Author’s note: I always give careful thought before publishing offensive ads in articles or including them in presentations, but unfortunately, I think it is often essential so that the reader or audience can fully appreciate the story. Nevertheless, I should like to apologise for any offence that is caused by the ads included in this piece.

Text:

This October has marked Black History Month, so as an advertising lawyer, I thought it would be interesting to delve into my personal archive of ads and try to ascertain whether there are any patterns in the ads that have caused racial offence over the last couple of decades. Is the occurrence of ads causing racial offence getting more prevalent? How does the UK compare with the rest of the world? And finally, who should be called out as the biggest culprit of all when it comes to publishing racist ads?

As someone who is pale, male and if not stale, then rapidly approaching my Best Before date, I should start by making an acknowledgement. I am not well placed to judge whether an ad is racially offensive, particularly to Black people, as I’m not Black. In thinking about the history of Black people in advertising, I have been struck, however, by the way in which British advertising has successfully incorporated members of other ethnic groups into advertising campaigns that have been effective in both their creative and commercial ambitions, but also beloved by the ethnic group being portrayed.

The paradigm example is the Beattie campaign featuring Maureen Lipman and created by Abbott Mead Vickers for British Telecom in the early 1980’s. I remember seeing the ad with the teenage boy sitting on the stairs, relaying his not very impressive O-level results to his grandmother, Beattie. She seizes on the fact that he has achieved a pass in sociology. “An ology” she declares. “You get an ology, you’re a scientist!” Across the entire series of ads, Jews laughed with the advertising because they recognised their own mothers and grandmothers. Gentiles laughed with us, not at us. My only concern at the time was that Maureen Lipman’s characterisation of Beatie was so uncannily reminiscent of my own grandmother that I began to wonder whether BT were tapping our phone, looking for inspiration.

It is difficult to think of an ad or a campaign that has pulled off the same trick with the Black community. There have been campaigns that have been led by Black actors, such as Sir Lenny Henry for Premier Inn, but he was very much being himself, rather than a character, with no reference to his ethnicity or the culture of the Caribbean. On re-watching an old TV ad from 1981 for “Lilt, with the totally tropical taste” I was shocked to realise that while the reggae inspired soundtrack remains as fresh as the pineapples and grapefruit used to make the drink, there is not a single Black person in the ad. Even the waiter handing the glasses of the cool, refreshing Lilt to the beautiful young Caucasian people appears to be white, although it’s hard to be sure as only his forearms are in shot. But the cultural appropriation is clear enough.

Perhaps the greatest success that has been achieved by British advertising reflects something that was mentioned by Baroness Floella Benjamin, DBE, when she appeared recently on Dessert Island Discs (16^th October, 2020). Dame Floella recounted a story of when she was presenting Play School in 1976. She asked the producer whether the illustrations for their children’s stories could include not only white kids, but also Black, Asian and Chinese kids, “because I want the children out there to feel that they belong to that culture.” The change was made that day, and Dame Floella continues, “because if you don’t see yourself, how do you know you belong? How do you know you’re important?”

Reflecting on these comments, I think it is reasonable to say that in more recent years, the more frequent casting of Black people in advertising has hopefully helped to progress this sense of belonging, particularly when cast as the ‘heroes’ of a TV commercial, and not just as walk-on artists in the background.  For example, my personal favourite of the long series of fantastic Christmas ads created by adam&eveDDB for John Lewis is “Buster the Boxer” from 2016, with the CGI animals bouncing on the trampoline in the garden on Christmas morning. The family that feature in the ad happen to be Black, but they could be of any ethnicity. Hopefully, this casting is a good example of what Dame Floella describes as signalling that Black people belong to British Council. Sadly, and worryingly, things appear to have gone backwards since 2016.

Where were we at the start of the millennium?

It is difficult to find many reports of ASA investigations into the depiction of race in advertising until 1998 and therefore dangerous to make assumptions about the reasons for this absence. Of course, a higher proportion of advertising was on television or radio, and therefore subject to mandatory pre-vetting. Most non-broadcast advertising was either in newspapers or Out-of-Home, and even without pre-vetting, the media owners were well aware of their compliance obligations under the Advertising Codes. For many years, the British Codes of Advertising have prohibited ads that contain anything that is likely to cause serious or widespread offence, particularly in relation to certain specific characteristics, including race. The focus of the ICC Code is slightly different, however, prohibiting ads that incite or condone any form of discrimination, including that based on ethnicity.

The Commission for Racial Equality has been at the vanguard of confronting the issue of racism through advertising for decades. Some of their excellent, hard hitting work can still be seen on the website of the History of Advertising Trust. The CRE’s TV and cinema ad from 1996, “Them” is still very powerful, and ‘remainers’ might be forgiven for wishing it had been broadcast again before the EU Referendum in 2016.

Unfortunately, however, one of the first published ASA adjudications on the issue of race comes around this time, in 1999.

This was a poster ad that was part of a campaign by the CRE to make people confront their own attitudes to racial stereotypes. The original teaser just had the same image and the headline, “Scared?” The reveal then had the sub-heading, “You should be. He’s a dentist”  and identified the advertiser as the CRE. The campaign provoked one of the largest number of complaints ever in this area, 84, with people not only complaining about the racism of the teaser, but also the denigration of dentists and the danger of discouraging children from visiting the dentist. The CRE argued that the ad was an ironic and humorous challenge to stereotypes. There appears to have been no formal adjudication by the ASA, and it is difficult to get to the bottom of what happened in this case, but the upshot was that the CRE became the first advertiser (along with TalkRadio, by way of contrast), to be required to have their posters pre-vetted for 2 years by CAP Copy Advice – a procedure that had really been introduced to deal with the notorious FCUK campaign of the time. However, it seems that the ASA and CAP were uncomfortable with the use of shock tactics, which is a long-running bugbear, and perhaps about the lack of prior consultation.

Have commercial advertisers tried to challenge racism?

Yes, but with varying degrees of success.

By far the most successful advertiser in this vein has been Benetton. This simple Benetton ad from 1996 must be one of the most memorable anti-racism ads of all time.

Unfortunately, however, even Benetton came unstuck from time-to-time, and I understand that the ad below of the three kids of different ethnicities caused considerable offence in Saudi Arabia, where it is considered offensive to display an internal organ. In this case, being the tongue.

More recently, other advertisers appear to have made genuine efforts to challenge stereotypes. Even assuming they were working in good faith, and there is no reason to think otherwise, they have ultimately come unstuck.

In 2016, Nicofresh published this poster ad for an e-cigarette product on various Out-of-Home sites, but only in Belfast. So while there were only 6 complaints, it is worth considering that in the context of a media schedule with a limited geography. Of these complaints, 6 people complained that the ad was racist, implying that an interracial relationship was taboo, and 4 of these 6 also thought that it was offensive to imply than an inter-generational relationship was taboo. Nicofresh’s defence was essentially, ‘yes, that’s the point’. Our product means that smoking will no longer be taboo, just like these relationships are no longer taboo. The ASA seem to have been very hard on Nicofresh in this case, as well as on the ‘Average Consumer’, who apparently would have missed what seems to be a fairly clear message. There is also no reason to think that Nicofresh were blowing a dog-whistle. What would they possibly have to gain?

And on the subject of dog-whistles, the sad fact is that some of the most egregious and deliberately racist ads of the last 20 years, if not of all time, have not merely escaped censure by the ASA, but have managed to avoid the application of the Advertising Codes altogether, because they have been ‘political ads’ published in the course of an election campaign. Or in this case, a referendum. That referendum.

Have any advertisers been more ambitious in using Black and Caribbean culture?

Yes, but unfortunately attempts to go beyond simple casting on a ‘neutral’ basis in ads have back-fired badly, as illustrated by the Cadbury’s campaign for Trident Gum in 2007.

The expensively produced TV and cinema ad, with high production values, featured a West Indian dub poet waxing lyrical about the virtues of the new Trident gum, and finishes with him on a yellow tourist amphibious ‘duck boat’ passing the Houses of Parliament, shouting “mastication for the nation.” It seems inconceivable that with their advertiser, or their agency, JWT, has any intention of being racist. Cadbury had not only sought the views of the Afro-Caribbean community and the general public during the campaign’s creative development, but being a TV ad, they had also obtained pre-clearance from the Broadcast Advertising Clearance Centre, now Clearcast. Although Cadbury admitted that a few people had found the ad offensive during their consumer testing, that cannot have prepared them for the tidal wave of 519 complaints, propelling the ad into second place in the list of the most complained about ads of 2007. Although the ASA appeared to accept that Cadbury and JWT had acted in good faith, they found that “The stereotype depicted in the ads had, unintentionally, caused deep offence to a significant minority of viewers and that many of those who complained to us were concerned that the negative stereotype could be perpetuated.”

Unfortunately, it is hard to avoid the conclusion that this case may have had a chilling effect on any more ambitious attempts to give Black and Caribbean culture a more prominent role in British advertising.

Overall, is the issue of racism in advertising getting better or worse?

Sadly, it is difficult to avoid the conclusion that that situation has become worse in the last few years.

Some examples just leave you wondering what were they thinking of? Or even, were they thinking at all? Or was there no adult in the room when they decided to publish the ad. This is particularly true of ads published on companies’ own websites, which do not go through any process of pre-vetting. In several cases, the court of public opinion, as exercised through social media, has adjudicated so quickly that the ads have been withdrawn before the ASA have had an opportunity to investigate. 

This notorious ad by H&M featuring a Black boy wearing a hoodie with the legend “Coolest Monkey in the Jungle” was quickly withdrawn by H&M when it was pointed out to them on social media, quickly and in no uncertain terms, that the ad was wildly inappropriate.

While some commentators were prepared to give H&M the benefit of the doubt, accepting that young creatives are ‘colour blind’ and failed to spot the issue in advance, this ad for Gucci is just incredible.

It is quite incredible that in 2019, a major corporation could publish that advert and fail to spot the allusions to ‘black face’ which had only recently been the subject of considerable controversy, following the publication of some old photos of Justin Trudeau, the Canadian Prime Minister, who had worn ‘Black face’ on a number of occasions in his past. The creative director denied that the ad was intended to be racist.

Unfortunately, however, it is pretty difficult to deny the racist intent behind a couple of ads that the ASA have investigated in recent years, and particularly since 2016.

This regional press ad, with very limited circulation in the Purbeck Gazette in June 2016 (what else was happening in June 2016?), was for The Ginger Pop Shop, and not only featured a ‘golly’, but also the headline “English Freedom”. Despite the tiny media, 2 people complained to the ASA that the depiction was racist and offensive. The advertiser’s defence, as dutifully recounted by the ASA, is at best unconvincing, and at worst, insincere. The ASA also noted that “the inclusion of the words “ENGLISH FREEDOM” in the ad was likely to contribute to that offence, because in combination with the image it could be read as a negative reference to immigration or race. We therefore concluded that the ad was likely to cause serious or widespread offence.” This is a reminder that even a small number of complaints, such as one or two, can give rise to an upheld complaint, and that offence can be serious, even if confined to both the readers of the Purbeck Gazette.

The murder of George Floyd and the rise of Black Lives Matter has also provoked what might be a cynical backlash or might be a cynical attempt to ride on the back of movement. Neither explanation is particularly attractive. The final example in this section brings us right to date, with the ASA adjudication being published on 23^rd September 2020, just over 5 weeks ago.

A car leasing company, LINGsCars, posted a Facebook ad in June 2020. The ad included the image “BLACK CARS MATTER. I ASKED HOLLY FOR A HEADLINE FOR THIS A4…AND SHE SAID: ‘ONCE YOU GO BLACK, YOU NEVER GO BACK!’”, with an image of a black raised hand fist with a wristband displaying the Audi logo and a black Audi car. (For the avoidance of doubt, the ad had nothing to do with Audi or its advertising agency.) Once again, the ASA rejected the advertisers wholly unpersuasive explanation, and concluded that using the slogan and iconography to draw attention to an ad for a car trivialised the serious issues raised by Black Lives Matter. In addition, the line, ‘Once you go black, you never go back’ objectified and fetishized black men.

