Legal Briefing

A review of the recent changes to UK immigration law and sponsorship

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Human resources | 01 July 2014

In the run up to the next general election on 7 May 2015, the UK government is implementing a raft of measures intended to reduce ‘illegal’ immigration in the UK. The latest of these measures is the Immigration Act 2014 (the Act), which received royal assent on 14 May 2014. The first element of this was implemented on 16 May 2014, in the form of a new code of practice on preventing illegal working. 


The provisions in the Act are far reaching and include an increase in the maximum penalty for employing workers illegally and a requirement to prove legal residence in the UK before opening a bank account or renting a property. We do not yet know how the changes will be enforced in practice, however while the government’s control over illegal immigration will be improved, it is hoped that genuine skilled migrants will not be discouraged by the government’s strong rhetoric on immigration from coming to the UK.

In this context, we look at how recent developments in UK immigration law might affect sponsors and skilled migrants themselves.

UK PLC AND THE CHANGES

Most sponsors will be aware that the Tier 1 (General) route was closed to new applicants in April 2011 and the Tier 1 (Post-Study Work) route closed to new applicants in April 2012. The result of this is that non-EEA national graduates on student visas are now granted only four months leave after the end of their course within which to find sponsored employment. This is often insufficient time for new entrants to the job market, who usually have little or no work experience, to be awarded a skilled graduate level job paid at the minimum salary level required for sponsored roles.

On 15 May 2014, Sir James Dyson criticised government policy as a failure to tackle the skills shortage in the UK and that it is undermining to UK global economic competitiveness. In the context of his plan to create 3,000 new jobs in his company’s research and development centre in Wiltshire, Sir James stated:

‘It is true that nearly 90% of our researchers at British universities in engineering and science come from overseas and we ought to make them more welcome. Indeed nearly half of the undergraduates studying science and engineering are also from outside the EU so I think if we made them welcome from the very beginning and said that “when you’ve qualified you can stay in Britain and help Britain create interesting products that we can export”, rather than discouraging them; they go home and then they become competitors to us. This is sheer madness…’

There is some concern therefore that the Act may make sponsored skilled migrants in the UK feel less than welcome. In addition to rising government fees for immigration applications, there is likely to be a rise in landlords’ and letting agents’ fees. For those for whom proving their immigration status is not straightforward, which as present sponsors will understand is very common in view of the complexity of immigration law, this may well result in delays in securing accommodation and setting up bank accounts, and there is a belief that in practice landlords may give preference to British and EEA nationals over sponsored skilled migrants.

By way of the Act, the government delegates responsibility for immigration control to agencies such as banks, private landlords and letting agents, a principle which underpins the current sponsorship regime, which was introduced with the points-based system in 2008. A permeating theme in the Act is that these agencies are required to share information with the Home Office, either by acting as ‘informers’ or by demonstrating during a Home Office visit that they have maintained the required records. For example, the service the Home Office will offer to landlords and agents to help them determine a potential tenant’s status will act as a source of information for the Home Office. Further, banks and building societies will be required to undertake an immigration status check against records held by an anti-fraud organisation or a data matching public authority before allowing a person to open an account, or else face sanctions.

In view of its election pledge, the government is likely to intensify measures to hold sponsors and other organisations accountable for people it deems should not be sponsored or permitted to rent property or open a bank account due to credibility issues. This culture of greater bureaucracy creates scope for an already overstretched Home Office to take enforcement action against sponsors and other agencies erroneously. In this context, it is advisable for sponsors to refresh their understanding of their duties so as to easily demonstrate compliance.

SPONSORSHIP

The policy underlying sponsorship for employers and educational providers is set out in the sponsor guidance and is based on two principles:

  1. Those who benefit most directly from migration (employers, education providers or other bodies who are bringing in migrants) should play their part in ensuring the system is not abused.
  2. Ensuring that those applying to come to the UK for work or to study are eligible and that a reputable employer or education provider genuinely wishes to take them on.

The current guidance also states:

‘The majority of those who employ overseas workers are honest and willing to comply with their duties. Because sponsorship transfers a significant amount of responsibility for selecting migrants to sponsors, we have a duty to ensure that we deal appropriately with the minority who do not comply with their duties.’

A trend has developed in government policy whereby immigration officers and entry clearance officials have extended powers to determine whether an application is ‘genuine’. Most recently, on 6 April 2014, a ‘genuineness’ test was introduced for those applying for a sponsor licence, such that a Tier 2 (General) sponsor licence or a Certificate of Sponsorship (CoS) application can be refused if the Home Office are not satisfied that the company can offer genuine employment meeting the policy requirements on skill level and appropriate rate.

This indicates a return to subjective decision making, which was previously criticised for its inconsistency and bureaucracy. As the Act also reduces the available appeal routes from 17 to four, the process for challenging errors in Home Office decision making could become more cumbersome. This is of concern given John Vine, the independent chief inspector of borders and immigration, identified in 2013 serious failings in decision making at a number of entry clearance posts worldwide, although as the Home Office has now taken steps to remedy these failings, it is hoped that such errors are much reduced.

The Home Office has powers to downgrade, suspend and revoke a Tier 2 sponsor licence where they believe the employer to be in breach of the licence conditions. Enforcement action against sponsors is usually triggered as a result of intelligence about the sponsor or about a person working for the sponsor. There is likely to be an increase in the volume of information being passed on to the Home Office under the Act, for them to interpret and act upon. The Home Office will usually either make a request for information or an unannounced visit to investigate a sponsor. When considering what, if any, enforcement action to take against a sponsor, there is a sliding scale of consequences where the Home Office will consider the seriousness of actions and harm done, any previous non-compliance on the part of the sponsor, any action taken to minimise the consequences and the sponsor’s profile, such as whether they have previously received any civil penalties. For example, if, as a result of information available to compliance officers, the Home Office is not satisfied that a sponsor is using the processes or procedures necessary to fully comply with their sponsor duties, the Home Office will downgrade the sponsor licence to a B rating, resulting in an action plan fee and the sponsor being unable to assign any further CoS until improvements have been made.

In taking stock of their compliance systems, sponsors should bear in mind two recent key policy changes. The first is that, as of 6 April 2014, it is possible to apply for a CoS for a five-year period rather than having to apply for three years initially and to extend. Sponsors will now need to be particularly diligent during the validity period of the CoS in monitoring whether any significant changes to the sponsored migrant’s job title, responsibilities or salary during that time necessitate a fresh Tier 2 application during the five-year period. If the change requires a new CoS and leave to remain application and this is not complied with, this could result in a downgrading of the licence to a B rating. The second policy change is the implementation of a code of practice on preventing illegal working, valid from 15 May 2014 and sponsors should ensure that they make any necessary changes to their compliance systems in light of this.

CONCLUSION

The impact of the changes in policy for sponsors and for sponsored skilled migrants remains to be seen. Where their effect is to tighten control over illegal working, this will be a positive result for all, including for those genuine sponsors and their sponsored employees. However, in an environment of greater enforcement of immigration control the government risks sending out the wrong message to international students and to sponsored migrants. Ultimately, for genuine sponsors of skilled migrants who take an interest in the changes and revise their compliance systems where necessary, it should be business as usual.