also need to be advised of any changes.

Individuals who have already  immigration permission based on a salary that does not comply with the new minimum hourly rate will be able to extend their immigration permission as a Skilled Worker at their existing hourly rate due to a transitional arrangement. However, the hourly rate will be applied at the point at which people who benefit from the transitional arrangement apply for settlement.

As a reminder, no discounts apply to the going rates that the applicant must be paid when applying for settlement as a Skilled Worker. This may mean that in order to qualify for settlement, some Skilled Workers, eg those who scored tradeable points based on a discounted going rate, will need to have their salary increased so that it meets all of the following:

• The general salary threshold applicable to them (£20,480/£23,040/£25,600);

• £10.10 per hour; and

• The full going rate for their role.

Amendments to salary requirements – Certain science and Higher education teaching roles

When the Skilled Worker route was introduced, the going rates for skilled occupations were reviewed, resulting in substantial increases in the going rate for the following Standard Occupation Classification (SOC) codes:

• 2113 Physical scientists

• 2119 Natural and social science professionals not elsewhere classified

• 2311 Higher education teaching professionals

A transitional arrangement is being made so that individuals who were last granted immigration permission under Tier 2 General in these SOC codes can extend their stay and settle in the UK on the basis of a table setting out lower going rates than apply to other Skilled Workers in the same occupations, provided they apply by 30 November 2026.

Amendments to Shortage Occupation List

The UK-wide Shortage Occupation list is being expanded for applications made on or after 6 April 2021, to include roles under the following health and care sector SOC codes:

• 1181 Health services and public health managers and directors

• 1242 Residential, day and domiciliary care managers and proprietors

• 3111 Laboratory technicians

• 6146 Senior care workers

• 2213 Pharmacists

• 2219 Health professionals not elsewhere classified

• 2221 Physiotherapists

• 6141 Nursing auxiliaries and assistants

 Secondary teaching professionals (SOC 2314) in modern foreign languages are also recognised as a shortage occupation and SOC 5434 Chefs are removed on the basis that they now qualify under the main Skilled Worker route and at a lower salary level than required on the Shortage Occupation List.

These changes partly adopt the recommendations made by the Migration Advisory Committee (MAC) in September last year, which the Home Office deferred acting on immediately due to uncertainty around the labour market effects of the COVID-19 pandemic.

Employers should note that to be eligible for 20 tradeable points due to the role being a recognised shortage occupation, the salary paid for individuals filling shortage occupations must still meet the £20,480 minimum salary threshold or 80% of the going rate for the role, whichever is higher. This is different from the previous position under Tier 2 General, where inclusion on the shortage occupation list automatically entitled the applicant to points. A potential trap is that the going rate for Band 3 healthcare occupations is £19,737 in England, Wales and Northern Ireland, so employers for these roles must ensure sponsored individuals are paid at least a basic salary of £20,480.

New occupations eligible for sponsorship

Deckhands on large (nine metre plus) fishing vessels and vent chick sexers have been made eligible for sponsorship, also following the MAC’s recommendations. In each case eligible workers must have at least three years’ relevant experience.

Salary reductions

A new compliance requirement is being added to require a Skilled Worker to make a fresh application if their salary is reduced but they claim that they still qualify for the route on the basis of scoring a different set of tradeable points than they were previously approved under. This will enable the Home Office to assess the individual’s eligibility for the different set of tradeable points.

Other changes of interest to employers

These include:

• Allowing veterinarians to rely on the English language assessment they passed for professional regulation to meet the English language requirement for sponsorship under the Skilled Worker route

• Re-implementing a transitional arrangement to allow intra-company transferees previously granted permission under the Immigration Rules in force before 6 April 2011, or as a work permit holder, to extend their stay under the Intra-Company Transfer route with no maximum cumulative period of immigration permission in this capacity

• Allowing holders of certain prestigious prizes such as Academy Awards, BAFTAs, Brit Awards, British Fashion Council Fashion Awards, Golden Globes, Grammy Awards, Nobel Prizes, OIivier Awards and Tony Awards to qualify for the route without needing an endorsement from an endorsing body, and for them toproceed to settlement after three years

• Confirming that at settlement stage, dependants in certain work routes are not required to meet an absence requirement of no more than 180 days per year for any periods of immigration permission they were granted before 11 January 2018 – this is more restrictive than the Rule which was inadvertently previously deleted, which covered periods of leave granted following an application made under the Rules in place before 11 January 2018

• Only counting time spent in the UK towards the maximum 14 days allowed between engagements for T5 Creative and Sporting workers

For further information on these changes and how they may affect you, please contact a member of our Immigration Team.

 

Related Item(s): Immigration & Global Mobility

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

The final instalment of our three-part series of articles exploring resourcing challenges, opportunities and trends in 2021 examines a range of employment issues including reward strategy, outsourcing and collective representation.

Text:

The first article in our series explored some of the immediate options for responding to the challenges of the pandemic, including government support packages, restructuring, changing terms and alternative contracting options. Our second article looked at the trend towards homeworking and other flexible working arrangements and the growing focus on wellbeing, trust and culture as key to recruiting and retaining staff.

In this final article, we share our thoughts on how the current situation is impacting a range of employment-related areas, from post-termination restrictions and reward packages through to outsourcing and collective representation. We also consider how the impact of Brexit may drive employers to consider new resourcing options.

Retaining and incentivising key staff

In economically uncertain times, retaining experienced and proficient employees becomes even more critical for employers. Those which can retain effective and knowledgeable members of staff will stand a better chance than others of continuing to deliver for their customers and clients, and thereby weathering the economic storm. Training and upskilling employees involves significant cost – an investment that will be lost if you cannot retain highly skilled employees. Most likely, a competitor will benefit from your investment instead, particularly if the skills are scarce and so highly valued.