So how do we compare with the rest of the world?

My personal consumption of advertising outside the United Kingdom is pretty limited, and mainly confined to watching lengthy advertising breaks on CNN in hotel rooms in the United States, while waiting for brief snippets of news. My not very scientific and anecdotal evidence is that Black people are seen more often in British advertising than in US advertising, and that while you may see Black couples on TV ads in the States, you are more likely to see a mixed race couple in a British ad. However, I have no data to back up this perception, and I would be happy to be proved wrong.

But probably the most breath-takingly racist ad that I have ever seen is a TV Commercial from China.

The story board above explains the ad. We start with an attractive young Chinese woman who, for reasons that were never explained, is visited in her apartment by a young Black man, whose voice betrays his roots as a likely lad from the East End. I’d guess Poplar, but possibly Bethnal Green. Although attracted to the young man, she is clearly perturbed by his ethnicity, so she somehow manages to put him into her top-loading washing machine, inserts the soap powder being advertised, and hey presto, he comes out Chinese. Her dilemma is resolved. You have to watch it to appreciate the fully awfulness of it.

So finally, what is the most racially offensive British ad of all time, and who was the advertiser?

This is more than just a numbers game. If it was, the winner would be the Trident ad, based on the number of complaints to the ASA, at 519.

However, in Cadbury’s defence, even the ASA accepted that they had not intended to cause racial offence, and the racism was inadvertent.

Also, there are some political parties, such as UKIP, of whom expectations are low in this regard. There are other examples mentioned above of marginal advertisers being deliberately provocative or mainstream advertisers being inattentive.

The ad, however, by the Home Office, comes from the UK Government, of whom it is reasonable to expect better. And the intention was clear: this was part of Theresa May’s attempt to create a hostile environment, which ultimately led to the shameful Windrush scandal, and brings us back full circle to families of Black Britons, such as Baroness Floella Benjamin, whose family came here – perfectly legally – from Trinidad in the 1950’s.

The ASA’s adjudication into the 224 complaints is long and complicated, dealing with 5 issues, 2 of which concern offensiveness, being the use of the phrase ‘Go Home’, the potential to incite racial hatred, and 3 of which concern the factual accuracy of various claims made in the ad.

The adjudication was published on 9^th October 2013, well before the full horror of the Windrush scandal had unfolded. The surprising thing now, however, in the light of the that scandal, which resulted in the subsequent Home Secretary, Amber Rudd, being metaphorically thrown under the bus, is that while the ASA upheld 2 of the 3 complaints about factual accuracy, the 2 complaints about causing racial offence were rejected. The ASA accepted that the use of ‘Go Home’ was contextualised by the reference to illegal immigrants. Of course, at the time, the ASA was not to know that many of the people who were subsequently threatened with deportation would end up proving that they are here perfectly legally. The ASA also accepted that the reference to people facing deportation was targeted at illegal immigrants, not legal ones. To be fair to the ASA, its not their fault that the Home Office couldn’t tell the difference.

So where are we now?

It is clear that there is still a major problem with racism in advertising. Although many mainstream advertisers are helping to create an inclusive culture where young Black Britons will be encouraged to feel that they are part of the culture and they belong here, attempts to really celebrate Black and Caribbean culture in our advertising have so far not succeed. Meanwhile other advertisers seek to exploit or create division, and others just lazy or inattentive to the offence that they cause, which is arguably even worse.

So, while we’ve come along way from the days when the ‘golly’ was used to advertise marmalade, or Lilt ads were shot in the Caribbean without a single Black person, it is clear that we still have a very long way to go.

Related Item(s): Advertising & Marketing, Brands and IP newsnotes – issue 5, Retail, Hospitality & Leisure

Author(s)/Speaker(s): Brinsley Dresden,

Author’s note: I always give careful thought before publishing offensive ads in articles or including them in presentations, but unfortunately, I think it is often essential so that the reader or audience can fully appreciate the story. Nevertheless, I should like to apologise for any offence that is caused by the ads included in this piece.

Text:

This October has marked Black History Month, so as an advertising lawyer, I thought it would be interesting to delve into my personal archive of ads and try to ascertain whether there are any patterns in the ads that have caused racial offence over the last couple of decades. Is the occurrence of ads causing racial offence getting more prevalent? How does the UK compare with the rest of the world? And finally, who should be called out as the biggest culprit of all when it comes to publishing racist ads?

As someone who is pale, male and if not stale, then rapidly approaching my Best Before date, I should start by making an acknowledgement. I am not well placed to judge whether an ad is racially offensive, particularly to Black people, as I’m not Black. In thinking about the history of Black people in advertising, I have been struck, however, by the way in which British advertising has successfully incorporated members of other ethnic groups into advertising campaigns that have been effective in both their creative and commercial ambitions, but also beloved by the ethnic group being portrayed.

The paradigm example is the Beattie campaign featuring Maureen Lipman and created by Abbott Mead Vickers for British Telecom in the early 1980’s. I remember seeing the ad with the teenage boy sitting on the stairs, relaying his not very impressive O-level results to his grandmother, Beattie. She seizes on the fact that he has achieved a pass in sociology. “An ology” she declares. “You get an ology, you’re a scientist!” Across the entire series of ads, Jews laughed with the advertising because they recognised their own mothers and grandmothers. Gentiles laughed with us, not at us. My only concern at the time was that Maureen Lipman’s characterisation of Beattie was so uncannily reminiscent of my own grandmother that I began to wonder whether BT were tapping our phone, looking for inspiration.

It is difficult to think of an ad or a campaign that has pulled off the same trick with the Black community. There have been campaigns that have been led by Black actors, such as Sir Lenny Henry for Premier Inn, but he was very much being himself, rather than a character, with no reference to his ethnicity or the culture of the Caribbean. On re-watching an old TV ad from 1981 for “Lilt, with the totally tropical taste” I was shocked to realise that while the reggae inspired soundtrack remains as fresh as the pineapples and grapefruit used to make the drink, there is not a single Black person in the ad. Even the waiter handing the glasses of the cool, refreshing Lilt to the beautiful young Caucasian people appears to be white, although it’s hard to be sure as only his forearms are in shot. But the cultural appropriation is clear enough.

Perhaps the greatest success that has been achieved by British advertising reflects something that was mentioned by Baroness Floella Benjamin, DBE, when she appeared recently on Desert Island Discs (16th October, 2020). Dame Floella recounted a story of when she was presenting Play School in 1976. She asked the producer whether the illustrations for their children’s stories could include not only white kids, but also Black, Asian and Chinese kids, “because I want the children out there to feel that they belong to that culture.” The change was made that day, and Dame Floella continues, “because if you don’t see yourself, how do you know you belong? How do you know you’re important?”

Reflecting on these comments, I think it is reasonable to say that in more recent years, the more frequent casting of Black people in advertising has hopefully helped to progress this sense of belonging, particularly when cast in leading roles, not just as walk-on artists in the background. For example, my personal favourite of the long series of fantastic Christmas ads created by adam&eveDDB for John Lewis is “Buster the Boxer” from 2016, with the CGI animals bouncing on the trampoline in the garden on Christmas morning. The family in the ad happen to be Black, but they could just as easily be of any ethnicity. Hopefully, this casting is a good example of what Dame Floella describes as signalling that Black people belong to British culture. Sadly, as I shall describe later, things appear to have gone backwards since 2016.

Where were we at the start of the millennium?

 It is difficult to find many reports of ASA investigations into the depiction of race in advertising until 1999 and therefore dangerous to make assumptions about the reasons for this absence. Of course, a higher proportion of advertising was on television or radio, and therefore subject to mandatory pre-vetting. Most non-broadcast advertising was either in newspapers or on Out-Of-Home billboards, and even without pre-vetting, the media owners were well aware of their compliance obligations under the Advertising Codes. For many years, the British Codes of Advertising have prohibited ads that contain anything that is likely to cause serious or widespread offence, particularly in relation to certain specific characteristics, including race. The focus of the ICC Code is slightly different, however, prohibiting ads that incite or condone any form of discrimination, including that based on ethnicity.

The Commission for Racial Equality has been at the vanguard of confronting the issue of racism through advertising for decades. Some of their excellent, hard hitting work can still be seen on the website of the History of Advertising Trust. For example, the CRE’s TV and cinema ad from 1996, “Them” is still very powerful, and ‘Remainers’ might be forgiven for wishing it had been broadcast again before the EU Referendum in 2016, some 20 years later.

Unfortunately, however, one of the first published ASA adjudications on the issue of race comes around this time, in 1999.

This poster was part of a campaign by the CRE to make people confront their own attitudes to racial stereotypes. The original teaser just had the same image and the headline, “Scared?” The reveal then had the sub-heading, “You should be. He’s a dentist” and identified the advertiser as the CRE. The campaign provoked one of the largest number of complaints ever in this area, 84, with people not only complaining about the racism of the teaser, but also the denigration of dentists and the danger of discouraging children from visiting the dentist. The CRE argued that the ad was an ironic and humorous challenge to stereotypes. There appears to have been no formal adjudication by the ASA, and it is difficult to get to the bottom of what happened in this case, but the upshot was that the CRE became the first advertiser to be required to have their posters pre-vetted for 2 years by CAP Copy Advice – a procedure that had really been introduced to deal with the notorious FCUK campaign of the time. However, it seems that the ASA and CAP were uncomfortable with the use of shock tactics, which is a long-running bugbear, and perhaps about the lack of prior consultation.

Have commercial advertisers tried to challenge racism?

Yes, but with varying degrees of success.

By far the most successful advertiser in this vein has been Benetton. This simple Benetton ad from 1996 must be one of the most memorable anti-racism ads of all time.

Unfortunately, however, even Benetton came unstuck from time-to-time, and I understand that the ad below of the three kids of different ethnicities caused considerable offence in Saudi Arabia, where it is considered offensive to display an internal organ, including the tongue.

More recently, other advertisers appear to have made genuine efforts to challenge stereotypes. Even assuming they were working in good faith, and there is no reason to think otherwise, they have ultimately come unstuck.

In 2016, Nicofresh published this poster ad for an e-cigarette product on various Out-Of-Home sites, but only in Belfast. There were only 6 complaints, but that is in the context of a media schedule with a very limited geography. All the complainants felt the ad was racist, implying that an interracial relationship was taboo, and 4 of them also thought that it was offensively ageist to imply than an inter-generational relationship was taboo. Nicofresh’s defence was essentially, ‘yes, that’s the point’. Our product means that smoking will no longer be taboo, just like these relationships are no longer taboo. The ASA seem to have been very hard on Nicofresh in this case, as well as on the ‘Average Consumer’, who apparently would have missed what seems to be a fairly clear message. There is also no reason to think that Nicofresh were blowing a dog-whistle. What would they possibly have had to gain?

And on the subject of dog-whistles, the sad fact is that some of the most egregious and deliberately racist ads of the last 20 years, if not of all time, have not merely escaped censure by the ASA, but have managed to avoid the application of the Advertising Codes altogether, because they have been ‘political ads’ published in the course of an election campaign. Or in this case, a referendum.

Have any advertisers been more ambitious in using Black and Caribbean culture?

Yes, but unfortunately attempts to go beyond simple casting on a ‘neutral’ basis in ads have back-fired badly, as illustrated by the Cadbury’s campaign for Trident Gum in 2007.

The expensive TV and cinema ad, with high production values, features a West Indian dub poet waxing lyrical about the virtues of the new Trident gum, and finishes with him on an amphibious yellow tourist ‘duck boat’ passing the Houses of Parliament, shouting “mastication for the nation”. It seems inconceivable that with their advertiser, or their agency, JWT, had any intention of being racist. Cadbury had not only sought the views of the Afro-Caribbean community and the general public during the campaign’s creative development, but being a TV ad, they had also obtained pre-clearance from the Broadcast Advertising Clearance Centre, now Clearcast. Although Cadbury admitted that a few people had found the ad offensive during their consumer testing, that cannot have prepared them for the tidal wave of 519 complaints, propelling the ad into second place in the list of the most complained about ads of 2007. Although the ASA appeared to accept that Cadbury and JWT had acted in good faith, they found that “The stereotype depicted in the ads had, unintentionally, caused deep offence to a significant minority of viewers and that many of those who complained to us were concerned that the negative stereotype could be perpetuated.” If memory serves me correctly, I do remember being shocked by the ad the first time that I saw it, and I wonder whether the creatives behind it simply became anaesthetised to its’ impact in the course of working on it for so long.

