Archive for the ‘Immigration’ Category

There have been growing concerns that the Intra-Company Transfers system is being routinely abused. Now the Conservatives, in a policy announcement in the run up to the forthcoming general election, say they will impose a cap on the number of visas if they come into power.

Intra-company transfers were introduced as a means for overseas companies to fill requirements in the UK for high-level skills or company-specific knowledge. It allowed them to bring people in from other countries to meet those needs. However, some overseas companies are reportedly setting up subsidiary companies here simply to take advantage of the UK’s outsourcing market and are bringing in people to fill entry-level and mid-level roles. Around 43% of the near 30,000 intra-company transfer visas allocated last year went to just seven Indian companies and the belief is that they get them just to save on salary costs.

The major gripe is that the Home Office seems unable or unwilling to get a control of the situation. However, the Conservatives say they plan to place a cap on the numbers allowed in although, in typical political style, they won’t commit to a number. It is a policy that is used in America and tends to lead to a stampede for available visas, which are usually snapped up pretty quickly.

This does raise some doubts as to if the proposal will actually turn into anything and, if it does, how it will work. Nevertheless, if some control is imposed on the availability of intra-company transfers, this may open up further opportunities for UK contactors.

Intra-company transfers were designed so that overseas companies that needed high-level skills or company specific knowledge could bring workers into the UK to fill the requirement. However, recent figures obtained by the Association of Professional Staffing Companies (APSCo) under freedom of information rules suggest that the system is being abused on a large scale.

Figures provided by the Home Office showed that 29,240 non-European IT workers entered the UK in 2008. Of these, 12,573 or 43% were sponsored by seven firms from India. The majority of these people were brought in to fill entry-level or mid-level roles, which rather conflicts with the aims of the intra-company transfer system. Indeed, the National Shortage Occupation list currently contains no IT posts, reinforcing the view that the positions could have been filled by UK-based workers.

The situation is particularly galling given that the majority of these companies have achieved their success largely through the off-shoring of UK IT jobs to India. What they now seem to be doing is setting up subsidiary companies here so that thy can take advantage of the outsourcing market in this country.

This state of affairs might be acceptable if these companies were operating on a level playing field. However, as Ann Swain, Chief Executive of APSCo points out, they seem to be exploiting a lack of enforcement of the rules: “Foreign companies are supposed to pay workers brought in on intra-company transfers UK market rates but you have to wonder whether there is some economic benefit to transferring Indian workers from a low wage economy to the UK. If there is no cost saving, then why do they do it? How exactly is the Home Office policing this?”

The answer seems to be that the Home Office isn’t policing the situation at all. No matter how clear the rules, they’re not much good if they’re not enforced.

Recent figures obtained by APSCo showed that over 29,000 IT workers came into this country on intra-company transfers in 2008 from non-EU countries. This is more than twice the number for all other professional service sectors put together. The figure fuels the suspicion that the IT industry is increasingly reliant on cheap labour to remain competitive and is particularly galling when there is a shortage of IT posts due to the economic situation.

The apparent free flow of labour contrasts with the claimed tightening of control over the UK’s previous open borders policy and also with India’s recent restrictions on foreign labour. That country is now requiring that all foreign nationals wanting to work there have to obtain an employment visa. In addition, strict guidelines have been introduced to ensure that visas are only issued for business purposes that conform to strict criteria. The new ruling has resulted in a degree of panic, with many business people hurrying to comply so they can continue to work.

At the same time that India is clamping down in its own country, it is seeking to increase the number of US visas that are issued each year. The limit on H-1B visas, which are available to skilled professionals wanting to work in the US, was halved to 65,000 around two years ago. Despite the quota being more than adequate in the current economic situation, it is thought that this will not be the case once the market picks up. With Indian companies usually taking up a large proportion of the allocation to fulfill US contracts, the country is keen to get the limit raised.