Most employers will adopt a “carrot and stick” approach in order to encourage employees to stay, while safeguarding key interests in the event they choose to leave. 

Until now, the “carrot” has generally been inward-looking, in terms of ensuring an attractive remuneration package. This includes not only salary, benefits and annual bonuses, but also long-term incentive plans (LTIPs) to incentivise loyalty and performance on a more longstanding basis (see our article on long-term employee incentive plans in a recession). Businesses will need to navigate between retaining and motivating key staff and keeping a tight control on cost, so it remains important to ensure remuneration packages are as tax effective as possible.

We have recently seen employers moving away from investing in the pure financial package and instead looking at reward in a more holistic way – including, for example, health and wellbeing related benefits. (This increasing focus on wellbeing, trust and culture, was discussed in the second articlein our series.)

The “stick” approach is likely to involve the inclusion of carefully considered and well-drafted restrictive covenants in employment contracts. In some cases, the purpose of such post-termination restraints is to prevent an employee being able to leave and immediately join a competing business. In other situations, the prime purpose is to manage the commercial risk of an employee leaving – for example, by preventing them from soliciting certain clients, customers or other employees for a set period.

Where long-serving employees are concerned, it is a common scenario that their restrictions have not been reviewed and amended they have been promoted and/or their role has evolved. As that can lead to challenges with enforcement, it is important regularly to review the restrictions of key employees to ensure that they are up to date and relevant to the role the individual undertakes. (See our article on the impact of coronavirus on post-termination restrictions.)

The government has recently launched a consultation on reform of non-compete clauses, observing that Covid-19 has had a “profound impact on the labour market”, creating a need to boost innovation, increase competition and create new jobs. If the government legislates to require employers to pay for non-compete clauses, this could result in a benefit for employers (albeit with a price tag) as it may drive up compliance with this sort of contractual restraint.

Outsourcing, onshoring and disposals

The need to maintain certain outsourced functions has dwindled, especially where offices have been closed, staff footfall has reduced dramatically and/or supply chains and orders have been disrupted. This is leading to the renegotiation of outsourcing contracts, and in some cases their termination, alongside discussions over which party will bear the costs of redundancies arising from reduced service levels. We are increasingly being asked to advise on disputes in this area.

Meanwhile, there is a focus on insourcing, as well as outsourcing. The trend of outsourcing to lower-cost countries was beginning to reverse even before the pandemic, with more companies reported to have started onshoring production. The combined impact of Brexit and the pandemic may accelerate this trend as companies seek to increase their agility, reduce lead times and protect their supply chains. Onshoring can also form part of the responsible business agenda, as companies move to take greater control over labour standards and environmental impact.

At the same time, some companies are continuing to hive-off and dispose of certain activities in order to raise capital or refocus the business on account of significantly changed circumstances. From a buyer’s perspective, this potentially creates opportunities for advantageous deals.

We therefore expect the combined impacts of Covid-19 and Brexit to be felt in various ways in this area throughout 2021.

The rise of collective representation?

The Covid pandemic has meant that many employers have had to engage in a collective redundancy consultation for the first time. Some of those had not previously set up an employee forum, or else had established one with such an informal and limited remit that it was insufficient to make it a “standing body” with which they could engage for this purpose. In contrast, other employers have benefited from having already created a more substantive body. Almost as a by-product, this has enabled them quickly to engage with experienced representatives, rather than delaying consultation to allow employees first to elect who should represent them.

In most cases, employers who were reluctant to consider collective forums have found them to be very useful. In many cases, employers have engaged with them more regularly and extensively than they had originally contemplated and intend to continue doing so as they look to transform resourcing for the post-Covid future.

This may therefore be an opportune time for employers who have not yet gone down this road to consider whether a standing body for collective consultation would be helpful and, if so, what form it should take and what remit it should have. In particular, it would be sensible to consider whether any new forum should have a sufficiently strong remit to engage in consultation “with a view to reaching agreement”, as must take place in the context not only of collective redundancies but also TUPE transfers involving measures.

Last year’s exceptional events have also led to an increase in trade union membership. This coincided with a lowering of the thresholds for requesting a statutory information and consultation body that can legally enforce its rights at the Central Arbitration Committee. Putting in place an appropriately tailored forum might assist employers in resisting moves by unions seeking to interfere in their direct relationships with their own employees. It could thereby help to allow employee relations to continue developing other than under the “shadow of the law” and potential legal complaints.

The impact of Brexit

Brexit is another factor raising major resourcing issues unlike anything employers had to contend with before. Although the UK and EU reached a last-minute trade deal, this does not replicate all of the business advantages of being in the single market. Some firms will be looking to set up an EU base (in Ireland, for example), meaning that some UK employees may be required to relocate. Other employees may ask to relocate to new or existing operations within the EU.

The new immigration system in place from January 2021 is going to make it much more expensive to bring EEA or Swiss workers into the UK, which could have a significant impact on the UK labour market. Employers that agreed temporary overseas remote-working arrangements with employees stuck abroad in the early months of the pandemic are now beginning to consider whether they could rely on remote workers carrying out their role from their home country, without ever needing to work in the UK (an issue we explored in the second article in our series).

Labour market changes brought about by Brexit are also likely to result in employers falling back on some of the more flexible alternative contracting options discussed in the first article in our series.