Unfortunately, it is hard to avoid the conclusion that this case may have had a chilling effect on any more ambitious attempts to give Black and Caribbean culture a more prominent role in British advertising.

Overall, is the issue of racism in advertising getting better or worse?

Sadly, it is also difficult to avoid the conclusion that that situation has become worse in the last few years.

Some examples just leave you wondering what were they thinking of? Or even, were they thinking at all? Or was there no adult in the room when they decided to publish the ad. This is particularly true of ads published on companies’ own websites, which do not go through any process of pre-vetting. In several cases, the court of public opinion, as exercised through social media, has adjudicated so quickly that the ads have been withdrawn before the ASA have had an opportunity to investigate.

This notorious ad by H&M featuring a Black boy wearing a hoodie with the legend “Coolest Monkey in the Jungle” was quickly withdrawn by H&M when it was pointed out to them on social media, quickly and in no uncertain terms, that the ad was wildly inappropriate.

While some commentators were prepared to give H&M the benefit of the doubt, accepting that young creatives are ‘colour blind’ and failed to spot the issue in advance, this ad for Gucci is just incredible.

It defies belief that in 2019, a major corporation could publish that advert and fail to spot the allusions to ‘black face’ which had only recently been the subject of considerable controversy, following the publication of some old photos of Justin Trudeau, the Canadian Prime Minister, who had worn ‘Black face’ on a number of occasions in his past. The creative director denied that the ad was intended to be racist.

It is also difficult, if not impossible, to deny the racist intent behind a couple of ads that the ASA have investigated in recent years, and particularly since 2016.

This regional press ad, with very limited circulation in the Purbeck Gazette in June 2016 (what else was happening in June 2016?), was for The Ginger Pop Shop, and not only featured a ‘golly’, but also the headline “English Freedom”. Despite the tiny media, 2 people complained to the ASA that the depiction was racist and offensive. The advertiser’s defence, as dutifully recounted by the ASA, is at best unconvincing, and at worst, insincere. The ASA also noted that “the inclusion of the words “ENGLISH FREEDOM” in the ad was likely to contribute to that offence, because in combination with the image it could be read as a negative reference to immigration or race. We therefore concluded that the ad was likely to cause serious or widespread offence.” This is a reminder that even a small number of complaints, such as one or two, can give rise to an upheld complaint, and that offence can be serious, even if combined to both the readers of the Purbeck Gazette.

The murder of George Floyd and the rise of Black Lives Matter has also provoked what might be a cynical backlash or even a cynical attempt to ride on the back of movement. Neither explanation is particularly attractive. The final example in this section brings us right up to date, with the ASA adjudication being published on 23rd September 2020, just over 5 weeks ago.

A car leasing company, LINGsCars, posted a Facebook ad in June 2020. The ad included the image “BLACK CARS MATTER. I ASKED HOLLY FOR A HEADLINE FOR THIS A4…AND SHE SAID: ‘ONCE YOU GO BLACK, YOU NEVER GO BACK!’”, with an image of a black raised hand fist with a wristband displaying the Audi logo and a black Audi car. (For the avoidance of doubt, the ad had nothing to do with Audi or its advertising agency.) Once again, the ASA rejected the advertisers wholly unpersuasive explanation, and concluded that using the slogan and iconography to draw attention to an ad for a car trivialised the serious issues raised by Black Lives Matter. In addition, the line, ‘Once you go black, you never go back’ objectified and fetishized black men.

So how do we compare with the rest of the world?

My personal consumption of advertising outside the United Kingdom is pretty limited, and mainly confined to watching lengthy advertising breaks on CNN in hotel rooms in the United States, while waiting for brief snippets of news. My not very scientific and anecdotal evidence is that Black people are seen relatively more often in British advertising than in US advertising. And while you may see Black couples on TV ads in the States, you are more likely to see a mixed race couple in a British ad. However, I have no data to back up this perception, and I would be happy to be proved wrong.

But probably the most breath-takingly racist ad that I have ever seen is a TV Commercial from China.

The story board above explains the ad. We start with an attractive young Chinese woman who is visited in her apartment by a young Black man, who is a painter and decorator. His voice betrays his roots as a likely lad from the East End. I’d guess Poplar, but possibly Bethnal Green. Although attracted to the young man, she is clearly perturbed by his ethnicity, so she somehow manages to put him into her top-loading washing machine, inserts the soap powder being advertised, and hey presto, he comes out Chinese. Her dilemma is resolved.

So finally, what is the most racially offensive British ad of all time, and who was the advertiser?

This is more than just a numbers game. If it was, the winner would be the Trident ad, based on the number of complaints to the ASA, at 519.

However, in Cadbury’s defence, even the ASA accepted that they had not intended to cause racial offence, and the racism was inadvertent.

Also, there are some political parties, such as UKIP, of whom expectations are low in this regard. There are other examples mentioned above of marginal advertisers being deliberately provocative or mainstream advertisers being inattentive.

This ad, however, by the Home Office, comes from the UK Government, of whom it is reasonable to expect better. And the intention was clear: this was part of Theresa May’s attempt to create a ‘hostile environment’, which ultimately led to the shameful Windrush scandal, and brings us back full circle to families of Black Britons, such as Baroness Floella Benjamin, whose family came here – perfectly legally – from Trinidad in the 1950’s.

The ASA’s adjudication into the 224 complaints is long and complicated, dealing with 5 issues, 2 of which concern offensiveness, being the use of the phrase ‘Go Home’ and the potential to incite racial hatred in areas visited by the vans, and 3 of which concern the factual accuracy of various claims made in the ad.

The adjudication was published on 9th October 2013, well before the full horror of the Windrush scandal had unfolded. The surprising thing now, however, in the light of the subsequent scandal, which resulted in May’s successor as Home Secretary, Amber Rudd, being metaphorically thrown under the bus, is that while the ASA upheld 2 of the 3 complaints about factual accuracy, the 2 complaints about causing racial offence were rejected. The ASA accepted that the use of ‘Go Home’ was contextualised by the reference to illegal immigrants. Of course, at the time, the ASA was not to know that many of the people who were subsequently threatened with deportation would end up proving that they are here perfectly legally. The ASA also accepted that the reference to people facing deportation was targeted at illegal immigrants, not legal ones. To be fair to the ASA, its not their fault that the Home Office couldn’t tell the difference.

So where are we now?

It is clear that there is still a major problem with racism in advertising. Although many mainstream advertisers are helping to create an inclusive culture where young Black Britons will be encouraged to feel that they are part of the culture and they belong here, attempts to really celebrate Black and Caribbean culture in our advertising have not succeed so far. Meanwhile other advertisers seek to exploit or create division, and others are just lazy or inattentive to the offence that they cause.

So, while we’ve come along way from the days when the ‘golly’ was used to advertise marmalade, or Lilt ads were shot in the Caribbean without a single Black person, it is clear that we still have a very long way to go. 

Related Item(s): Advertising & Marketing, Brands and IP newsnotes – issue 5, Retail, Hospitality & Leisure

Author(s)/Speaker(s): Brinsley Dresden,

Covid-19 is causing many employees to ask if they can work from “home” for an extended period in an overseas country – for example, because it is their home nation or their family is based there. This article explains the potential legal issues and how to avoid the traps.

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Employers should consider a variety of issues, including tax, social security, immigration and employment implications, before agreeing to an employee’s request to work from home when “home” is not in the UK. We look at each of these issues below before explaining what practical steps you can take to minimise the risks.

Tax and social security implications of working temporarily abroad

From a UK perspective, the UK employer should continue to deduct income tax under the PAYE system in accordance with the employee’s PAYE code notwithstanding that the employee is temporarily working overseas. If it is anticipated that the employee will be working overseas for at least a complete UK tax year, they may apply to HMRC for a No Tax PAYE code which, if issued, will authorise the employer to pay the employee without PAYE deductions. In addition, the employer should continue to deduct employee national insurance contributions (NICs) and pay employer NICs.

You will need to consider, however, whether the employee’s stay in the host country creates risks of income tax or social security liability in that country – or even the risk that you (as the employer) are regarded as having created a permanent establishment there. Several tax authorities have issued concessions in the light of Covid-19, but not all have done so, and it will be important to establish the rules in place in the relevant host country. We briefly outline the issues below.

Income tax may be payable in host country

The starting point is that the host country has primary taxing rights over the employment income that the employee earns while physically working in that country. However, if there is a double tax treaty (DTT) between the UK and the host country, the employee may be exempt from income tax there if certain conditions are satisfied including:   

• The employee is not a tax resident in the host country under the DTT. If the employee is tax resident in the UK and in the host country under each country’s domestic law, their residence status is determined in accordance with the DTT by reference to their personal circumstances.
• The number of days the employee is present in the host country over a 12-month period (however briefly and irrespective of the reason) must not exceed 183 days.

The UK has a DTT with most countries, including all 27 EU countries and most other major world economies. In practice, this means that a short stay abroad in many locations is not going to result in the employee becoming liable for host country income tax.

Remember, though, that employees who have already spent other periods in the host country in the same 12-month period (e.g. visiting family) may reach the 183-day threshold sooner than you think. Also, the full details of the conditions can differ from DTT to DTT (particularly the period over which the 183-day test must be satisfied), and the employer and/or employee may still have obligations in the host country even if the DTT applies. (For example, the employer may need to register with local authorities as an employer and/or report on the income that is being paid to the employee.). It is therefore important to understand the local position.

If the employee does become subject to tax in the host country but remains UK tax resident, they will remain subject to UK income tax on their worldwide income but should be able to obtain credit for some or all the tax they pay in the host country. They will, however, need to complete the appropriate tax declarations, which could be a complex process.

Social security position is complex and depends on what agreements are in place

The general rule is that employee and employer social security obligations arise in the country in which the employee is physically carrying out their duties.

In the European Economic Area (EEA) and Switzerland, there are currently exceptions to this general rule where it may be possible, depending on the circumstances, for the UK employee and their employer to continue to pay UK NICs and not pay social security contributions in the host country. Broadly, the exceptions are if the employee is sent abroad by their employer for up to two years, or the employee is working in two or more countries. Unless local advice confirms it is unnecessary (for example, because a Covid-19 exemption applies in that country), it is crucial to apply for an A1 (or E101) certificate from HMRC (or the social security authorities in the employee’s country of residence if different) confirming the position.

Note that (other than for Ireland where a separate agreement has been negotiated) these rules are due to expire on 31 December 2020, when the current Brexit implementation period ends. Existing A1/E101 certificates which have an expiry date after 31 December 2020 will be honoured, provided the situation remains unchanged. However, the position for new arrangements remains to be seen and will depend on whether there is a trade agreement between the UK and EU which replicates any of these features.

Outside the EEA and Switzerland, the position will depend on whether there is a reciprocal agreement between the host country and the UK. In countries where there is a reciprocal agreement, such as the USA, Korea and Japan, it is possible for an employee to remain within the UK system (and not pay local social security contributions) for up to five years if they have a valid certificate of coverage.

In other countries where no agreement exists, such as China, India and Australia, the UK employer must continue to deduct employee UK NICs and pay employer NICs for the first 52 weeks of the arrangement. Further, there may also be a liability to pay social security contributions in the host country in addition to any contributions that are made in the UK.

Risk of creating a permanent establishment is low but should be considered

In some situations, there will be a risk that the employee’s activities or presence in the host country will create a permanent establishment for the employer in that country. This would be the case if, for example, the employee has a sales or business development role and is habitually exercising an authority to conclude contracts in the name of the employer while in the host country.

If a permanent establishment is created, the profits attributable to that establishment would be subject to corporate tax in that country. It would also mean that the income tax exemption in the DTT would not apply. While this may be less of a problem if you already have established operations in the host country, it could be a real headache if you do not.

