Employing migrant workers

The need for migrant workers to fill skills shortages and low-skilled positions is as strong as ever. We outline the recent proposals for entry criteria to the UK and the system as it stands.

Learning points The government has announced the biggest changes to the management of migration to the UK for 40 years, and is planning to introduce a points-based system similar to that used in Australia. The new scheme should be much simpler and easier to operate. The changes will have the greatest negative impact on employers wishing to employ low-skilled migrant workers from outside the European Economic Area. The plans are expected to be phased in over the next two years; until then, the current system remains in place. This article explains both the proposed and current systems for employers wishing to recruit from overseas.

The introduction of an Australian-style points-based system for immigration, announced by Home Secretary Charles Clarke¹, represents the biggest shake-up of the UK's immigration system for 40 years.

The new system, which will be phased in over the next two years or so, aims to attract the "brightest and best" from the developing world to work and settle in Britain. It does not affect those who apply to work from within the European Union, its accession states or the broader European Economic Area (EEA).

The five-tier immigration system will include points awarded to reflect aptitude, experience, age and shortages in the UK's labour market. It has been designed to concentrate on skills, so that the more in demand the skill, the more likely an individual with the requisite skills and experience will be able to come to work in the UK.

However, the changes mean that all demand for low-skilled labour is expected to be filled by jobseekers from the 28 countries in the EEA (listed in box 1 ). It will all but cut off the supply of low skilled labour from outside these states, which will particularly affect agriculture, catering and hospitality employers.

Employers looking overseas

Almost four in 10 respondents to the Chartered Institute of Personnel and Development's latest annual survey on recruitment, retention and turnover² recruited non-UK residents in the previous year. Of those, more than half (53%) said that their intake had increased.

Research conducted by the Institute for Employment Studies³ on behalf of the Home Office confirms the importance of migrant workers to UK employers. The employers interviewed by the researchers said that migrants are sometimes preferred to domestic (UK) workers, particularly in the agriculture and hotels and catering sectors. Most of those interviewed believed that their businesses would suffer - or would not survive - without migrant labour, particularly firms operating in low-skills sectors.

In the high-skills sectors - especially administration, business, management, finance and accountancy - migrant workers were less likely to be as crucial to the business.

Labour shortages, rather than skills shortages, were the primary reason given for recruiting foreign workers. Those interviewed had tried initially to attract domestic workers, through jobcentres or local advertisements, but were turning to migrant workers because of the difficulty in filling their vacancies. While there were people available domestically to fill the posts, the conditions, pay, hours or nature of work were unattractive.

Recruitment difficulties were less widespread in the high-skills areas, and were due primarily to shortages of applicants with the skills and experience required, rather than absolute labour shortages.

The present system

Currently, there are 80 different routes into the UK to either work or study. These channels have evolved over the years, rather than emerging from an overall strategy. It is a complicated and labour-intensive process, and means than employers looking to fill skills and labour shortages may have to negotiate through several different entry routes. For example, a scientist will have to meet different entry criteria from a student, who in turn will be governed by different rules than those applying to a Chinese chef.

As a result, this complex system lacks clarity and is not a straightforward one to administer, which can lead to inconsistent decisions on the part of the Home Office regarding individuals' right to work. It also makes it more difficult for organisations to gain access to the skills they require to meet the needs of their business.

The current situation involves a two-stage process, which can result in an employer being granted a work permit (offered for functions deemed to be in areas of skills shortage in the UK), but the prospective migrant can subsequently be turned down for entry or leave to remain.

Alongside this, there are some categories in place that were appropriate at a previous point in time to meet skills shortages, but are no longer necessary. For example, certain doctors and dentists can come to the UK to train, even where they do not have a training post for the full duration of their study. Given the increasing number of graduates from UK medical schools, and the reform of the training structure, the UK no longer depends on overseas nationals from these professions.

Essentially, the current system seems to have three main problems: not attracting or identifying the migrants of most benefit to the UK; complex, subjective and overly bureaucratic processes; and a need to improve compliance-management and reduce abuse of the system.

Who can I employ currently?

Citizens of any country in the EEA, together with Switzerland, are entitled to work in the UK without special permission or a work permit.