A final thought

While the combined effect of the Covid-19 pandemic and Brexit is creating unprecedented resourcing challenges for business, there are nonetheless numerous opportunities for employers to exploit. These include changing terms or using alternative contracting options, embracing agile working and initiatives on wellbeing, trust and culture, and reviewing reward packages, post-termination restrictions and collective representation structures (as discussed above).

Above all, this is a moment to be proactive and reassess traditional workplace models and outdated approaches to employment relations. That’s the key to helping protect your business and make it sufficiently adaptable and resilient to withstand whatever might be coming next.

Related Item(s): Employment, Tax, Rewards & Incentives, Cash Plans & Incentives, Trade Unions & Works Councils, BREXIT, Resourcing for 2021 and beyond, Outsourcing, onshoring and disposals, Retaining and incentivising staff, Collective representation

Author(s)/Speaker(s): Lucy Lewis, Lisa Dafydd, Gemma Taylor,

The final instalment of our three-part series of articles exploring resourcing challenges, opportunities and trends in 2021 examines a range of employment issues including reward strategy, outsourcing and collective representation.

Text:

The first article in our series explored some of the immediate options for responding to the challenges of the pandemic, including government support packages, restructuring, changing terms and alternative contracting options. Our second article looked at the trend towards homeworking and other flexible working arrangements and the growing focus on wellbeing, trust and culture as key to recruiting and retaining staff.

In this final article, we share our thoughts on how the current situation is impacting a range of employment-related areas, from post-termination restrictions and reward packages through to outsourcing and collective representation. We also consider how the impact of Brexit may drive employers to consider new resourcing options.

Retaining and incentivising key staff

In economically uncertain times, retaining experienced and proficient employees becomes even more critical for employers. Those which can retain effective and knowledgeable members of staff will stand a better chance than others of continuing to deliver for their customers and clients, and thereby weathering the economic storm. Training and upskilling employees involves significant cost – an investment that will be lost if you cannot retain highly skilled employees. Most likely, a competitor will benefit from your investment instead, particularly if the skills are scarce and so highly valued.

Most employers will adopt a “carrot and stick” approach in order to encourage employees to stay, while safeguarding key interests in the event they choose to leave. 

Until now, the “carrot” has generally been inward-looking, in terms of ensuring an attractive remuneration package. This includes not only salary, benefits and annual bonuses, but also long-term incentive plans (LTIPs) to incentivise loyalty and performance on a more longstanding basis (see our article on long-term employee incentive plans in a recession). Businesses will need to navigate between retaining and motivating key staff and keeping a tight control on cost, so it remains important to ensure remuneration packages are as tax effective as possible.

We have recently seen employers moving away from investing in the pure financial package and instead looking at reward in a more holistic way – including, for example, health and wellbeing related benefits. (This increasing focus on wellbeing, trust and culture, was discussed in the second article in our series.)

The “stick” approach is likely to involve the inclusion of carefully considered and well-drafted restrictive covenants in employment contracts. In some cases, the purpose of such post-termination restraints is to prevent an employee being able to leave and immediately join a competing business. In other situations, the prime purpose is to manage the commercial risk of an employee leaving – for example, by preventing them from soliciting certain clients, customers or other employees for a set period.

Where long-serving employees are concerned, it is a common scenario that their restrictions have not been reviewed and amended they have been promoted and/or their role has evolved. As that can lead to challenges with enforcement, it is important regularly to review the restrictions of key employees to ensure that they are up to date and relevant to the role the individual undertakes. (See our article on the impact of coronavirus on post-termination restrictions.)

The government has recently launched a consultation on reform of non-compete clauses, observing that Covid-19 has had a “profound impact on the labour market”, creating a need to boost innovation, increase competition and create new jobs. If the government legislates to require employers to pay for non-compete clauses, this could result in a benefit for employers (albeit with a price tag) as it may drive up compliance with this sort of contractual restraint.

Outsourcing, onshoring and disposals

The need to maintain certain outsourced functions has dwindled, especially where offices have been closed, staff footfall has reduced dramatically and/or supply chains and orders have been disrupted. This is leading to the renegotiation of outsourcing contracts, and in some cases their termination, alongside discussions over which party will bear the costs of redundancies arising from reduced service levels. We are increasingly being asked to advise on disputes in this area.

Meanwhile, there is a focus on insourcing, as well as outsourcing. The trend of outsourcing to lower-cost countries was beginning to reverse even before the pandemic, with more companies reported to have started onshoring production. The combined impact of Brexit and the pandemic may accelerate this trend as companies seek to increase their agility, reduce lead times and protect their supply chains. Onshoring can also form part of the responsible business agenda, as companies move to take greater control over labour standards and environmental impact.

At the same time, some companies are continuing to hive-off and dispose of certain activities in order to raise capital or refocus the business on account of significantly changed circumstances. From a buyer’s perspective, this potentially creates opportunities for advantageous deals.

We therefore expect the combined impacts of Covid-19 and Brexit to be felt in various ways in this area throughout 2021.

The rise of collective representation?

The Covid pandemic has meant that many employers have had to engage in a collective redundancy consultation for the first time. Some of those had not previously set up an employee forum, or else had established one with such an informal and limited remit that it was insufficient to make it a “standing body” with which they could engage for this purpose. In contrast, other employers have benefited from having already created a more substantive body. Almost as a by-product, this has enabled them quickly to engage with experienced representatives, rather than delaying consultation to allow employees first to elect who should represent them.

In most cases, employers who were reluctant to consider collective forums have found them to be very useful. In many cases, employers have engaged with them more regularly and extensively than they had originally contemplated and intend to continue doing so as they look to transform resourcing for the post-Covid future.