Assuming the working-from-home arrangement is only short term, it would be difficult for the tax authorities to argue that a permanent establishment had been created. The longer the arrangement continues, however, the greater the risk – particularly if the employee routinely negotiates the principal terms of contracts with customers which are simply “rubber-stamped” without amendment by UK employees.

Immigration implications of working abroad temporarily

Immigration permission is generally not required for business visits. Depending on the employee’s activities, it may be possible to characterise their stay as a business visit – for example, if their activities are limited to those typically undertaken during business trips (e.g. meetings and training). However, restricting an employee’s activities in this way is unlikely to be practical for many employees and, in general, the longer an employee works without permission, the more difficult it will be to characterise their stay as a business visit. In some countries, work itself is prohibited even as a business visitor.

Currently, if the employee is a UK or EEA national, they have the right to live and work in an EEA country (although this position will change for UK nationals from 31 December 2020 when the current Brexit implementation period ends).

If an employee is not an EEA national and/or wishes to work from a non-EEA country, you will need to consider what restrictions may be in place. For example, if they want to work in Hong Kong but don’t have permission to stay there indefinitely, they should not undertake any work without permission, even for a limited period and even if the employing entity is not a Hong Kong entity. As with tax and social security, some countries have implemented emergency Covid-19 legislation that will affect the normal immigration position, but this is not the case everywhere.

You may also need to consider any immigration issues that could arise on the employee’s return to the UK. For example, EU nationals should consider whether to secure settled or pre-settled status in the UK before they travel overseas. Other non-British nationals should consider whether their absence from the UK may affect their visa, or their eligibility to apply for other types of status in future where absences are assessed, such as indefinite leave to remain, permanent residence or naturalisation as a British citizen.

Employment law and data privacy implications of working abroad temporarily

On top of the tax, social security and immigration implications explained above, there are various other employment law and data privacy considerations.

Mandatory employment protections may apply

If employees live and work abroad, even for short periods, they can become subject to the jurisdiction of that other country and start to benefit from the applicable local mandatory employment protections. These may include minimum rates of pay, paid annual holidays and – perhaps most importantly in the event of a dispute – rights on termination. What protections, if any, an employee acquires will depend on the country in question. 

Within the EEA, there is also the Posted Workers Directive (PWD) to consider. This applies where an employee is “posted” from one undertaking or establishment to another cross-border within the EEA (and, until 31 December 2020, the UK). Changes to the PWD, which must be implemented by the end of July, mean that employees will be entitled to the same mandatory pay as comparable employees in the host location.

The PWD itself was not designed to cover the situation of an employee working from home temporarily in another EEA country, and it would not be directly engaged unless you opt for a formal secondment to a local group company or ask the employee to work on a contract for a local client. However, the local implementation of the PWD may nonetheless end up capturing this situation.

For example, in Belgium the local implementation of the PWD requires that all employment, remuneration, working terms and conditions and collective bargaining agreements that have been declared generally binding apply as of day one to any employee working temporarily in Belgium. This is also true of the UK, where employees have certain minimum statutory rights from day one. This can be a complicating factor, particularly if a dispute or termination scenario arises and the employee asserts that they have employment rights in another jurisdiction.

Be careful about transferring data

If an employee’s role involves processing personal data, this could give rise to data protection issues, especially if the employee is requesting to work from a country outside of the EEA which is not subject to the General Data Protection Regulation and other EU data privacy laws.

Local health and safety protections may apply

UK employers have a duty to protect the health, safety and welfare of their employees, which includes providing a safe working environment when they are working from home. If an employee works from home abroad, you should also ensure that it is compliant with any local health and safety requirements. For example, in the Netherlands, employers must provide employees with the equipment needed to ensure a safe working environment which in some cases might involve making a contribution or purchasing relevant equipment.

Employees will also need to comply with applicable public health guidance (e.g. quarantine periods) both in the host country and on their return to the UK.

How to minimise the risks

Given the current situation, you will no doubt want to be flexible when it comes to accommodating requests to work from home overseas, but you will also want to minimise the risks. Depending on how many requests you expect to receive, you may even want to consider developing a short policy to ensure that these situations are dealt with consistently and fairly. It is possible that you will receive more such requests in future, as employees look to take advantage of increased remote-working opportunities to ask if they can work abroad for a short period on a regular basis.

The key practical steps for minimising the risks are as follows:

• Only accept requests if the employee’s role can be performed effectively remotely and can be done lawfully from the country in question.
• The shorter the period the employee is working abroad, the smaller the risks are likely to be. Consider only approving requests for a short, time-limited duration where the employee’s expected return date is clearly documented.
• Always take expert local advice on any tax, social security, immigration and employment obligations you may have in the host country, and on any Covid-19 concessions that have been issued. The employee may also need their own advice.
• Much will depend on the identity of the host country and the nationality of the employee. For the time being, working in the EEA is generally more straightforward but this will change after 31 December 2020 when the Brexit implementation period comes to an end.
• Check what data processing the employee will be doing, and that this can be carried out lawfully in line with your usual policies.
• Agree the terms of any temporary overseas working arrangement and record them in writing. Ideally, these should clarify that:
  • the employee will be liable for any additional income taxes or employee social security which may be charged because of their decision to work for a short period in an overseas location (and that the employer is authorised to make additional deductions or seek reimbursements, if necessary, for this purpose)
  • the employee will be responsible for any personal tax declarations that may need to be made
  • the employment contract remains subject to UK law and jurisdiction
  • the employee is still working solely for the UK business
  • the employee does not have the authority to enter into contracts with local customers while in the host country and should not hold themselves out as having such an authority
  • the employee takes responsibility for ensuring they have the necessary technology and arrangements in place to enable them to work effectively
  • the employee accepts that they are working from home at their own risk and that the employer will not be liable for any loss they suffer due to their request being approved
  • the employee must comply with all applicable public health guidance in both in the country to which they travel and in the UK.

Related Item(s): Employment, Covid 19 – Coronavirus, Employer & employee relations, Immigration & Global Mobility, Tax for Employers & Executives, Workplace Data Privacy, Employment

Author(s)/Speaker(s): Colin Leckey, Rosie Moore,

From 1 December 2020 there will be a new immigration system in the UK. It will apply to EEA/Swiss (‘EEA’) nationals from 1 January 2021. Employers need to start preparing for these changes now, including understanding the proposed new rules, checking recruitment plans and budgets, obtaining or reviewing a sponsor licence and assisting staff with applications under the EU Settlement Scheme.

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The below timeline outlines the areas that employers need to consider and suggests timeframes for taking action from September 2020 onwards.

Inform your current EEA employees and their family members about their eligibility for the EU Settlement Scheme and British citizenship

 

Now, if you haven’t already, so the relevant employees can easily prove their UK immigration status and plan the timing of any British citizenship application.

Why?

Current EEA employees and their family members who are eligible but do not apply to the scheme by 30 June 2021 will lose their right to live and work in the UK under free movement law. Aside from the obvious business disruption and anxiety  this would cause, applications under the UK’s immigration system come at a significant cost, whereas applications under the EU Settlement Scheme are free. Making sure your employees are aware of their eligibility for Pre-Settled or Settled Status under the scheme, and thinking about the timing of upcoming moves of EEA nationals to the UK can save money in the long term.

The end of the transition period also has implications for how and when EEA nationals and their family members may be able to apply for British citizenship, with it being beneficial for some individuals to ensure their application for British citizenship is submitted by 31 December 2020.

See our webinar and Q&A on Brexit and the EU Settlement Scheme for further information.

We also highlight the potential pitfalls to avoid with the EU Settlement Scheme, particularly when the circumstances of the COVID-19 pandemic are factored in. See our article here on the six pitfalls and suggestions on how to avoid them.

Finally, we have prepared a simple scenario infographic of what employers need to consider if they are looking to hire an EEA national or family member of an EEA national in now or following the end of the transition period on 31 December 2020. Download it here.

Need more detailed assistance?

Under the Brexit strand of our Immigration Solutions for HR, you can pick and mix from a range of options to help you navigate the EU Settlement Scheme including our handy FAQ guide, specific training sessions and advice surgeries for your EEA staff.

We are also able to assist individuals with EU Settlement Scheme and British citizenship applications.

Get in touch with a member of our Immigration team to discuss putting together the right tools for your business.

Update your HR policies to include remote working and remote right to work checks.

 

Why?

All UK employers have a responsibility to ensure that their employees have the right to work in the UK before they start work and throughout their employment. Carrying out a right to work check properly will shield you from liability for a civil penalty if you are found to have inadvertently employed somebody who does not have the right to work in the UK. The requirements remain in place, however certain temporary allowances having been made due to COVID-19 (which we cover here). HR teams need to stay on top of COVID-19 right to work compliance to avoid being exposed to illegal working penalties.

Need more detailed assistance?

Our Immigration Solutions for HR provide a full overview of the requirements for right to work compliance.

We can also arrange bespoke training sessions for your HR team to upskill them in carrying out compliant checks or do keep a look out for our event on right to work checks in December.

Get to grips with the new system. How will it work? Who will it apply to? How much will it cost?

 

Why?

Businesses will need to familiarise themselves with the implications of the end of free movement and the new immigration system to avoid losses in productivity and talent, as well as minimising cost. This will only be possible if employers are aware of the actions they need to take to adjust their recruitment and employee retention strategies.

The existing routes for sponsoring workers will be significantly reformed. For skilled workers, some of the existing requirements such as resident labour market testing will be removed, and it will be possible to sponsor skilled workers for jobs at A-level equivalent rather than degree level equivalent. There will also be lower salary thresholds and the introduction of ‘tradeable’ points-scoring criteria. See our overview article for further information about the main changes.

Need more detailed assistance?

Our Immigration Law Academies are a one-stop-shop for learning about the future immigration system. Our next online academy is being held on 23 and 24 November, find out more here, or get in touch with a member of our Immigration team to arrange for bespoke training.

Review HR processes to ensure that compliance standards are met.

 

Why?

The Home Office sets stringent compliance standards for employers of migrants, and once they have been breached, it is often impossible to correct them retrospectively. Reviewing HR processes to ensure compliance with sponsorship and right to work obligations will give you the certainty required to focus your efforts on obtaining and retaining talent. 

Need more detailed assistance?

As part of our Immigration Solutions for HR, our Immigration team can offer training, compliance guides and mock audits of your existing HR and right to work processes to analyse compliance, identify any areas of risk, suggest improvements and prepare you for a real Home Office audit.

You may consider that carrying out a sponsorship mock audit and/or right to work mock audit would be a useful exercise if you need to renew or expand your sponsor licence, particularly as the Home Office has now resumed sponsor compliance visits.

Review or apply for a sponsor licence if you anticipate recruiting from the EEA and the rest of the world from January 2021.

 

Before October 2020 to ensure that a new or expanded licence is obtained before the new system goes live. Sponsor licence applications can take up to eight weeks to process.

Why?

The Home Office has written to sponsors to confirm that renewals can be submitted earlier than the normal month ahead of expiry. We anticipate that the queues for consideration of sponsor licence applications will only grow longer as we move towards the end of the year, because many sponsors’ licences are due for renewal if they originally became a sponsor when the Points Based System was launched in 2008. By applying in the coming months, you will beat the inevitable rush at the end of the year and avoid suffering with delays to new hires as a result. 

Need more detailed assistance?

Our Immigration team has a wealth of experience in advising on and assisting with sponsor licence applications and can help you with any queries if you are new to the process.

Review international recruitment processes to develop an efficient mechanism for analysing skills requirements, shortage occupations and SOC codes for sponsored workers.

 

Why?

An out-of-date recruitment strategy will increase the risk that relationships with existing employees and new hires will be damaged if mistakes are made. Adapting early will give your recruitment team confidence they understand the new processes, saving the business headache, time and money.

Need more detailed assistance?

Consider whether you require training on what jobs will be eligible for sponsorship under the new system and the criteria that will need to be met.

If so, get in touch with a member of our immigration team to explore how we might help. As an indication, you can view our training brochure here.

We also offer a handy compliance guide for sponsors of workers, which includes insight into how best to handle SOC code allocation and revision of skills requirements.