Even were this to happen, the number of foreign workers in the US is still likely to be proportionally less than those in the UK, taking into account the different population sizes. The new points-based system that is being introduced for the UK may do something to redress the balance and create a more level playing field.

The EU Agency Workers Directive, which has been hanging over the contracting industry for some time, is to be delayed. Business Minister Pat McFadden announced on 16th October that the new law will be put off until the latest allowed date of October 2011. The action is apparently intended to help businesses as they struggle with the recession and it is hoped that conditions will be improved by the time the law finally takes effect.

As with many directives from the EU, the aims are admirable but the consequences might not always be as intended. The Agency Workers Directive sets out to protect ‘vulnerable’ temporary workers by granting them the same rights as full-time employees after they have worked for a company for twelve weeks. These rights include equal pay and holidays.

Doubts have been expressed as to whether IT contractors are vulnerable and need this level of protection, particularly since their pay rates generally exceed those of full-time employees. More importantly, there are real fears that the legislation will seriously damage job prospects, particularly if it is rushed through. If so, it is likely to hit Britain harder than most since it has more agency workers than any other European country.

The announcement of a delay is at odds with a promise given by Prime Minister Gordon Brown. He told the TUC only a month previously and reaffirmed at the Labour Party Conference that the directive would be law “in the coming few months”. In addition to the delay, changes will result in the owners of limited companies, self-employed people and managed service workers being excluded from the provisions. However, those using umbrella companies or who are considered not to be genuinely self-employed will be covered. Reactions have been predictable, with employers and contractors’ representatives generally welcoming the delay but trades unions regretting that vulnerable employees will remain open to exploitation by unscrupulous employers.

The decision followed an earlier announcement by the Conservatives at their party conference that a Tory government would delay adoption of the directive until the latest possible date. They estimate it will cost £40 billion over ten years and destroy thousands of jobs.

6 October 2009

For overseas contractors wanting to work in Britain, the usual route was the Highly Skilled Migrants Programme. That door was firmly closed on 29th June 2008 and so now, if you want to get into the UK to work, you have to conform to a new points based system.

If you’re a highly skilled worker, you apply under Tier 1 (General) of the system. You don’t need a specific job offer but you must show you are highly skilled, have sufficient money to support yourself and can speak English. Those with lesser skills come under Tier 2 and must have a job offer from a licensed sponsor. In each case, you earn points for qualifications, earnings, funds, standard of English language and, for Tier 2, having a certificate of sponsorship. If you were originally granted admission under the Highly Skilled Migrants Programme, transitional rules apply and vary depending on your circumstances.

Once you’ve been in the UK for a number of years, you may be able to qualify for full British citizenship. Under the Borders, Citizenship and Immigration Act 2009, a system of ‘earned citizenship’ will govern the process. The final date for consultation response is 26th October 2009 and the earned citizenship provisions are due to be implemented in July 2011. A three-stage process will be introduced and migrants can follow one of three routes to progress to citizenship. The work route applies to highly skilled and skilled workers while others will follow the family route or the protection route.

The first stage is temporary residence and you have to spend a minimum of five years in the UK before moving to the next stage. During this time, you must obey the law, pass a test of English language skills and knowledge of life in the UK, and remain in employment and paying taxes.

Stage two is probationary citizenship and lasts between one and five years, with a requirement to demonstrate you have earned the right to stay. You must continue to obey the law and be self-sufficient with no access to benefits. If convicted of any offence, you can’t move to the final stage until the conviction is spent. Time at the probationary stage can be reduced by two years by contributing as an ‘active citizen’. This basically means getting involved in good work, generally by volunteering to work for a charity or community body.

After spending five years as a probationary citizen, you have either to leave the UK or move to the final stage. This means becoming a British citizen with full entitlement to rights and benefits or, if issues such as dual nationality prevent this, getting permanent resident status.

The new rules give a defined path for migrants wanting to work in the UK. However, they can be confusing and you need to be clear what you need to do. Visit the Border Agency’s website or seek advice.