This may therefore be an opportune time for employers who have not yet gone down this road to consider whether a standing body for collective consultation would be helpful and, if so, what form it should take and what remit it should have. In particular, it would be sensible to consider whether any new forum should have a sufficiently strong remit to engage in consultation “with a view to reaching agreement”, as must take place in the context not only of collective redundancies but also TUPE transfers involving measures.

Last year’s exceptional events have also led to an increase in trade union membership. This coincided with a lowering of the thresholds for requesting a statutory information and consultation body that can legally enforce its rights at the Central Arbitration Committee. Putting in place an appropriately tailored forum might assist employers in resisting moves by unions seeking to interfere in their direct relationships with their own employees. It could thereby help to allow employee relations to continue developing other than under the “shadow of the law” and potential legal complaints.

The impact of Brexit

Brexit is another factor raising major resourcing issues unlike anything employers had to contend with before. Although the UK and EU reached a last-minute trade deal, this does not replicate all of the business advantages of being in the single market. Some firms will be looking to set up an EU base (in Ireland, for example), meaning that some UK employees may be required to relocate. Other employees may ask to relocate to new or existing operations within the EU.

The new immigration system in place from January 2021 is going to make it much more expensive to bring EEA or Swiss workers into the UK, which could have a significant impact on the UK labour market. Employers that agreed temporary overseas remote-working arrangements with employees stuck abroad in the early months of the pandemic are now beginning to consider whether they could rely on remote workers carrying out their role from their home country, without ever needing to work in the UK (an issue we explored in the second article in our series).

Labour market changes brought about by Brexit are also likely to result in employers falling back on some of the more flexible alternative contracting options discussed in the first article in our series.

A final thought

While the combined effect of the Covid-19 pandemic and Brexit is creating unprecedented resourcing challenges for business, there are nonetheless numerous opportunities for employers to exploit. These include changing terms or using alternative contracting options, embracing agile working and initiatives on wellbeing, trust and culture, and reviewing reward packages, post-termination restrictions and collective representation structures (as discussed above).

Above all, this is a moment to be proactive and reassess traditional workplace models and outdated approaches to employment relations. That’s the key to helping protect your business and make it sufficiently adaptable and resilient to withstand whatever might be coming next.

Related Item(s): Employment, Tax, Rewards & Incentives, Cash Plans & Incentives, Trade Unions & Works Councils, BREXIT, Resourcing for 2021 and beyond, Outsourcing, onshoring and disposals, Retaining and incentivising staff, Collective representation

Author(s)/Speaker(s): Lucy Lewis, Lisa Dafydd, Gemma Taylor,

The furlough scheme may have been extended to 30 September 2021, but employers are looking ahead to cost-saving measures in the face of ongoing economic challenges.

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We set out below our answers to key questions about options for restructuring the workforce. These cover options for extending furlough, notice and redundancy payment rights during furlough, changing terms and conditions, and dealing with redundancies.

See also our FAQs for employers on the Coronavirus Job Retention Scheme for detailed information about furloughing employees.

There is more information about redundancies in our Inbrief guides on Redundancy and Collective redundancies.

Extending furlough even when the scheme ends

Can we keep employees on furlough even when the extended government scheme has ended?

Yes. The Coronavirus Job Retention Scheme created a form of agreed lay off even where there was no contractual lay-off provision. As a result, provided employees continue to agree to being on furlough, it would be possible to extend the period for they are furloughed. This could reduce pay below the current furlough grant, or even implement furlough on no pay. Employees may be willing to agree to this as an alternative to redundancy. However, you will no longer be able to reclaim salary or other wage costs from the furlough scheme after it has ended, which will of course limit its attractiveness.

If you have a contractual right to lay off without pay, this could be relied on (although such clauses in contracts are quite rare in practice). Lay-off provisions are subject to the implied term of trust and confidence which means, for example, that you should consult with employees first and give reasonable notice of any lay off to avoid being in breach of contract.

There are also specific statutory provisions which provide a right for employees who have been laid off for four or more consecutive weeks, or six weeks in any 13-week period, to claim a statutory redundancy payment in certain circumstances. However, the scheme requires employees to resign in order to receive their redundancy payment.

Changing terms and conditions

Can we reduce hours and pay for employees?

Yes, with employee agreement.

If you recognise a trade union for collective bargaining purposes, you may be able to agree the change with the union – depending on the terms of any collective agreement, this may either be binding on all employees or may at least facilitate individual agreement. If there is no union, individual employee consent should be obtained and evidenced in writing (absent clauses permitting you to impose unilateral reductions, which are extremely rare).

If you are seeking agreement before you have formulated any proposal to dismiss 20 or more employees, a collective redundancy consultation will not be triggered. This means that you must not have formulated a definite plan that is likely to result in dismissals if employees do not agree to the proposed change. If a proposal has already been formulated to dismiss as redundant anyone who does not agree, or to force the change through by dismissing and re-engaging if necessary, then collective consultation will arguably be triggered.

Alternatively, if there is a contractual right to impose short-time working this could be used (subject to consultation and notice).

Can we reduce pay for employees but require them to work the same hours?

Yes – the process is as set out above. It may be more difficult to persuade employees to agree to this. You will need to ensure you explain the rationale, reasons and business cost in detail to minimise employee discontent. You also need to ensure for low paid employees that, if their pay is reduced but their hours are not, you still continue to comply with minimum wage legislation.

What if an employee refuses to agree to the proposed change?

You will need to consult individually with the employee and attempt to explain the reasons and necessity for the proposed change. If the employee still refuses after additional time and further discussion, you will need to decide on whether to impose the change by dismissal and re-engagement on the new terms or adopt different measures. 

