What's The Point?

Tuesday, January 1, 2008 - 01:00

The UK's new points-based immigration system, which will come into force in 2008, is aimed at simplifying the immigration process - but will it?

The Home Office have gradually released more information relating to the new Points Based System ("PBS") for immigrants that will come into force commencing Q1 in 2008. This is the first real change to the UK immigration process that was originally announced by a succession of Government ministers over the last few years. The changes are part of a massive restructuring of the Home Office, which includes the formation of a new "Ministry of Justice."

The new system is intended to kill two birds with one stone. First, it is intended to simplify the number of possible immigration applications for entry into the UK. Second, it is intended to make the tracking (or at least recording initial entry of immigrant workers) less of a lottery.

How Will This Affect UK-based Employers?

Simplifying the number of immigration applications for entry into the UK - initially - sounds attractive. There are over 80 possible applications that can be made for permission to enter the UK. Whilst some (Japan Youth Exchange or Research Assistant to Members of Parliament) are not commonly used, a significant number of these routes have evolved over time to address specific needs (cultural, political or economic). Put bluntly, a large number of these other routes are ignored with the vast majority of "working" applications being made under the work permit arrangements. Employers are familiar with the process and (generally speaking) happy with the requirements. The fact that there may be a wealth of alternative routes is - to them - an irrelevance.

Even on this basic level, the initiative fails. A number of Government ministers have spoken long and hard about how the 80 odd routes were confusing and unnecessary. Instead, it was proposed to have a simple 5-Tier system:

Tier 1 - Highly skilled individuals;

Tier 2 - Skilled workers with UK job offers;

Tier 3 - Low skilled temporary workers;

Tier 4 - Students;

Tier 5 - Youth Mobility.

Each Tier however has been broken into separate categories, so rather than a dramatic cut from 80 to 5, the number of possible applications will be nearer to 25.

Furthermore, as would be expected, some applications that are possible now will cease to exist under the new regime. Perhaps one of the most concerning to companies transferring senior executives to the UK is the current domestic worker arrangements. Under current rules, a domestic worker (nanny, housekeeper, etc.) who has worked for the family for at least the last 12 months, can come to the UK and - if they remain in the UK for five years, apply for settlement in the same way the executive can. Under the new proposals, the domestic worker will be given a limited six-month permit, during which time the executive is expected to find and hire a local replacement.

Why Change The Work Permit Application?

The Government has suggested that the current system is inefficient, given that in many cases, there are two applications (for example, an initial work permit application followed by a separate visa application). These applications serve completely different purposes. Under the new regime, a single application is proposed. The application may be supported by evidence from the employer (offer letter) but it is the individual that is responsible for completing and lodging the application.

As a result, the employer is no longer in control. This is disadvantageous for a number of reasons. Employers who have built up an experience of immigration applications will be limited with the influence they can exercise. The Border and Immigration Agency ("BIA") - formerly called Work Permits UK - which operates in the same time-zone as the UK-based employer becomes obsolete, replaced by an entry clearance officer in a consulate possibly with a 12 hour time difference. Whilst Fragomen is ideally situated with offices in all the major commercial centres to still be able to have that immediate contact, many companies will not. Finally, in the case of a senior executive moving from one office to another, they now have to complete the entire application process instead of concentrating on running a business.

Whilst these issues are problematic in themselves, it is the removal of the safeguards wrapped up in the two-stage process that is most worrying. Currently, the entry clearance/visa application is an "immigration" application. In the case of a work permit application for instance this means that the visa application cannot be filed until the work permit application has been approved.Therefore, the employee is protected from making an inadequate application.Under the new proposed single application process, the work permit and visa applications are filed together. This removes safeguards for employee - and employer. If there is a technical error regarding the employment (e.g. errors with an offer letter) the visa application is rejected. Traditionally, two visa rejections have led to it being virtually impossible to then enter the UK. Furthermore, by tying the two applications together, an innocent employer's previously good record can be tarnished by a fraudulent employee who perhaps lodges forged degree certificates.