However, migrants from eight of the 10 countries that joined the EU on 1 May 2004 are required to register with the Home Office under the Accession States Worker Registration Scheme if they plan to work for a UK employer for more than one month. These countries are:

the Czech Republic;

Estonia;

Hungary;

Latvia;

Lithuania;

Poland;

Slovakia; and,

Slovenia.

The fee for applying to register on the Worker Registration Scheme is £70, and is a one-off fee with any subsequent applications to renew it being free of charge.

According to government statistics, around 329,000 workers from these eight accession states registered to work in the UK between May 2004 and the end of 2005⁴.

Others who can take up employment in the UK without a work permit, immigration employment document or other specific permission to work in the UK are:

those with indefinite leave to remain in the UK (permanent residence);

those living in the UK as a dependant of an EEA national;

those in the UK: as a dependant of a work permit holder; having "Highly Skilled Migrant" status; as a "Sole Representative" (individuals in this category cannot work as an investor, only in self-employment); as a UK ancestry visa holder; and certain individuals in other categories⁵;

Commonwealth citizens with UK ancestry; and

those with permission as a student (who are entitled to work for up to 20 hours a week during term time).

All other non-EEA nationals must have a work permit, immigration employment documentation or other specific permission to work in the UK.

The onus is on employers to ensure that they do not employ someone who does not have the right to work in the UK. It is a criminal offence under the Asylum and Immigration Act 1996 to recruit someone who is subject to immigration control and does not have permission to work in the UK, or who has not been granted leave to enter or stay in the UK.

Before employing someone who is subject to immigration control, employers are expected to take the following steps to check the applicant's right to work in the UK:

see original documentation from the job applicant indicating that they have the right to work in the UK;

check that all documents relate to the job applicant; and

either retain the document itself or keep a copy of it.

Copies of such documentation should be kept for the duration of the person's employment and for six months after termination. Employers are not expected to check the authenticity of documents produced for this purpose, or to make any specific enquiries to establish whether or not the job applicant has permission to work in the UK, unless there is clear evidence to suggest that employment would be illegal.

There is also no obligation on the part of the employer to check that existing employees continue to have the right to work in the UK, or to make checks on those who were in employment prior to the implementation of the Asylum and Immigration Act on 27 January 1997.

Employers must also be mindful to avoid race discrimination in recruitment. The main pitfall is to treat someone differently during the recruitment and selection process - or even to not consider that individual for a position - just because they appear to be of a different nationality. For example, singling out ethnic minority applicants when asking for evidence of their ability to work legally in the UK while omitting to ask other jobseekers would amount to unlawful race discrimination.

There are two codes of practice that aim to help employers observe their respective legal duties under the laws covering immigration and equality.

The Commission for Racial Equality's revised Statutory code of practice on racial equality in employment came into force on 6 April this year (free from www.cre.gov.uk ). This advises that: "Information about eligibility to work in the UK, which employers are required to obtain under the Asylum and Immigration Act 1996, should preferably be verified in the final stages of the selection process, to make sure the appointment is based on merit alone, and is not influenced by other factors."

More detailed information is given in a Home Office code of practice Immigration and Asylum Act 1999 - Section 22: Code of practice for all employers in the avoidance of race discrimination in recruitment practice while seeking to prevent illegal working (free from www.ind.homeoffice.gov.uk ).

The latter code recommends that all applicants should be treated in the same way. This means incorporating simple checks into an organisation's recruitment procedure so that the same information is requested of all candidates.

All change

In February 2005, the government signalled its intention to make changes to the employment of migrant workers with the publication of a new five-year strategy: Controlling our borders: making migration work for Britain, five-year strategy for asylum and immigration.

Following on from this, in July 2005, it published a consultation document Selective admission: making migration work for Britain. The consultation concentrated on three issues: its proposed points-based approach to managing migration; identifying and attracting those with recognised skills shortages; and an English language requirement.

The document was sent to 2,400 people and 517 responded by the November 2005 closing date. There were also events run throughout the UK by the Home Office, the Joint Education Taskforce and the Institute for Public Policy Research.

The result of this consultation exercise is the five-tier system, outlined below. At the time of writing, there are no set dates for implementation, but it is expected that the new system will be phased in over the next two years.