Dismissals in these circumstances can be fair, so long as there is a clear business necessity for the change and the employer has followed a fair process. Dismissal and re-engagement in this way will trigger collective consultation requirements where 20 or more dismissals are proposed.

Making redundancies

Is it unfair to make employees redundant while furlough is available?

Employees with two or more years’ service can claim unfair dismissal. Redundancy is a potentially fair reason for dismissal, but it must also be reasonable in the circumstances to dismiss for that reason. There is an argument that it is unfair to make employees redundant when the government-funded furlough scheme is available as an alternative.

However, furlough is not cost neutral for the employer. Even if employees agree to reduce their pay to the amount of the furlough grant, the employer needs to bear the costs of employer’s National Insurance Contributions, pension contributions, holiday pay top-ups and any other benefits unless the employee has agreed to waive them. In addition, employers will be required to contribute 10% of salary for furloughed employees in July 2021, and 20% of salary in August and September 2021.

Also, there remains a question mark over whether it might be contrary to the purposes of the furlough scheme to use the scheme purely to postpone redundancies that are inevitable, i.e. they are going to happen at the end of the scheme irrespective of other circumstances. The original furlough scheme was intended to help employers keep their employees attached to the business so that they could eventually resume active employment. It’s not entirely clear, if it is legitimate for employers to use the scheme to support individuals whose jobs only exist within the furlough scheme and are no longer thought to be viable. There is nothing in the guidance which explicitly says that employers cannot do this, but there is still a risk that it could be regarded as contrary to the purposes of the scheme.

For these reasons, while it is important for employers to consider the availability of the furlough scheme, we do not consider it is necessarily unfair to make employees redundant when furlough is available.

Can we reclaim notice pay under the government furlough scheme?

A payment in lieu of notice cannot be reclaimed under the scheme.

If an employee is “working out” their notice while on furlough, employers cannot claim for any day when an employee is serving statutory or contractual notice from 1 December 2020 onward. This means that the costs of notice pay after 1 December are no longer be covered by the scheme.

How would we calculate notice pay for an employee who is currently furloughed?

If you choose to make a payment in lieu of notice under a clause in the employment contract, you should check what the contract says about the amount. If, for example, it says that pay in lieu of notice should be calculated based on basic pay, this is likely to be interpreted as meaning pre-furlough pay.

If an employee who is currently furloughed is given notice which they are to “work out” (even if they are unable actually to perform work for you), the amount you need to pay them during the notice period can be complicated.

The government made special regulations in July 2020 to require the calculation of notice pay to be based on pre-furlough pay – see our article “New law on redundancy and notice pay for furloughed employees”. These regulations have been updated twice to reflect the extensions of the furlough scheme to 30 April 2021, and we expect they will be updated again to cover the period to 30 September 2021. These regulations effectively require employers to top-up pay to its pre-furlough rate for employees working out their notice if it is the statutory minimum period of notice or less than a week more than that period.

If an employee’s contractual notice period is at least a week more than the statutory minimum period of notice, no such top-up is automatically required. However, since for claim periods starting on or after 1 December 2020 you cannot make claims for employees for days during their notice periods, you should check your furlough agreement to determine their status in light of that and the rate of pay to which they are entitled as a result during their notice period.

How do we calculate statutory redundancy pay for employees on furlough?

Statutory redundancy payments are calculated based on years of service, age, and a week’s pay. For this purpose, a week’s pay is currently capped at £538. Many employees will earn more than this even during furlough, which will mean there is no need to consider a different calculation.

The government made special regulations in July 2020 to require the calculation of statutory redundancy pay to be based on pre-furlough pay – see our article “New law on redundancy and notice pay for furloughed employees”. These regulations have not yet been amended to cover the extension of the furlough scheme, but it seems highly likely that the government will make that amendment shortly.

Redundancy consultation during the pandemic

Do we need to collectively consult with our workforce?

It depends on the number of employees involved. Collective consultation is required where an employer proposes to dismiss 20 or more employees “at one establishment” in a 90-day period for a reason unrelated to the individual, which encompasses both “classic” redundancies and “fire and rehire” exercises aimed at imposing less favourable terms. If fewer than 20 redundancies are anticipated, only individual consultation is required. We always recommend taking advice on your particular circumstances before embarking on collective consultation.

For an explanation of what collective consultation involves, see our inbrief on collective redundancies.

Can we carry out individual and collective redundancy consultation during furlough?

Yes. The guidance does not explicitly state whether collective or individual redundancy consultation can be carried out during the furlough period, or whether it would fall under the prohibition on doing work. However, it is not making money for the employer or providing services, so is most likely permissible. The guidance for employers also says that employee representatives may undertake duties and activities for the purpose of individual or collective representation and that this will not be considered work, which strongly suggests that individual and collective consultation must also be allowed.

You are likely to want to commence collective consultation during furlough if you know that you are likely to need to make redundancies post-furlough. You may also wish to use the time employees spend on furlough to absorb part of the cost of the consultation process.

Can employee representatives be furloughed and continue in their role as a representative?

Yes, where the employee representative is only being consulted in respect of possible redundancies or other topics within their usual remit as an employee representative, such as health & safety. The guidance for employers says that employees who are union or non-union representatives may undertake duties and activities for the purpose of individual or collective representation of employees or other workers while they are on furlough – so long as they are not providing services or generating revenue. The representatives are not providing services to the employer, so this should not fall under the prohibition on doing work while on furlough. 

How do we collectively consult a workforce who are on furlough or remote working?