Review whether a non-sponsored working visa route may be suitable for current and potential employees.

 

Identify relevant employees before November 2020 to allow time for the full range of options to be analysed before the new system is implemented.

Why?

Existing employees with upcoming visa expiries, and prospective employees due to start work next year may be eligible for an expanded range of non-sponsored immigration categories under the new system.

Global Talent, Innovator and Start-Up visas provide skill-specific routes to live and work in the UK, while Youth Mobility and UK Ancestry visas are available for some individuals. With more non-sponsored working routes set to be introduced, including a new route for Hong Kongers, companies should be aware of the immigration options available to their current and potential employees. Not only will this allow for improved recruitment strategies, but the absence of fees specific to sponsorship means that these routes can be cheaper.

Need more detailed assistance?

If you need to explore the options that might be available to existing workers and new hires under the new regime, get in touch with our immigration team. We are able to advise on and assist with any necessary applications.

Consider the timing of initial, extension and switching applications for current and potential employees.

 

Identify relevant employees before November 2020 to allow for applications to be processed under the most beneficial arrangements where appropriate.

Why?

The requirements of the current and new systems are different, and in some cases it may be beneficial to defer planned applications until the new arrangements are in place. Examples of where this may be the case are where resident labour market testing would currently be required for a Tier 2 (General) application but would not for a Skilled worker application, or where switching will be allowed under the new system but not the current one. In other cases it may be necessary or beneficial to go ahead with planned applications under the current system. Failure to identify relevant employees early enough to submit applications in the most beneficial way may result in the individual being unable to continue working in the UK for a period of time, or may delay their future eligibility for settlement.

Need more detailed assistance?

If you are looking to explore the options available to your employees in the new regime, contact a member of our immigration team. We will be able to assist with any necessary applications.

Upskill your HR team on sponsor licence management and the requirements of the new system.

 

Before December 2020 so that they are ready to go in December 2020.

Why?

Delays to new hires and early mistakes in recruitment processes can lead to additional cost and missed compliance duties.

 

Need more detailed assistance?

Our Sponsoring Workers  guidance provides an overview of sponsor licence management and compliance requirements.

We are alternatively able to arrange bespoke training for HR teams.

Stay ahead of the curve with changes and updates.

 

Always. Immigration policies normally have at least two major updates per year in April and October, however the pace of change has significantly increased in recent years. Significant adjustments will continue to be necessary as the post-Brexit immigration system is established, so we anticipate frequent updates throughout 2021 and beyond.

Why?

Falling behind on the requirements of hiring and retaining international talent can happen quickly in a constantly changing legal landscape. This can lead to missed opportunities and mistakes that are stressful, costly and time-consuming to deal with.

Need more detailed assistance?

Sign up to our email updates to remain ahead of the curve. 

 

You can download a timeline reminder of the areas to be aware of as we countdown to the new immigration system 2020.

 

Related Item(s): Immigration & Global Mobility, Immigration Solutions for HR, BREXIT, Immigration

Author(s)/Speaker(s): Andrew Osborne, Stephen OFlaherty,

Attachment: Lewis Silkin – The countdown for the new UK immigration system 2021 – are you ready

Despite the EU Settlement Scheme (EUSS) being publicised as being simple and straightforward, there are many potential pitfalls for the unwary, particularly when the circumstances of the COVID-19 pandemic are factored in. To avoid them, it will be important for individuals to be aware of the scheme and to get to grips with it before the end of this year. This is because in some cases, assessments and actions will need to be completed by then, despite main deadline for the scheme not being until 30 June 2021.

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This article sets out some of the potential pitfalls and suggestions for how to avoid them.

1. People not being aware of the scheme and when they need to apply or take other actions

The Home Office’s latest statistics show that by 30 September 2020 over 4 million people have applied under the EUSS, but the total number of people who are eligible to apply is currently unknown.

As the scheme is an application scheme rather than a registration scheme, those who are currently living in the UK and need to apply but fail to secure their status under it will have no lawful immigration status in the UK beyond 30 June 2021. The Home Office will be able consider late applications with a reasonable excuse, however individuals who apply out of time will not have the right to work, rent or to access free healthcare until such time as their application is approved.

The 30 June 2021 deadline also applies to individuals currently living abroad who acquired permanent residence status in the UK less than five years ago. As permanent residence status is lost after a continuous absence from the UK of two years, it is highly likely that some individuals who are in fact eligible to apply may think the scheme does not apply to them.

The situation can also be more complex for family members who may potentially fall within the scope of the scheme, but who need to take action by 31 December 2020 to secure their eligibility. For example, in many cases the relevant family relationship must be established by 31 December 2020.

A recent report by the Migration Observatory outlines a range of reasons why people may fail to secure status under EUSS, which includes people who are still not aware of the scheme at all, or who think that it does not apply to them.

There are also potential issues that may arise where employers, landlords or others are not aware of the grace period from 1 January 2021 to 30 June 2021, or that EUSS status in many cases will only be verifiable online. Where an eligible person has not yet obtained status under the EUSS, or cannot present physical documentation confirming their status under the scheme, there is a risk that they may incorrectly have employment or rental accommodation refused or terminated, or they may be denied other services.

Actions to take to avoid issues arising:

• Employers can minimise potential disruption to their business by sending periodic firmwide communications with information on the scheme and supporting members of their workforce to apply. This support can range from providing signposting to more detailed information to arranging advice sessions or supporting the cost of immigration assistance for the process.

• Employers with European offices may choose to include information on EUSS as well as on frontier worker permits as part of communications relating to Brexit

• Individuals can choose not to wait until the grace period to make their application, ensure they read the guidance from the Government in their approval letter (which they will receive by email) on how their status can be verified, and share this information with relevant third parties

2. Applying under EUSS when this is not necessary

Some EEA national children born in the UK may be British by birth and should therefore not make an application under EUSS. This is because such children have the right of abode in the UK and are not subject to the Immigration Rules.

Actions to take to avoid issues arising:

• Check whether an EEA national child is a British citizen by birth

• Consider making a British passport application for a child who is a British citizen, in order to evidence their British nationality and facilitate their travel to and from the UK after the end of the transition period

3. People not being lawfully in the UK during the post-transition ‘grace period’

Draft regulations published on 21 September 2020 confirm the Government’s intention to allow EEA nationals and their family members who are lawfully resident in the UK by 31 December 2020 to be covered by a grace period to enable them to apply under EUSS after the end of the transition period. The grace period will last from the end of the transition period on 31 December 2020 until 30 June 2021. It also extends beyond 30 June 2021 where an individual has an EUSS application or related appeal outstanding.

The problem for some people however is that the benefit of the grace period will not apply to those whose residence in the UK is not in line with the requirements of the current Immigration (European Economic Area) Regulations 2016. Obvious examples of people who would be excluded are students and the economically self-sufficient who do not hold comprehensive sickness insurance.

The consequence of not being covered by the grace period is that a person will be exposed to hostile environment measures until such time as they are granted leave under the EU Settlement Scheme. This includes not being allowed to work, rent private accommodation or access free healthcare.

The actions to take to avoid issues arising:

• Ensure comprehensive sickness insurance is in place by 31 December 2020 for individuals who are students or economically self-sufficient

• Submit applications under the EU Settlement Scheme as soon as possible, with a view to minimising or eliminating the time the applicant is in the UK without lawful status

4. Applicants not understanding residence requirements for settled status

If a person with pre-settled status spends more than six months in any 12-month period outside the UK it will break the continuity of their residence for settlement eligibility purposes. There is an exception that a single absence of up to 12 months for an important reason for example childbirth, serious illness, study, vocational training or an overseas work posting can be ignored. Compulsory military service, being abroad as a Crown servant, armed forces member or their family member will also be ignored.

The Home Office has not yet produced any specific policy on how absences due to COVID-19 will be treated for the purpose of settlement under the EU Settlement Scheme, however it is possible that this will be produced at some point in the future.

It is however clear that as long as a fresh continuous residence period is started by 31 December 2020 following a break in continuous residence, it is possible to make a further application for pre-settled status by 30 June 2021. Otherwise, where continuous residence has been broken, it would be necessary to qualify for an extension of stay under one of the categories of the new UK immigration system or depart the UK before the expiry of the pre-settled status.

Actions to take to avoid issues arising:

• Review absences in the lead up to 31 December 2020

• Ensure a fresh period of residence in the UK commences by 31 December 2020 if continuous residence has been broken

• Make a further application for pre-settled status by 30 June 2021

5. Applicants not meeting the residence requirements for naturalisation

The residence requirements for naturalisation are different from the requirements for settlement, and this should not be ignored for those who wish to obtain British citizenship, particularly in view of the travel and other disruptions caused by the COVID-19 pandemic.

In recognition of the effect the pandemic is having on international travel and in particular absences from the UK, on 2 September 2020 the Home Office published an update to its naturalisation guidance. The update confirms that where an applicant has absences from the UK of between 480 to 900 days during the qualifying period for naturalisation (or between 300 and 540 days for applicants with a British spouse), their excess absences may be ignored if they were unable to return to the UK due to a global pandemic.

Absences of more than 100 days but no more than 180 days in the final year of the qualifying period may also be ignored if the applicant was unable to the UK due to a global pandemic. There is also discretion to ignore a higher level of final year absences in limited circumstances.

In most cases, applicants will also be required to have established their home, employment, family and finances in the UK.

Actions to take to avoid issues arising:

• Understand what the residence requirements are for naturalisation ie eligibility may be adversely affected if the applicant spends more than 450 days outside the UK during the five year qualifying period, or 270 days over the three year qualifying period (for those with a British spouse or civil partner), or more than 90 days outside the UK during the 12 months before the application

• Record and monitor absences from the UK

• Avoid non-essential international travel outside the UK until travelling conditions become more predictable

• Consider whether absences from the UK during the COVID-19 pandemic are due to an inability to return to the UK, or preference – in the latter case it may be that excess absences will not be ignored

6. Applicants not understanding the implications of the end of the transition period for a naturalisation application

Naturalisation applications for people with a UK permanent residence document can be submitted 12 months after the date the Home Office has recognised on the permanent residence approval letter, however the Home Office has confirmed that individuals who have a permanent residence document will not be able to apply for naturalisation based on this after 31 December 2020 if they have also been granted settled status under EUSS. They must wait until at least 12 months has elapsed since they were granted settled status. Naturalisation applicants also must build in time to prepare for and pass the Life in the UK Test unless they are exempt from this requirement.

Individuals who have a British citizenship application pending on 30 June 2021 (the main in-country deadline for applications under EUSS) must make an application under the EUSS by 30 June 2021, otherwise they will be considered to be an overstayer.

Actions to take to avoid issues arising:

• Submit any naturalisation application relying on a permanent residence document before 31 December 2020 if eligible

• Submit an application for settled status under the EUSS by 30 June 2021 if an application for naturalisation is still pending at that point

If you are an employer wanting more information on how you can support your EEA workforce in the lead-up to the end of the transition period or beyond, please take a look at our Immigration Solutions for Brexit. If you are an individual or have a specific query on any of the issues raised in this article, please contact a member of our Immigration Team.

Related Item(s): Immigration & Global Mobility, Immigration, BREXIT

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

Despite the EU Settlement Scheme (EUSS) being publicised as being simple and straightforward, there are many potential pitfalls for the unwary, particularly when the circumstances of the COVID-19 pandemic are factored in. To avoid them, it will be important for individuals to be aware of the scheme and to get to grips with it before the end of this year. This is because in some cases, assessments and actions will need to be completed by then, despite main deadline for the scheme not being until 30 June 2021.

Text:

This article sets out some of the potential pitfalls and suggestions for how to avoid them.

1. People not being aware of the scheme and when they need to apply or take other actions

The Home Office’s latest statistics show that by 30 September 2020 over 4 million people have applied under the EUSS, but the total number of people who are eligible to apply is currently unknown.

As the scheme is an application scheme rather than a registration scheme, those who are currently living in the UK and need to apply but fail to secure their status under it will have no lawful immigration status in the UK beyond 30 June 2021. The Home Office will be able consider late applications with a reasonable excuse, however individuals who apply out of time will not have the right to work, rent or to access free healthcare until such time as their application is approved.