The application process will be on a self-assessment basis initially, and conducted online wherever possible. The completed self-assessment form will provide the basis of the application, and the applicant will have to provide independently verifiable documentation to support their application. Such checks would be with a university, in the case of a degree certificate, and a bank, in the case of bank statements.

Employers or institutions bringing migrants to the UK will be designated sponsors, and all those migrants qualifying within tiers two to five, inclusive, of the new five-tier scheme, will require a certificate of sponsorship.

Employers and education institutions will have a responsibility to ensure that the applicant has the ability to undertake a particular job, or course of study, and identify, as far as possible, the trustworthiness of the applicant. However, while an initial relationship between prospective overseas applicants and employers will have been established, it will be difficult for many to assure themselves totally of the suitability and trustworthiness of the applicant.

The five-tier system

The current complex process will be replaced by a single points-based system. It aims to ensure that current and future skills shortages are placed at the heart of the entry scheme through the creation of a Skills Advisory Body (SAB). It should mean that only those with the skills that are required in the UK economy will be given leave to work in the UK. Table 1 outlines the differences between the current and proposed arrangements.

The SAB will have responsibility for identifying shortages in skills and labour on a sectoral basis. The board of the Sectors Skills Development Agency will take on the responsibilities of the SAB, and will deal with identifying skills shortages for entry through tier two, but will also provide advice on the need for specific low-skilled routes under tier three. However, responsibility for decisions on skills gaps and shortages will remain with the government.

The five-tier framework will cover all those who wish to apply to work in the UK. The tiers are defined below.

Tier one

Tier one of the system will cover highly skilled individuals, such as doctors, scientists and top-flight entrepreneurs. Workers in this category are expected to enjoy the most flexibility and opportunity to settle in the UK because the system would regard them as having the most potential for generating wealth, such as by setting up companies and creating jobs.

Those who qualify in this tier will not need a job offer and will have unrestricted access to the UK's labour market. They will also not need a sponsor.

This tier will replace the Highly Skilled Migrant Programme (HSMP), which is already points-based. The new system of qualification in tier one is based on research from existing HSMP entrants, alongside research from other countries, to establish the attributes that have been deemed to best predict success in the labour market.

The objective attributes that have emerged from this research are qualifications and previous earnings, bonus points for being under 32 years of age and having a UK-equivalent qualification or earnings, and an English language requirement.

Previous salary is included because the analysis of the existing HSMP indicates that this is the most effective predictor of success in the UK labour market. Previous salary will be weighted by the country in which it was earned. We have reproduced the proposed points model for tier one in table 2.

Skills and English language emerged as two primary attributes from the consultation process. Age is included as a bonus attribute, on the basis that it gives employers the ability to employ younger migrants with recognised potential, as well as older migrants with established careers.

Tier two

Tier two will apply to skilled workers who already have a job offer as a means of filling gaps in the UK's labour force. It will cover people with qualifications or work-related experience in a large range of sectors from health service workers to white-collar jobs and skilled trades. People in this category will be given points and allowed entrance if they have a job offer in a "shortage area" - currently, two such areas include teaching and nursing.

This mode of entry is designed to be an employer-led system for medium and highly skilled migrants. So, if an applicant does not have a job offer, they cannot enter the UK under tier two.

Employers making a job offer to tier-two migrants will need to be registered with the Home Office on a list of approved sponsors. Alongside this, the job offer must relate to a job or function that has been identified as a shortage area by the SAB. If it does not, then a test of whether the applicant will be displacing a worker in the domestic or EU labour market will first need to be conducted.

Tier three

Tier three will cover the limited number of low-skilled workers needed to fill specific temporary labour shortages in the UK.

This tier will effectively rule out low-skilled migration from outside the European Economic Area. Those routes that remain will be quota-based, time-limited and subject to review, and will be based on the identification of temporary shortages by the SAB.

During the consultation period, the Home Office received a strong response from the agriculture and hospitality sectors pressing the point that low-skilled migration provides an essential support mechanism for businesses in these sectors, because UK workers are often not prepared to take these jobs.

The government ran a parallel review of the existing Seasonal Agricultural Workers Scheme during the consultation period, the conclusion of which is that this means of entry will be phased out by 2010.