Coronavirus has created a situation where many employees are on furlough, working from home, self-isolating or practising social distancing. This makes collective consultation a challenge, as it would normally be done in person.

The flexible furlough option may allow some consultation to take place in person on days when employees are working. However, many employees will still be working from home and those on flexible furlough are likely to be in work at different times, meaning remote consultation will still be required even where some employees are attending the workplace.

Previous case law has shown that carrying out information and consultation obligations remotely is permissible, and it is unlikely that this would be regarded as a problem in the current, highly unusual circumstances.

Employers can make use of technology to hold online “town halls” to inform employees about proposed measures and prepare to run several of these to ensure the whole workforce is notified properly rather than via the grapevine.

Collective consultation with employee representatives could be done remotely provided appropriate technology is in place. It could also potentially be done in person with appropriate risk assessments and protective measures and subject to consideration of current government guidance.

If done remotely, you should make sure that all the representatives have the technology required to participate. You should also ensure that only relevant parties receive an invitation to the online meeting, and that the line or portal for hosting it is secure and compliant for data protection purposes. Set a clear protocol in advance about how the meeting will be run.

If employee representatives have not already been elected, employers will need to consider what arrangements they need to make to ensure any election is fair. This may include arranging online voting. The voting process is supposed to be secret so far as reasonably practicable, which can present a challenge when it cannot happen in the physical workplace. Some possible options are:

• Use a third-party online voting platform, which ensures anonymity but may come at a cost.

• Design your own internal system. For example, you could nominate one independent person to run the ballot – although strictly this would not then be a secret election.

• Set up a consultation body in advance, which (provided its mandate is sufficiently clear) can then be used for redundancy consultation later on.

How do we carry out individual consultation with employees who are on furlough or remote working?

First, you need to think about how you will contact your employees and how will you send them relevant paperwork. Do you have their home email addresses (if they no longer have access to office email or never had it), do you have a home/mobile telephone number, and do you know if the employees have access to a computer?

For people without access to a computer, you could post or courier documents. If individuals will be reading emailed documents on a smartphone, consider formatting issues and what type of document to send. 

If you propose to carry out the individual consultation meetings by video conferencing, check the employee (and, if applicable, any person accompanying them) will have access to a computer or smartphone. Alternatively, you can consult by conference call, but bear in mind that it will be harder to see how people are reacting to the news.  If someone is on flexible furlough and in the workplace for some of the time, consider whether some or all of the consultation can happen face-to-face (with appropriate social distancing) on days they are working.

It is a common practice to allow the employee to be accompanied at redundancy consultation meetings (and any appeal meeting) by a colleague or trade union representative, although this is not a statutory right. The furlough guidance for employers has confirmed that acting as an employee representative does not amount to “work”, so colleagues who are furloughed could still act as a companion without risking the furlough grant.

Although you are under no legal obligation to allow the employee to be accompanied by a friend or a family member, this may be allowed under your own policies and procedures or as a discretionary measure in these unusual circumstances. Check the wording of any redundancy policy for any such provisions. In practice, it will be difficult for you to ensure nobody else is present in the room while holding the meeting remotely (especially if this is by phone rather than videoconference) – so it might be sensible to allow a friend or family member to accompany the employee.

Think about the following:

• Ensure that only relevant parties receive an invitation to the online meeting, and that the line or online portal for hosting the meeting is secure and compliant for data protection purposes.

• Ask the employee to attend the virtual meeting from a private and quiet room if possible where they will not be disturbed, and discuss their particular circumstances with them.

• Ask parties to speak clearly, let them ask questions when necessary and confirm their understanding. Parties should be asked to mute themselves when they are not speaking to avoid any distractions. Make use of online tools, such as screen sharing, to refer to documents.

• Explain that you will be taking notes of the meeting and will share a copy of the minutes/notes with them. Remind them that they may also take their own notes during the meeting.

• At the start of the meeting, ask the employee to confirm that they (or any companion) are not recording the meeting. If you are concerned about this, remind them that they do not have a legal right to record the meeting and that this may be viewed as a breach of trust and confidence as well as misconduct. You could also explain that covert recording may be in breach of data protection legislation. (Remember, though, that recording may be a reasonable adjustment for someone with a physical or mental impairment.)

• During the meeting, check with the employee whether they need to take a break in the same way as you would during an in-person meeting.

• Allow employees time to speak privately to their companion during the meeting.

Can employers use the “special circumstances” defence to a failure to consult about collective redundancies?

This is a difficult and fact-sensitive area, so you should always seek advice on your specific situation.

Section 188(7) of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) provides a defence to a failure to collectively consult where there are “special circumstances which render it not reasonably practicable” for the employer to comply with most of its requirements. Importantly, the main exception is that the defence does not apply to an employer failing to allow employee representatives access to the affected employees and appropriate accommodation and facilities to perform their role during whatever process does take place, such as providing them with any necessary technology to take part in an online consultation process and a way to have some kind of meetings with their constituents. 

There is no definition of “special circumstances”, but an impending insolvency situation on its own is not sufficient. The case law also indicates that it is difficult to rely on this defence to justify a complete failure to consult except in the most extreme circumstances. If a business has cash to keep it going and is making redundancies to remain profitable (or to make a smaller loss), it will be practicable to consult, even though it may be costly – consultation is regarded as a “cost of business”. The existence of the furlough scheme, coupled with other support for business will make it difficult to rely on the special circumstances defence to justify no or short collective consultation. It is therefore important that if employers decide to make collective redundancies, or changes to terms by way of a “fire and rehire” process, they should comply with the collective consultation requirements under TULRCA as best they reasonably practicably can.