The 30 June 2021 deadline also applies to individuals currently living abroad who acquired permanent residence status in the UK less than five years ago. As permanent residence status is lost after a continuous absence from the UK of two years, it is highly likely that some individuals who are in fact eligible to apply may think the scheme does not apply to them.

The situation can also be more complex for family members who may potentially fall within the scope of the scheme, but who need to take action by 31 December 2020 to secure their eligibility. For example, in many cases the relevant family relationship must be established by 31 December 2020.

A recent report by the Migration Observatory outlines a range of reasons why people may fail to secure status under EUSS, which includes people who are still not aware of the scheme at all, or who think that it does not apply to them.

There are also potential issues that may arise where employers, landlords or others are not aware of the grace period from 1 January 2021 to 30 June 2021, or that EUSS status in many cases will only be verifiable online. Where an eligible person has not yet obtained status under the EUSS, or cannot present physical documentation confirming their status under the scheme, there is a risk that they may incorrectly have employment or rental accommodation refused or terminated, or they may be denied other services.

Actions to take to avoid issues arising:

• Employers can minimise potential disruption to their business by sending periodic firmwide communications with information on the scheme and supporting members of their workforce to apply. This support can range from providing signposting to more detailed information to arranging advice sessions or supporting the cost of immigration assistance for the process.

• Employers with European offices may choose to include information on EUSS as well as on frontier worker permits as part of communications relating to Brexit

• Individuals can choose not to wait until the grace period to make their application, ensure they read the guidance from the Government in their approval letter (which they will receive by email) on how their status can be verified, and share this information with relevant third parties

2. Applying under EUSS when this is not necessary

Some EEA national children born in the UK may be British by birth and should therefore not make an application under EUSS. This is because such children have the right of abode in the UK and are not subject to the Immigration Rules.

Actions to take to avoid issues arising:

• Check whether an EEA national child is a British citizen by birth

• Consider making a British passport application for a child who is a British citizen, in order to evidence their British nationality and facilitate their travel to and from the UK after the end of the transition period

3. People not being lawfully in the UK during the post-transition ‘grace period’

Draft regulations published on 21 September 2020 confirm the Government’s intention to allow EEA nationals and their family members who are lawfully resident in the UK by 31 December 2020 to be covered by a grace period to enable them to apply under EUSS after the end of the transition period. The grace period will last from the end of the transition period on 31 December 2020 until 30 June 2021. It also extends beyond 30 June 2021 where an individual has an EUSS application or related appeal outstanding.

The problem for some people however is that the benefit of the grace period will not apply to those whose residence in the UK is not in line with the requirements of the current Immigration (European Economic Area) Regulations 2016. Obvious examples of people who would be excluded are students and the economically self-sufficient who do not hold comprehensive sickness insurance.

The consequence of not being covered by the grace period is that a person will be exposed to hostile environment measures until such time as they are granted leave under the EU Settlement Scheme. This includes not being allowed to work, rent private accommodation or access free healthcare.

The actions to take to avoid issues arising:

• Ensure comprehensive sickness insurance is in place by 31 December 2020 for individuals who are students or economically self-sufficient

• Submit applications under the EU Settlement Scheme as soon as possible, with a view to minimising or eliminating the time the applicant is in the UK without lawful status

4. Applicants not understanding residence requirements for settled status

If a person with pre-settled status spends more than six months in any 12-month period outside the UK it will break the continuity of their residence for settlement eligibility purposes. There is an exception that a single absence of up to 12 months for an important reason for example childbirth, serious illness, study, vocational training or an overseas work posting can be ignored. Compulsory military service, being abroad as a Crown servant, armed forces member or their family member will also be ignored.

The Home Office has not yet produced any specific policy on how absences due to COVID-19 will be treated for the purpose of settlement under the EU Settlement Scheme, however it is possible that this will be produced at some point in the future.

It is however clear that as long as a fresh continuous residence period is started by 31 December 2020 following a break in continuous residence, it is possible to make a further application for pre-settled status by 30 June 2021. Otherwise, where continuous residence has been broken, it would be necessary to qualify for an extension of stay under one of the categories of the new UK immigration system or depart the UK before the expiry of the pre-settled status.

Actions to take to avoid issues arising:

• Review absences in the lead up to 31 December 2020

• Ensure a fresh period of residence in the UK commences by 31 December 2020 if continuous residence has been broken

• Make a further application for pre-settled status by 30 June 2021

5. Applicants not meeting the residence requirements for naturalisation

The residence requirements for naturalisation are different from the requirements for settlement, and this should not be ignored for those who wish to obtain British citizenship, particularly in view of the travel and other disruptions caused by the COVID-19 pandemic.

In recognition of the effect the pandemic is having on international travel and in particular absences from the UK, on 2 September 2020 the Home Office published an update to its naturalisation guidance. The update confirms that where an applicant has absences from the UK of between 480 to 900 days during the qualifying period for naturalisation (or between 300 and 540 days for applicants with a British spouse), their excess absences may be ignored if they were unable to return to the UK due to a global pandemic.

Absences of more than 100 days but no more than 180 days in the final year of the qualifying period may also be ignored if the applicant was unable to the UK due to a global pandemic. There is also discretion to ignore a higher level of final year absences in limited circumstances.

In most cases, applicants will also be required to have established their home, employment, family and finances in the UK.

Actions to take to avoid issues arising:

• Understand what the residence requirements are for naturalisation ie eligibility may be adversely affected if the applicant spends more than 450 days outside the UK during the five year qualifying period, or 270 days over the three year qualifying period (for those with a British spouse or civil partner), or more than 90 days outside the UK during the 12 months before the application

• Record and monitor absences from the UK

• Avoid non-essential international travel outside the UK until travelling conditions become more predictable

• Consider whether absences from the UK during the COVID-19 pandemic are due to an inability to return to the UK, or preference – in the latter case it may be that excess absences will not be ignored

6. Applicants not understanding the implications of the end of the transition period for a naturalisation application

Naturalisation applications for people with a UK permanent residence document can be submitted 12 months after the date the Home Office has recognised on the permanent residence approval letter, however the Home Office has confirmed that individuals who have a permanent residence document will not be able to apply for naturalisation based on this after 31 December 2020 if they have also been granted settled status under EUSS. They must wait until at least 12 months has elapsed since they were granted settled status. Naturalisation applicants also must build in time to prepare for and pass the Life in the UK Test unless they are exempt from this requirement.

Individuals who have a British citizenship application pending on 30 June 2021 (the main in-country deadline for applications under EUSS) must make an application under the EUSS by 30 June 2021, otherwise they will be considered to be an overstayer.

Actions to take to avoid issues arising:

• Submit any naturalisation application relying on a permanent residence document before 31 December 2020 if eligible

• Submit an application for settled status under the EUSS by 30 June 2021 if an application for naturalisation is still pending at that point

If you are an employer wanting more information on how you can support your EEA workforce in the lead-up to the end of the transition period or beyond, please take a look at our Immigration Solutions for Brexit. If you are an individual or have a specific query on any of the issues raised in this article, please contact a member of our Immigration Team.

Related Item(s): Immigration & Global Mobility, Immigration, BREXIT

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

Despite the EU Settlement Scheme (EUSS) being publicised as being simple and straightforward, there are many potential pitfalls for the unwary, particularly when the circumstances of the COVID-19 pandemic are factored in. To avoid them, it will be important for individuals to be aware of the scheme and to get to grips with it before the end of this year. This is because in some cases, assessments and actions will need to be completed by then, despite main deadline for the scheme not being until 30 June 2021.

Text:

This article sets out some of the potential pitfalls and suggestions for how to avoid them.

1. People not being aware of the scheme and when they need to apply or take other actions

The Home Office’s latest statistics show that by 30 September 2020 over 4 million people have applied under the EUSS, but the total number of people who are eligible to apply is currently unknown.

As the scheme is an application scheme rather than a registration scheme, those who are currently living in the UK and need to apply but fail to secure their status under it will have no lawful immigration status in the UK beyond 30 June 2021. The Home Office will be able consider late applications with a reasonable excuse, however individuals who apply out of time will not have the right to work, rent or to access free healthcare until such time as their application is approved.

The 30 June 2021 deadline also applies to individuals currently living abroad who acquired permanent residence status in the UK less than five years ago. As permanent residence status is lost after a continuous absence from the UK of two years, it is highly likely that some individuals who are in fact eligible to apply may think the scheme does not apply to them.

The situation can also be more complex for family members who may potentially fall within the scope of the scheme, but who need to take action by 31 December 2020 to secure their eligibility. For example, in many cases the relevant family relationship must be established by 31 December 2020.

A recent report by the Migration Observatory outlines a range of reasons why people may fail to secure status under EUSS, which includes people who are still not aware of the scheme at all, or who think that it does not apply to them.

There are also potential issues that may arise where employers, landlords or others are not aware of the grace period from 1 January 2021 to 30 June 2021, or that EUSS status in many cases will only be verifiable online. Where an eligible person has not yet obtained status under the EUSS, or cannot present physical documentation confirming their status under the scheme, there is a risk that they may incorrectly have employment or rental accommodation refused or terminated, or they may be denied other services.

Actions to take to avoid issues arising:

• Employers can minimise potential disruption to their business by sending periodic firmwide communications with information on the scheme and supporting members of their workforce to apply. This support can range from providing signposting to more detailed information to arranging advice sessions or supporting the cost of immigration assistance for the process.

• Employers with European offices may choose to include information on EUSS as well as on frontier worker permits as part of communications relating to Brexit

• Individuals can choose not to wait until the grace period to make their application, ensure they read the guidance from the Government in their approval letter (which they will receive by email) on how their status can be verified, and share this information with relevant third parties

2. Applying under EUSS when this is not necessary

Some EEA national children born in the UK may be British by birth and should therefore not make an application under EUSS. This is because such children have the right of abode in the UK and are not subject to the Immigration Rules.

Actions to take to avoid issues arising:

• Check whether an EEA national child is a British citizen by birth

• Consider making a British passport application for a child who is a British citizen, in order to evidence their British nationality and facilitate their travel to and from the UK after the end of the transition period

3. People not being lawfully in the UK during the post-transition ‘grace period’

Draft regulations published on 21 September 2020 confirm the Government’s intention to allow EEA nationals and their family members who are lawfully resident in the UK by 31 December 2020 to be covered by a grace period to enable them to apply under EUSS after the end of the transition period. The grace period will last from the end of the transition period on 31 December 2020 until 30 June 2021. It also extends beyond 30 June 2021 where an individual has an EUSS application or related appeal outstanding.

The problem for some people however is that the benefit of the grace period will not apply to those whose residence in the UK is not in line with the requirements of the current Immigration (European Economic Area) Regulations 2016. Obvious examples of people who would be excluded are students and the economically self-sufficient who do not hold comprehensive sickness insurance.

The consequence of not being covered by the grace period is that a person will be exposed to hostile environment measures until such time as they are granted leave under the EU Settlement Scheme. This includes not being allowed to work, rent private accommodation or access free healthcare.

The actions to take to avoid issues arising:

• Ensure comprehensive sickness insurance is in place by 31 December 2020 for individuals who are students or economically self-sufficient

• Submit applications under the EU Settlement Scheme as soon as possible, with a view to minimising or eliminating the time the applicant is in the UK without lawful status

4. Applicants not understanding residence requirements for settled status

If a person with pre-settled status spends more than six months in any 12-month period outside the UK it will break the continuity of their residence for settlement eligibility purposes. There is an exception that a single absence of up to 12 months for an important reason for example childbirth, serious illness, study, vocational training or an overseas work posting can be ignored. Compulsory military service, being abroad as a Crown servant, armed forces member or their family member will also be ignored.

The Home Office has not yet produced any specific policy on how absences due to COVID-19 will be treated for the purpose of settlement under the EU Settlement Scheme, however it is possible that this will be produced at some point in the future.

