Matthew Davies is a partner in the Employment Department at Fox Williams LLP and leads its business immigration practice. You can contact the author at MDavies@ foxwilliams.com or 020 7614 2614.

hrlaw focus

Tiers of frustration? a look at some of the proposed changes to UK immigration law

You can contact the author at MDavies@foxwilliams.com

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Date Published: 6th Jun, 2008

Matthew Davies of Fox Williams LLP considers the new landscape employers and employees will face as the Points Based System for UK immigration is rolled out.

Following a carefully managed media campaign heralding an “Australian style” Points Based System (“PBS”) for UK immigration, the Government introduced the first elements of its new arrangements on 29 February 2008.  Most of the new system is due to be implemented during the course of the next year.  When complete, it will bear only a passing resemblance to the Australian model (cynics say the comparison was chosen because Australia is perceived to be “tough” on immigration and this plays well with the public).  The main features are the sub-division of economic and employment-based immigration into five “tiers”, points-based assessment for each migrant and the concept of sponsorship.  This special focus looks at each of the Tiers in turn, the timetable for implementation and the emerging issues for employers and employees as the new system is introduced in stages, and the old one is phased out. 

Tier 1 – Highly Skilled Migrants

Tier 1 is the first part of the new system to go “live”, beginning on 29 February 2008.  Broadly, Tier 1 covers similar ground to the existing Highly Skilled Migrant Programme (“HSMP”), which was introduced in 2002 to provide stand-alone immigration permission enabling individuals with high-level skills, qualifications and experience to immigrate to the UK for employment or business without being tied to a particular job.  Tier 1 will also encompass the successor to the existing Investor category, whilst an “Entrepreneur” sub-category replaces the current business person provisions for those setting up or taking over the running of a business.  A fourth sub-category, Post-Study, will enable who have recently gained appropriate advanced qualifications in the UK to “switch” into Tier 1.

For in-country applicants, that is those already with immigration status in the UK, the HSMP was withdrawn on 29 February 2008 and replaced by Tier 1.  This means that all new applicants wishing to “switch” into the highly skilled category while in the UK must apply under Tier 1, not under the old HSMP.  Similarly, HSMP holders whose status is expiring, and who wish to apply for an extension, must apply to extend into Tier 1. 

For out of country applicants, the position is different.  Only applicants currently residing in India (from 1 April 2008) can apply under Tier 1.  Applicants in the rest of the world must continue to use the HSMP until Tier 1 is rolled out during the Summer and Autumn of 2008.  There is speculation that, for some countries, implementation may slip into 2009. 

Tier 2 – Skilled, with job offer

Tier 2 will replace the current work permit system.  It is primarily designed to enable UK employers, unable to resource a particular skilled position from the resident labour force, to sponsor a non-EEA employee in the role.  The individual and the job will have to meet criteria broadly equivalent to those required by the current business and commercial work permit arrangements; and, in order to participate, the employer must be licensed to issue certificates of sponsorship (see “Sponsorship” below). 

Tier 3 – Low skilled, temporary

Initially intended for low-skilled workers filling temporary labour shortages, for example in agriculture and hospitality, Tier 3 has effectively been mothballed.  The Government thinking is that the ready supply of cheap labour following the accession of the “new” European countries in 2004 has removed the need for employers to look further afield.  This is not universally accepted – for example, the Immigration Advisory Service has argued that a need for “cultural sensitivity” should be considered in some sectors – citing the example of Bangladeshi-owned restaurants and their perceived need to employ staff with a particular ethnic and cultural background.

Tier 4 – Students

Under the new arrangements, students will have to score a requisite number of points to qualify to come to the UK to study.  In most other respects, the new arrangements will reflect the existing ones.  Implementation is not expected until the Spring of 2009 at the earliest.

Tier 5 – Youth mobility, temporary and “non-economic” (short term)

This Tier is aimed at “youth mobility” and temporary workers, and those admitted to the UK for a limited time “to satisfy primarily non-economic objectives”.  It bundles together successors to various existing categories such as working holidaymakers and student exchange schemes, which will be withdrawn - “deleted”, in Home Office-speak.  An important feature of Tier 5 will be the deliberate block on “switching” into a long-stay category; all those who immigrate in Tier 5 will be  signing up to the “temporary” nature of their stay in the UK and expected to leave afterwards (if it is implemented, the same will apply to Tier 3).  By contrast, there will be broad eligibility to apply to switch between Tiers 1, 2 and 4.

Sponsorship

The concept of sponsorship is a key plank of the new system.  All applicants in Tiers 2-5 will need a certificate of sponsorship issued by a licensed sponsor – a UK employer, educational institution or other approved sponsor – in order to be eligible under the PBS.  In order to issue certificates of sponsorship, the sponsor must apply for licensing via the sponsorship register.  This involves providing significant and detailed, and in many cases commercially sensitive, information to Government and the giving of serious undertakings by senior employees or directors of the sponsor in relation to sponsor’s duties.  When licensed, sponsors will be given an A or B rating.  B-rating is, effectively, a public declaration by the Home Office that the sponsor is falling short in some respect and will need to “improve its performance” sufficiently to be upgraded to an A-rating or face removal from the register. 

Although the sponsorship register is already open, there have been few applications to date and, until recently, no sponsors were actually licensed.  This is partly because the work permit scheme is still in place and Tier 2 is yet to be implemented.  It also reflects a degree of employer concern about the level of information which a sponsor must commit to Government via an on-line process, followed by a “visit” by Home Office officials.  The Government is refining the sponsorship application process, and many employers are adopting a “wait and see” approach before rushing to register. 

Issues on implementation

Although relatively little of the new PBS has been implemented, problems are already occurring.  There is concern that, as the system is rolled out, new issues will emerge.  A current issue is the restriction on “switching” into Tier 1 from other categories.  For example, those holding working holidaymaker status were previously able, subject to meeting the criteria, to “switch” in-country into the old Highly Skilled Migrant Programme.  Many working holidaymakers and their employers were shocked to discover that it was no longer possible to “switch” in-country into Tier 1 after 29 February.  There is also uncertainty about the dates at which certain features of the existing system will be withdrawn.  The Home Office has announced its intention to “delete” some key provisions, including the International Graduates Scheme (which will be replaced by Tier 1 Post-Study – see above).  Some transitional arrangements have been put in place to alleviate the difficulties – but they will only be available for a limited time.

Conclusion

The Government has irrevocably committed to wholesale change of the business immigration system; points, tiers and sponsorship are on their way.  Changes are at an early stage, and it will be several months at least before the new system is substantially implemented.  Most employers are adopting a cautious, wait-and-see approach to sponsorship registration while the system is developed and refined.  Transitional provisions are offering some relief to those caught out by the changes, but persistent difficulties are emerging and there are indications that more problems lie ahead as implementation gathers pace.