For the new system to remain flexible and responsive to the changing needs of the labour market in the UK, it is proposed that the SAB will identify temporary skills shortages. Employers are expected to recruit from within the EU before looking to migrant labour outside its borders. When a skills shortage has been identified, recruitment will be allowed for a maximum of 12 months and the person cannot be accompanied by dependants.

Tier four

Tier four covers students paying for tuition within the UK, and reflects the importance of this source of income for British universities and colleges.

Tier five

Tier five covers youth mobility and temporary workers - people who are allowed to work in the UK for a limited period of time to satisfy primarily non-economic objectives. It will include professional musicians and professional sports people who want to "work" in the UK for an event such as the Olympics or a football match. The youth mobility aspect is expected to cover cultural exchanges and working holidays by young people.

The future

So far, the government has not committed itself to a definite timetable to implement the new points-based system of worker migration to the UK. The five tiers will be tested and introduced in stages over the next two years or so. Ultimately, the government hopes to both satisfy public concern about the current complex and poorly controlled system of immigration and meet employers' demand for recruits.

In his foreword to the government's recent set of proposals, Charles Clarke said that he wants "employers and those in educational institutions to take ownership of migration to this country". In partnership with the Home Office, they "will be able to vet who comes into the UK, according to the skills and talents of individuals they feel they need to enhance their sector".

¹A points-based system: making migration work for Britain, Home Office, March 2006, www.homeoffice.gov.uk .

²Recruitment, retention and turnover: annual survey report 2005, Chartered Institute of Personnel and Development, 2005, www.cipd.co.uk .

³Employers' use of migrant labour, Institute for Employment Studies, Home Office, March 2006, www.homeoffice.gov.uk .

⁴Accession monitoring report, May 2004-December 2005, National Statistics and Home Office, 2006, www.homeoffice.gov.uk .

⁵See the Immigration and Nationality Directorate website at www.ind.homeoffice.gov.uk for further information.

Box 1: The European Economic Area Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, The Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, UK.

Table 1: The current and proposed entry schemes

From	To	Tests met	Benefits delivered
A large number of schemes evolved to meet particular needs as they arose.	A coherent and flexible five-tier system that is explicitly designed to support the UK's economic and border-control objectives.	Transparency Usability Flexibility	Economic and international competitiveness Cultural and social Political and international development Control
A two-stage process, where immigration issues are assessed by visa-issuing ports abroad, and employment qualifications are assessed by Home Office in the UK.	A single interface and application process for all applicants.	Transparency Operability Usability Cost-effectiveness	Reputation Economic and international competitiveness
Decisions based on a wide range of entry criteria, some of which are subjective, and therefore have recourse to appeal.	Decisions made using an expanded points-based system and other objective criteria where possible, thus providing more consistency, and are supported by administrative review where appropriate.	Objectivity Transparency Operability Usability	Control
Limited mechanisms for addressing abuse of the current system.	Greater control through sponsors, operators and financial securities.	Robustness	Control
An understanding of skills shortages for some sectors.	A comprehensive analysis of shortages by sector, provided by a new Skills Advisory Body.	Flexibility Objectivity	Economic and international competitiveness

Source: "A points-based system: making migration work for Britain", Home Office, 2006.

Table 2: The points model for tier one

This is subject to testing and revision, and is not necessarily the final version that will be used. The pass-mark for the table is 75. Points can be scored in each of the four columns.
QUALIFICATIONS	PREVIOUS EARNINGS1		AGE		OTHERS
Bachelors:	£16,000-£18,000:	5 points	27 or under:	20 points	Where previous earnings or
30 points	£18,000-£20,000:	10 points	28 or 29:	10 points	qualifications have been
or	£20,000-£23,000:	15 points	30 or 31:	5 points	gained in the UK:
Masters:	£23,000-£26,000:	20 points			5 bonus points
35 points	£26,000-£29,000:	25 points			(maximum of 5 in this
or	£29,000-£32,000:	30 points			category)
PhD:	£32,000-£35,000:	35 points
50 points	£35,000-£40,000:	40 points
	£40,000+:	45 points

¹UK equivalents: the actual earnings wil be weighted to take account of the country in which they were earned as they are at the moment for the Highly Skiled Migrant Programme.

Source: "A points-based system: making migration work for Britain", Home Office, 2006.