The defence may work best if there is a procedural failing, so long as the employer takes what steps it reasonably can. The measures an employer took in the particular circumstances it was facing may also reduce the size of the penalty award for failing to consult, even if it is found to have breached the consultation requirements. The starting point is 90 days’ uncapped pay, with the employer required to show why that amount should be reduced – so taking all practicable steps is very important in reducing what might otherwise be a large penalty.

Immigration issues

What immigration issues should we take into account when considering furlough and redundancies?

When you are considering redundancies (or changes such as lay-offs or salary reductions), you should assess whether this has any effect on the immigration status of any of the employees affected. Any of them who holds a Tier 2 or 5 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.

Related Item(s): Employment, Redundancy & Restructuring, Redundancy & restructuring, Covid 19 – Coronavirus, Employment

Author(s)/Speaker(s): Colin Leckey, David Hopper,

On 3 March 2021 the Chancellor, Rishi Sunak, announced a range of immigration measures designed to help highly skilled and skilled international talent come to the UK to support business growth, particularly for scale-up businesses, innovative businesses and intra-company transfers, and to contribute to the advancement of key industry sectors such as academia, science, research and technology. There are also commitments to improving the system for business users, and to marketing the UK’s visa offering more effectively.

Text:

We summarise and comment on these below.

‘Elite points-based visa’ for highly skilled migrants

The budget reaffirms the Government’s intention to introduce the previously announced points-based visa for highly skilled migrants, and states this will be in place by March 2022.

A ‘scale-up’ stream will be included within the highly skilled visa category. This will be aimed at allowing individuals with a job offer from a pre-approved UK scale-up business to access a fast-track process. It is not clear from the budget statement whether this will be fast-track visa processing, fast-track settlement or both.

Recent press reports have referred to the scale-up stream as a ‘fintech visa’, geared towards boosting this particular sector as suggested in the recent Kalifa review of UK FinTech. However the budget itself does not appear to limit the type of scale-up business that may be eligible for approval by the Government. No details have been released yet about what criteria businesses will need meet to qualify for approval, however it is positive that potentially it may be available to support a wide range of high-growth businesses.

More generally, the Government will want to put measures in place to avoid a repeat of the failed Tier 1 (General) route. One of the problems encountered in the past with unsponsored schemes for highly skilled migrants has been the entry of participants into low-skilled work in the UK. The mention of having a job offer to qualify under the scale up stream may indicate that this could be one way the Government hopes to be able to control the skill level at which highly skilled individuals enter the UK labour market under the new visa.

Streamlining the Global Talent visa for some applicants

Holders of certain international prizes and winners of certain scholarships will automatically be eligible under the route, as will participants in recognised programmes for early promise.

The Global Talent route can be document-heavy and bureaucratic, and this welcome change will make approval much quicker and straight-forward for the people covered by it.

Reviewing the Innovator visa

The budget confirms the Innovator visa will be reviewed to make it easier for those with appropriate skills and experience to set up an innovative business in the UK.

This is another positive development, although it remains to be seen how far the Government will go in liberalising the route. So far, the Innovator visa has proven unattractive to established entrepreneurs, as it is necessary in most cases to agree for a business incubator or seed funder to take an investment interest in the enterprise. Currently, it is only available to a very limited pool of individuals and the eligibility for extension and settlement are so onerous as to make it an unattractive option.

Since the removal of the 10% ownership limit under the Skilled Worker route in December last year, it may be that irrespective of any reforms to the Innovator route, Skilled Worker may prove to be a more accessible, straight-forward and less risky option for business owners, not least because there is no requirement for the business to be rubber-stamped as innovative.

Launching a new Global Business Mobility visa

The Migration Advisory Committee was commissioned in October last year to undertake a general review of the Intra-Company routes as well as considering an expansion of the Representative of Overseas Business route to allowing teams to come to the UK to set up a UK entity or branch. The MAC is due to deliver its report by the end of October 2021.

The budget confirms that the resulting new immigration category will be called the Global Business Mobility visa, and that it will launch by spring 2022. This will be a short time-frame for civil servants to work with in response to the MAC report. It should however be achievable as the fundamental aims and international commitments underpinning the route are already known.

It will be interesting to see how this route interacts with the sponsorship system as the current Intra-Company routes require a sponsor licence, whereas the Representative of an Overseas business category does not.

Modernising the immigration sponsorship system

This is another policy that has previously been announced, however the budget confirms there will be a ‘delivery roadmap’ published during the summer of 2021. Once this is available, there should be some more concrete indication of when reforms to the sponsorship system will be made effective, including how and when the outdated sponsor management system will be replaced with newer technology.

User support and marketing measures

Practical support will be provided to small firms needing to use the visa system for the first time. This recognises that more businesses, and, in particular, Small and Medium Enterprises, will now need to engage with the visa system following the end of free movement between the UK and the EEA/Switzerland.

Initiatives will also be put in place to raise awareness of the UK’s visa offering and to encourage applications. These include expanding the Global Entrepreneur Programme and running visa-related marketing campaigns. The budget falls short of promising to build an overseas talent network, however this will be explored.

For further information on these announcements, or to discuss current immigration options, please get in touch with a member of our Immigration Team.

Related Item(s): Immigration & Global Mobility

Author(s)/Speaker(s): Andrew Osborne, Joanna Hunt, Kathryn Denyer,

On 3 March 2021 the Chancellor, Rishi Sunak, announced a range of immigration measures designed to help highly skilled and skilled international talent come to the UK to support business growth, particularly for scale-up businesses, innovative businesses and intra-company transfers, and to contribute to the advancement of key industry sectors such as academia, science, research and technology. There are also commitments to improving the system for business users, and to marketing the UK’s visa offering more effectively.