It is however clear that as long as a fresh continuous residence period is started by 31 December 2020 following a break in continuous residence, it is possible to make a further application for pre-settled status by 30 June 2021. Otherwise, where continuous residence has been broken, it would be necessary to qualify for an extension of stay under one of the categories of the new UK immigration system or depart the UK before the expiry of the pre-settled status.

Actions to take to avoid issues arising:

• Review absences in the lead up to 31 December 2020

• Ensure a fresh period of residence in the UK commences by 31 December 2020 if continuous residence has been broken

• Make a further application for pre-settled status by 30 June 2021

5. Applicants not meeting the residence requirements for naturalisation

The residence requirements for naturalisation are different from the requirements for settlement, and this should not be ignored for those who wish to obtain British citizenship, particularly in view of the travel and other disruptions caused by the COVID-19 pandemic.

In recognition of the effect the pandemic is having on international travel and in particular absences from the UK, on 2 September 2020 the Home Office published an update to its naturalisation guidance. The update confirms that where an applicant has absences from the UK of between 480 to 900 days during the qualifying period for naturalisation (or between 300 and 540 days for applicants with a British spouse), their excess absences may be ignored if they were unable to return to the UK due to a global pandemic.

Absences of more than 100 days but no more than 180 days in the final year of the qualifying period may also be ignored if the applicant was unable to the UK due to a global pandemic. There is also discretion to ignore a higher level of final year absences in limited circumstances.

In most cases, applicants will also be required to have established their home, employment, family and finances in the UK.

Actions to take to avoid issues arising:

• Understand what the residence requirements are for naturalisation ie eligibility may be adversely affected if the applicant spends more than 450 days outside the UK during the five year qualifying period, or 270 days over the three year qualifying period (for those with a British spouse or civil partner), or more than 90 days outside the UK during the 12 months before the application

• Record and monitor absences from the UK

• Avoid non-essential international travel outside the UK until travelling conditions become more predictable

• Consider whether absences from the UK during the COVID-19 pandemic are due to an inability to return to the UK, or preference – in the latter case it may be that excess absences will not be ignored

6. Applicants not understanding the implications of the end of the transition period for a naturalisation application

Naturalisation applications for people with a UK permanent residence document can be submitted 12 months after the date the Home Office has recognised on the permanent residence approval letter, however the Home Office has confirmed that individuals who have a permanent residence document will not be able to apply for naturalisation based on this after 31 December 2020 if they have also been granted settled status under EUSS. They must wait until at least 12 months has elapsed since they were granted settled status. Naturalisation applicants also must build in time to prepare for and pass the Life in the UK Test unless they are exempt from this requirement.

Individuals who have a British citizenship application pending on 30 June 2021 (the main in-country deadline for applications under EUSS) must make an application under the EUSS by 30 June 2021, otherwise they will be considered to be an overstayer.

Actions to take to avoid issues arising:

• Submit any naturalisation application relying on a permanent residence document before 31 December 2020 if eligible

• Submit an application for settled status under the EUSS by 30 June 2021 if an application for naturalisation is still pending at that point

If you are an employer wanting more information on how you can support your EEA workforce in the lead-up to the end of the transition period or beyond, please take a look at our Immigration Solutions for Brexit. If you are an individual or have a specific query on any of the issues raised in this article, please contact a member of our Immigration Team.

Related Item(s): Immigration & Global Mobility, Immigration, BREXIT

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

Covid-19 is causing many employees to ask if they can work from “home” for an extended period in an overseas country – for example, because it is their home nation, or their family is based there. This article explains the potential legal issues and how to avoid the traps.

Text:

Salaries tax in Hong Kong

The taxation of employment income for employees temporarily working abroad will depend on whether their employment is considered “Hong Kong employment” or “non-Hong Kong employment”.   

In determining this question, the Inland Revenue Department will consider various factors, such as where the employment contract is negotiated, concluded and enforceable; where the central management and control of the employer is; and where the employee’s remuneration is paid. If “Hong Kong” is the answer to one or more of these questions, the employment is highly likely to be Hong Kong employment.

Employees with Hong Kong employment will generally remain subject to salaries tax in Hong Kong if they temporarily work outside of Hong Kong for part of the tax year.  However, if they work outside of Hong Kong for the full tax year, then no salaries tax in Hong Kong will be levied.

Employees with non-Hong Kong employment who temporarily work outside of Hong Kong will not be subject to salaries tax in Hong Kong for that period (whereas they generally would be for the days they carry out work in Hong Kong).

It should be remembered that liability for salaries tax in Hong Kong falls on the employee, rather than the employer.

Income tax may be payable in host country if certain conditions are satisfied

The starting point is that the host country may have taxing rights over the employment income that the employee earns while physically working in that country.  However, if there is a double taxation treaty (DTT) between Hong Kong and the host country, the employee will be subject to income tax of the host country only if certain conditions are satisfied.

Hong Kong has a DTT with 65 countries/ jurisdictions including its top trading partners – the UK, Japan and France. Hong Kong has also entered into a tax memorandum for the avoidance of double taxation with mainland China, which contains the essential provisions of a DTT.

The DTTs Hong Kong has entered into typically grant taxing rights on employment income to a host country when an employee is present in that host country for 183 days in any 12-month period.  In practice, this means that a short stay abroad in many locations is not going to result in the employee becoming liable for income tax in the host country.

It should be noted that employees who have already spent other periods in the host country in the same 12-month period (e.g. visiting family) may reach the 183-day threshold sooner than you think.  Also, there are conditions other than the physical period of stay which may grant the taxing right of employment income to a host country (e.g. if the remuneration is borne by a permanent establishment of that host county), so the relevant DTT must be checked carefully.

If the employee does become subject to tax in the host country, the same income may still be subject to tax in Hong Kong. In that situation, double tax relief will be available in accordance with the provisions of the DTT.

Pensions implications

Hong Kong does not have a comprehensive social security system like in other countries, but it does have something akin to a statutory pension. Most employers and employees in Hong Kong are required to make contributions to a mandatory provident fund (MPF) which is a regulated privately-managed retirement fund.

Where mandatory contributions are being made to an MPF, arrangement for the employee to work abroad will not affect the contributing obligations of the employer or the employee.  If the employer and employee are exempt from making MPF contributions (for example, where the employee is an expatriate employed in Hong Kong on a work visa for not more than 13 months), working abroad will not affect the exemption.

Risk of creating a permanent establishment is low but should be considered

In some situations, there will be a risk that the employee’s activities or presence in the host country will create a permanent establishment for the employer in that country.  This may be the case if, for example, the employee has a sales or business development role and is habitually exercising an authority to conclude contracts in the name of the employer while in the host country.

If a permanent establishment is created, the profits attributable to that establishment would be subject to corporate tax in that country.  Assuming the working-from-home arrangement is only short term, it would be difficult for the tax authorities to argue that a permanent establishment had been created.  The longer the arrangement continues, however, the greater the risk – particularly if the employee routinely negotiates the terms of contracts with customers which are simply “rubber-stamped” by Hong Kong.

Immigration implications of working temporarily abroad

From an immigration perspective, an employer should take into account whether an employee has the right to work in the relevant jurisdiction when considering whether to allow him/her to work remotely from there.

As an employment visa or similar is generally not required for short business visits, depending on the employee’s activities, it may be possible to characterise the employee’s stay as a business visit. The activities of the employee as a business visitor should, however, be limited to those typically undertaken during business trips (e.g. meetings and training). Restricting an employee’s activities in this way is unlikely to be practical for many employers and their employees, however, and, in general, the longer an employee carries out work in a country, the more difficult it will be to characterise their stay as a business visit. In some countries, work itself is prohibited even if the activities are restricted to those typically undertaken as a business visitor.

Employers may also need to consider any immigration issues that could arise on the employee’s return to Hong Kong. For instance, if the employee has any interest in applying for the right of abode in Hong Kong in the future, he/she should consider whether their absence from Hong Kong may affect their eligibility to do so. Generally, as part of the application process, periods of continuous absence for more than 6 months need to be declared and assessed by the Immigration Department.

Employment law and data privacy implications of working temporarily abroad

Employment law considerations

While it is possible to have a remote working arrangement from a Hong Kong employment law perspective, the employer would need to be cautious as to whether local employment laws and regulations would also apply. These may include minimum wage restrictions, paid annual holidays, statutory maternity/paternity entitlements and rights on termination.

Employers in Hong Kong are subject to both statutory and common law duties in respect of the health and safety of their employees, including a duty to provide and maintain a reasonably safe workplace. Failure to comply with such obligations may expose employers to potential claims. If an employee suffers a personal injury by accident which “arises out of and in the course of employment” (whether he/she is performing his/her duties in Hong Kong or abroad), the employer may be liable to compensate the employee. Employers should also ensure that they comply with any local health and safety requirements.

Transferring data outside of Hong Kong

There are currently no restrictions on the transfer of personal data outside of Hong Kong, as the cross-border transfer restrictions set out in section 33 of the Personal Data (Privacy) Ordinance (“PDPO”) were held back and have not yet come into force. Nevertheless, non-binding best practice guidance published by the Privacy Commissioner encourages compliance with the cross-border transfer restrictions in section 33 of the PDPO, which prohibits the transfer of personal data to a place outside Hong Kong unless at least one condition from a list of conditions is met. One such condition is that “the individual has consented in writing to the transfer”.

Therefore, if it is anticipated that personal data will be transferred outside of Hong Kong, the employer should obtain the data subject’s express, informed and voluntary consent before transferring such data. Employers should also consider the local data privacy laws and check if there are any restrictions on processing and storing personal data that need to be complied with there.

Practical considerations

• Only accept a remote working request for a country/jurisdiction outside of Hong Kong if the employee’s role can be performed effectively and lawfully abroad.

• Consider only approving requests for a short, time-limited duration where the employee’s expected return date is clearly documented.

• Seek local expert’s advice on any tax, immigration, employment, data privacy and health and safety obligations.

• If the employee will be carrying out data processing, check if his/her duties can be performed abroad without contravening data privacy laws in both the host country and Hong Kong.

• Review insurance policies to ensure that the current insurance coverage is sufficient to cover employees who are working abroad.

• Agree and record the terms of any temporary overseas working arrangement in writing to clarify the following:

• The employee will be liable for any additional income taxes which may be charged, and the employee will be responsible for any personal tax declarations in this regard.

• The employment contract remains governed by Hong Kong law.

• The employee is still working solely for the Hong Kong entity.

• If applicable, restrict the employee from carrying out any regulated activities whilst he/she is working abroad.

• The employee takes responsibility for ensuring they have the necessary technology and equipment in place to enable them to work effectively.

If you require any further advice on this subject, please reach out to your usual Lewis Silkin contact.

Related Item(s): Remote & flexible working, Remote working overseas, Asia Pacific 亞太區, Immigration law across APAC, Employment law in Hong Kong, Tax and reward schemes across APAC

Author(s)/Speaker(s): Kathryn Weaver, Kenneth Leung, Iris Chin, Katy Lee,

Covid-19 is causing many employees to ask if they can work from “home” for an extended period in an overseas country – for example, because it is their home nation, or their family is based there. This article explains the potential legal issues and how to avoid the traps.

Text:

Salaries tax in Hong Kong

The taxation of employment income for employees temporarily working abroad will depend on whether their employment is considered “Hong Kong employment” or “non-Hong Kong employment”.   

In determining this question, the Inland Revenue Department will consider various factors, such as where the employment contract is negotiated, concluded and enforceable; where the central management and control of the employer is; and where the employee’s remuneration is paid. If “Hong Kong” is the answer to one or more of these questions, the employment is highly likely to be Hong Kong employment.

Employees with Hong Kong employment will generally remain subject to salaries tax in Hong Kong if they temporarily work outside of Hong Kong for part of the tax year.  However, if they work outside of Hong Kong for the full tax year, then no salaries tax in Hong Kong will be levied.

Employees with non-Hong Kong employment who temporarily work outside of Hong Kong will not be subject to salaries tax in Hong Kong for that period (whereas they generally would be for the days they carry out work in Hong Kong).

It should be remembered that liability for salaries tax in Hong Kong falls on the employee, rather than the employer.