The Government has tried to counter these criticisms by stating that the PBS will be so clear that it should be impossible to lodge an application without being certain that it will succeed. There is a precedent for this approach. The Highly Skilled Migrant Programme ("HSMP") was revised in November 2006. Prior to this time, it was possible for applicants to meet criteria by providing evidence of their previous work experience. The Government became concerned that some applications were being approved with less than genuine evidence and therefore revised the programme. Under the revised criteria, only academic qualification, age, earnings and (to a small extent) time spent in the UK are taken into account. This was on the basis that these criteria can only be supported by evidence that can be fully verified. In February 2007, the Government released figures covering just two months of new applications. Of 2,000 submissions, only 600 had been approved.

How can this be if the new requirements are so clear? One application was rejected because a P60 (annual tax statement given by employers to employees) was not included. The application needs to be supported by a "Tax Return." Not even the UK Inland Revenue consider a P60 to be a Tax Return. Another was rejected because an original BA certificate was not enclosed. The applicant had completed a degree at the Herriott Watt University in Edinburgh (Scotland's premier university). In Scotland, degree courses are over 4 years covering both bachelor and masters courses. At the end, graduates receive a masters certificate - the original of which had been sent.

These are examples of how applications can be rejected on technicalities - not merit. Under the current system, rejection is frustrating. Under the new PBS, it is a visa refusal which potentially bars someone from entering the UK for life.

Alongside the new rules for entry into the UK, there is new legislation to govern illegal employment - the Immigration, Asylum and Nationality Act 2005. UK employers are already familiar with the Asylum and Immigration Act 1996, which created an offence of employing an overseas national illegally. Section 8 of that Act provided the statutory defence (documents to copy) to ensure that employees are legal to work. The 1996 act makes it a criminal offence to employ somebody (after January 27, 1997) who does not have valid permission. The new Act, creates a civil penalty (fine). Cynics have suggested that this is merely a money-making exercise and it is hard to disagree given that a civil penalty can be imposed on "suspicion" - i.e. without proof. The employer then has to prove compliance.

A further change under the civil penalty is the requirement that employers check at least every 12 months that the employee is still legal - at present the employer is required to check on the commencement of employment and only commits an offence if they subsequently know that an employee has become illegal.

What Can The Employer Do?

Watch this space! Despite stating that the PBS will roll out from early 2008, there has been scant detail about how and when employers can prepare. Employers will be required to register with the Government to prove their bona fide trading status and acquire an "A" or "B" rating. "A" is top, therefore all employers will want this given that it should make visa applications overseas more straightforward (the prospective UK employer having already been assessed). It is anticipated that the Employers Register will be published. Therefore anything other than an "A" rating could create issues. For public companies, their share price could be affected by a rating, furthermore, potential employees will also look to check. This could be crucial given that a temporary blip (i.e. a document being miss-filed) could move a company to "B" at the time it is looking for investment or indeed an annual graduate recruitment programme. How do employers register? Again, watch this space. Most employers and certainly those that have dealt with work permit applications should not find themselves having to produce alien documentation. It is envisaged that the rating will last for 4 years and then a re-application process will be necessary. Companies will need to decide whether to make applications for each subsidiary business or to have a "holding" company that makes a single registration for the entire group.

Conclusion

The overall intention is to make the UK harder to enter by moving the decision making overseas. By creating a points-based system, the Government is - in effect - dismissing the knowledge and skill-set built up over the last few decades between employers groups and the Home Office where (generally) agreement could be reached on what skills were required for the good of the UK economy. The clinical approach has failed in respect of the template HSMP revision and it is feared there will be similar failures here - only on a much larger scale. In addition, the new legislation increases the burden on employers to check that their employees are legally entitled to work not only on commencement, but throughout their period of employment - and to keep records of such checks. An innocent employer can easily be found to have failed (e.g. an employee who is legal to work on account of being a spouse, will become illegal if that marriage ends).

By outsourcing much of the control and record keeping, the Home Office will dedicate time and resources to creating checking/enforcement teams that will visit employers (unannounced) and review all files for compliance.

Be compliant!

Gavin Jones is a Senior Manager in the London office specializing in UK in-bound immigration.His clients include many Fortune 500 companies.Prior to joining Fragomen, Gavin led the immigration practice at Taylor Wessing, a lead firm in helping U.S. companies set up in the UK.

Please email the author at gjones@fragomen.com with questions about this article.