Text:

We summarise and comment on these below.

‘Elite points-based visa’ for highly skilled migrants

The budget reaffirms the Government’s intention to introduce the previously announced points-based visa for highly skilled migrants, and states this will be in place by March 2022.

A ‘scale-up’ stream will be included within the highly skilled visa category. This will be aimed at allowing individuals with a job offer from a pre-approved UK scale-up business to access a fast-track process. It is not clear from the budget statement whether this will be fast-track visa processing, fast-track settlement or both.

Recent press reports have referred to the scale-up stream as a ‘fintech visa’, geared towards boosting this particular sector as suggested in the recent Kalifa review of UK FinTech. However the budget itself does not appear to limit the type of scale-up business that may be eligible for approval by the Government. No details have been released yet about what criteria businesses will need meet to qualify for approval, however it is positive that potentially it may be available to support a wide range of high-growth businesses.

More generally, the Government will want to put measures in place to avoid a repeat of the failed Tier 1 (General) route. One of the problems encountered in the past with unsponsored schemes for highly skilled migrants has been the entry of participants into low-skilled work in the UK. The mention of having a job offer to qualify under the scale up stream may indicate that this could be one way the Government hopes to be able to control the skill level at which highly skilled individuals enter the UK labour market under the new visa.

Streamlining the Global Talent visa for some applicants

Holders of certain international prizes and winners of certain scholarships will automatically be eligible under the route, as will participants in recognised programmes for early promise.

The Global Talent route can be document-heavy and bureaucratic, and this welcome change will make approval much quicker and straight-forward for the people covered by it.

Reviewing the Innovator visa

The budget confirms the Innovator visa will be reviewed to make it easier for those with appropriate skills and experience to set up an innovative business in the UK.

This is another positive development, although it remains to be seen how far the Government will go in liberalising the route. So far, the Innovator visa has proven unattractive to established entrepreneurs, as it is necessary in most cases to agree for a business incubator or seed funder to take an investment interest in the enterprise. Currently, it is only available to a very limited pool of individuals and the eligibility for extension and settlement are so onerous as to make it an unattractive option.

Since the removal of the 10% ownership limit under the Skilled Worker route in December last year, it may be that irrespective of any reforms to the Innovator route, Skilled Worker may prove to be a more accessible, straight-forward and less risky option for business owners, not least because there is no requirement for the business to be rubber-stamped as innovative.

Launching a new Global Business Mobility visa

The Migration Advisory Committee was commissioned in October last year to undertake a general review of the Intra-Company routes as well as considering an expansion of the Representative of Overseas Business route to allowing teams to come to the UK to set up a UK entity or branch. The MAC is due to deliver its report by the end of October 2021.

The budget confirms that the resulting new immigration category will be called the Global Business Mobility visa, and that it will launch by spring 2022. This will be a short time-frame for civil servants to work with in response to the MAC report. It should however be achievable as the fundamental aims and international commitments underpinning the route are already known.

It will be interesting to see how this route interacts with the sponsorship system as the current Intra-Company routes require a sponsor licence, whereas the Representative of an Overseas business category does not.

Modernising the immigration sponsorship system

This is another policy that has previously been announced, however the budget confirms there will be a ‘delivery roadmap’ published during the summer of 2021. Once this is available, there should be some more concrete indication of when reforms to the sponsorship system will be made effective, including how and when the outdated sponsor management system will be replaced with newer technology.

User support and marketing measures

Practical support will be provided to small firms needing to use the visa system for the first time. This recognises that more businesses, and, in particular, Small and Medium Enterprises, will now need to engage with the visa system following the end of free movement between the UK and the EEA/Switzerland.

Initiatives will also be put in place to raise awareness of the UK’s visa offering and to encourage applications. These include expanding the Global Entrepreneur Programme and running visa-related marketing campaigns. The budget falls short of promising to build an overseas talent network, however this will be explored.

For further information on these announcements, or to discuss current immigration options, please get in touch with a member of our Immigration Team.

 

Related Item(s): Immigration & Global Mobility

Author(s)/Speaker(s): Andrew Osborne, Joanna Hunt, Kathryn Denyer,

Tier 2 General migrants must not have a shareholding of more than 10% in their limited company sponsor, however the Skilled Worker route does not include this restriction. So how can a Tier 2 General migrant take advantage of this change if they are offered a shareholding that would take them above the 10% threshold?

Text:

Unfortunately, the change in the Rules does not operate to remove the shareholding restriction from existing Tier 2 General migrants. This is because, if they do not continue to meet the requirements of the Rules their visa was granted under (including the maximum 10% shareholding requirement) their visa could be cancelled.

However, individuals in relevant Tier 2 categories (including Tier 2 Sportsperson and Tier 2 Minister of Religion as well as Tier 2 General) can apply for and be granted immigration permission as a Skilled Worker if they wish to increase their shareholding above 10%.

Perhaps more importantly, those who previously could not use the Tier 2 route because they were a significant shareholder can now apply under the Skilled Worker route. Some of those who could not use Tier 2 previously may have had to use the Tier 1 Entrepreneur route, which is an inflexible option for entrepreneurs due to its various restrictions. Alternatively, they may have had to re-arrange shareholdings or defer their move to the UK. The lifting of the maximum shareholding requirement for the Skilled Worker route should open doors to more businesses and business founders wishing to work in the UK.

If you have any queries about this topic, 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,