Income tax may be payable in host country if certain conditions are satisfied

The starting point is that the host country may have taxing rights over the employment income that the employee earns while physically working in that country.  However, if there is a double taxation treaty (DTT) between Hong Kong and the host country, the employee will be subject to income tax of the host country only if certain conditions are satisfied.

Hong Kong has a DTT with 65 countries/ jurisdictions including its top trading partners – the UK, Japan and France. Hong Kong has also entered into a tax memorandum for the avoidance of double taxation with mainland China, which contains the essential provisions of a DTT.

The DTTs Hong Kong has entered into typically grant taxing rights on employment income to a host country when an employee is present in that host country for 183 days in any 12-month period.  In practice, this means that a short stay abroad in many locations is not going to result in the employee becoming liable for income tax in the host country.

It should be noted that employees who have already spent other periods in the host country in the same 12-month period (e.g. visiting family) may reach the 183-day threshold sooner than you think.  Also, there are conditions other than the physical period of stay which may grant the taxing right of employment income to a host country (e.g. if the remuneration is borne by a permanent establishment of that host county), so the relevant DTT must be checked carefully.

If the employee does become subject to tax in the host country, the same income may still be subject to tax in Hong Kong. In that situation, double tax relief will be available in accordance with the provisions of the DTT.

Pensions implications

Hong Kong does not have a comprehensive social security system like in other countries, but it does have something akin to a statutory pension. Most employers and employees in Hong Kong are required to make contributions to a mandatory provident fund (MPF) which is a regulated privately-managed retirement fund.

Where mandatory contributions are being made to an MPF, arrangement for the employee to work abroad will not affect the contributing obligations of the employer or the employee.  If the employer and employee are exempt from making MPF contributions (for example, where the employee is an expatriate employed in Hong Kong on a work visa for not more than 13 months), working abroad will not affect the exemption.

Risk of creating a permanent establishment is low but should be considered

In some situations, there will be a risk that the employee’s activities or presence in the host country will create a permanent establishment for the employer in that country.  This may be the case if, for example, the employee has a sales or business development role and is habitually exercising an authority to conclude contracts in the name of the employer while in the host country.

If a permanent establishment is created, the profits attributable to that establishment would be subject to corporate tax in that country.  Assuming the working-from-home arrangement is only short term, it would be difficult for the tax authorities to argue that a permanent establishment had been created.  The longer the arrangement continues, however, the greater the risk – particularly if the employee routinely negotiates the terms of contracts with customers which are simply “rubber-stamped” by Hong Kong.

Immigration implications of working temporarily abroad

From an immigration perspective, an employer should take into account whether an employee has the right to work in the relevant jurisdiction when considering whether to allow him/her to work remotely from there.

As an employment visa or similar is generally not required for short business visits, depending on the employee’s activities, it may be possible to characterise the employee’s stay as a business visit. The activities of the employee as a business visitor should, however, be limited to those typically undertaken during business trips (e.g. meetings and training). Restricting an employee’s activities in this way is unlikely to be practical for many employers and their employees, however, and, in general, the longer an employee carries out work in a country, the more difficult it will be to characterise their stay as a business visit. In some countries, work itself is prohibited even if the activities are restricted to those typically undertaken as a business visitor.

Employers may also need to consider any immigration issues that could arise on the employee’s return to Hong Kong. For instance, if the employee has any interest in applying for the right of abode in Hong Kong in the future, he/she should consider whether their absence from Hong Kong may affect their eligibility to do so. Generally, as part of the application process, periods of continuous absence for more than 6 months need to be declared and assessed by the Immigration Department.

Employment law and data privacy implications of working temporarily abroad

Employment law considerations

While it is possible to have a remote working arrangement from a Hong Kong employment law perspective, the employer would need to be cautious as to whether local employment laws and regulations would also apply. These may include minimum wage restrictions, paid annual holidays, statutory maternity/paternity entitlements and rights on termination.

Employers in Hong Kong are subject to both statutory and common law duties in respect of the health and safety of their employees, including a duty to provide and maintain a reasonably safe workplace. Failure to comply with such obligations may expose employers to potential claims. If an employee suffers a personal injury by accident which “arises out of and in the course of employment” (whether he/she is performing his/her duties in Hong Kong or abroad), the employer may be liable to compensate the employee. Employers should also ensure that they comply with any local health and safety requirements.

Transferring data outside of Hong Kong

There are currently no restrictions on the transfer of personal data outside of Hong Kong, as the cross-border transfer restrictions set out in section 33 of the Personal Data (Privacy) Ordinance (“PDPO”) were held back and have not yet come into force. Nevertheless, non-binding best practice guidance published by the Privacy Commissioner encourages compliance with the cross-border transfer restrictions in section 33 of the PDPO, which prohibits the transfer of personal data to a place outside Hong Kong unless at least one condition from a list of conditions is met. One such condition is that “the individual has consented in writing to the transfer”.

Therefore, if it is anticipated that personal data will be transferred outside of Hong Kong, the employer should obtain the data subject’s express, informed and voluntary consent before transferring such data. Employers should also consider the local data privacy laws and check if there are any restrictions on processing and storing personal data that need to be complied with there.

Practical considerations

• Only accept a remote working request for a country/jurisdiction outside of Hong Kong if the employee’s role can be performed effectively and lawfully abroad.

• Consider only approving requests for a short, time-limited duration where the employee’s expected return date is clearly documented.

• Seek local expert’s advice on any tax, immigration, employment, data privacy and health and safety obligations.

• If the employee will be carrying out data processing, check if his/her duties can be performed abroad without contravening data privacy laws in both the host country and Hong Kong.

• Review insurance policies to ensure that the current insurance coverage is sufficient to cover employees who are working abroad.

• Agree and record the terms of any temporary overseas working arrangement in writing to clarify the following:

• The employee will be liable for any additional income taxes which may be charged, and the employee will be responsible for any personal tax declarations in this regard.

• The employment contract remains governed by Hong Kong law.

• The employee is still working solely for the Hong Kong entity.

• If applicable, restrict the employee from carrying out any regulated activities whilst he/she is working abroad.

• The employee takes responsibility for ensuring they have the necessary technology and equipment in place to enable them to work effectively.

If you require any further advice on this subject, please reach out to your usual Lewis Silkin contact.

Related Item(s): Immigration law in Hong Kong, Immigration law across APAC, Employment law in Hong Kong, Remote & flexible working, Remote working overseas, Employment law across APAC, Asia Pacific Region

Author(s)/Speaker(s): Kathryn Weaver, Kenneth Leung, Iris Chin, Katy Lee,

Statement of Changes in Immigration Rules HC 813 was laid on 22 October 2020 and is the key document outlining the features of the Government’s Points-Based Immigration System, as well as simplifying the language and structure of some areas of the Rules. The new system will apply to EEA and Swiss nationals, aside from Irish nationals (EEA nationals). This insight focuses on some of the changes that are likely to be of most interest to employers.

Text:

HC 813 contains 514 pages of detail, however only some of it is aimed at creating new criteria for entry and stay in the UK.

It will be possible to make applications under the new Rules from 9 am on 1 December 2020 in most cases, so we anticipate that guidance on how to do this will be published in the very near future.

EEA nationals will not be able to apply in-country under the Rules until 11 pm on 31 December 2020, unless they are applying under the EU Settlement Scheme as an S2 healthcare visitor or a service provider from Switzerland. Those who apply for entry clearance (other than under the same categories) will have this granted from 1 January 2021 at the earliest.

General changes

These include:

• In-country switching will be allowed from most immigration categories other than visitor, short-term student, parent of a child student, seasonal worker, domestic worker or a person with leave outside the Immigration Rules – a notable exception being that it will not be possible to switch into the UK ancestry route

• Expanded application validity requirements, which we comment on in this article

• Re-named and restructured appendices for cross-cutting topics including the Academic Technology Approval Scheme requirement, English language requirements for limited stay, the Knowledge of Language and Life requirement for settlement, meeting financial requirements for limited stay and the continuous residence requirement for settlement in work and business categories

Skilled Worker route

This category will replace Tier 2 (General) and is for individuals coming to the UK to work in a skilled job with a licenced sponsor.

We have previously analysed the main features of the Skilled Worker route here, however the statement also confirms that no cooling off periods will apply to the route, and there will be no six-year total length of stay.

Controversially, no changes have been made to the shortage occupations that will be accepted initially under the Skilled Worker route, other than the removal of quantity surveyors, which was previously included in error. This means that skilled chefs will still be recognised as a shortage occupation initially despite the Migration Advisory Committee (MAC) recommending their removal, but that all of the other occupations recommended for inclusion will not be reflected at the time the route launches. We have commented on the MAC’s recommendations here.

The reason given by the Home Office for taking this approach is that it wishes to assess how the labour market develops following the pandemic, and in response to the new system being introduced. It seems more likely however that there has simply been insufficient time to properly consider and implement the recommendations in the MAC’s report. It is foreseeable that there will be calls for the shortage occupation list to be revised swiftly to limit the negative impact that delay may have on resourcing, particularly in the health and social care sector.

Intra-Company Transfer routes

The main intra-company transfer provisions for established workers being transferred from their employer abroad to work at a related business in the UK, as well as for graduate trainees are both preserved.

Substantive changes include:

• Amendment to the 12-month cooling off requirement so that it will only apply to those who have already held leave under the route for five years in any six-year rolling period, or nine years in any ten-year rolling period for high earners with a high earner salary of at least £73,900

• There will only be one high earner salary of £73,900 for this route, which will enable the individual to access the cooling off provision mentioned above, and also will exempt them from having to be employed abroad for at least 12 months before their application to transfer to the UK

• Relaxed switching requirements, except that it will still be necessary for an applicant to have the relevant 12 months experience abroad (or three months for graduate trainees) unless the applicant is a high earner

The Intra-Company Transfer routes will be subject to a review by the MAC in 2021, with the MAC’s report due by the end of October 2021. Further reform of these routes is therefore expected at the end of 2021 or early 2022. Our commentary on the review is here.

Visitors

The Rules for visitors will be simplified. The changes to the route are modest, and it remains to be seen if the route will be further reformed in the medium-term to better facilitate business travel following the end of the transition period.

Changes include:

• Allowing Standard visitors to study at an accredited institution for up to six months

• Making a correction to state that drivers on international routes may collect as well as deliver goods and passengers

• Removing the requirement for volunteering to be ‘incidental’ to the main purpose of the visit

• Allowing academic visitors who are experts in their field to extend their stay in the UK to a total of 12 months

New extension route for Turkish workers and businesspersons

This route will become available from 11 pm on 31 December 2020 under a new Appendix ECAA Extension of Stay. The aim of this appendix is to enable Turkish workers, businesspersons and their existing family members to proceed to settlement on the broadly the same criteria as currently, with the exception that domestic criminality thresholds will apply for considering conduct taking place after the end of the transition period.

New immigration route for British Nationals (Overseas) and their family members

The new route will launch from 31 January 2021. New fee regulations also laid on 22 October 2020 confirm that the applicationjhc,. ?lkgfdfdfgfee for each main applicant and dependant will be £180 for a 30-month visa and £250 for a five-year visa.

Unchanged categories

Categories that have been simplified but are not intended to contain changes to immigration policy include:

• Tier 2 Minister of Religion

• Tier 2 Sportsperson

• UK ancestry

• The Tier 5 Temporary Worker routes for seasonal workers, youth mobility, religious workers, charity workers, creative and sporting workers, and those coming to work in the UK under international agreements or government authorised exchange schemes

• Start-up

• Innovator

Expedited sponsor licence processing

In a separate announcement, the Home Office has confirmed it will be introducing a new £500 fee from 12 November 2020 for the priority processing of sponsor licence applications.

We will continue to provide updates on the roll-out of the new system as further details become available. There are still places available on our Immigration Law Academy on 23 and 24 November, and we are also able to offer tailored advice and training on the new system through our Immigration Solutions for HR. Please contact a member of our Immigration Team for further information.

Related Item(s): Immigration & Global Mobility, BREXIT, Immigration

Author(s)/Speaker(s): Andrew Osborne, Naomi Hanrahan-Soar, Joanna Hunt, Stephen OFlaherty,