Ignore the effect of Brexit for now – are there changes afoot for workers from further afield?

Posted on: June 1st, 2016

In December 2015 the Migration Advisory Committee (”MAC”) published a report highlighting the growing use of “Tier 2” skilled workers, entering the UK on visas by way of intra-company transfers (“ICTs”).

Under these arrangements, employees of multi nationals can be transferred to the UK to fill a specific vacancy or for training that cannot be filled by a worker from the European Union. There are no limits on how many workers can come to the UK to work under ICTs, and it is reported that the numbers grew from 28,653 in 2009 to 44,618 in 2014.

A typical example would be a large manufacturing international company which had a production line in the UK. It may well be that the installation of a new assembly line is required in the UK, and typically a very skilled employee of that multi national from abroad will be brought in to set up and run that for a period of time. This has obvious benefits for manufacturing within the UK, UK employment of staff on that assembly line, and all the spin off trade for those providing goods services to the assembly line, both at set up stage and at production stage.

The difficulty is, however, that there are less scrupulous models set up. Typically, this takes the form of a consultancy which brings in overseas IT workers. Those IT workers are then hired out under agency arrangements to UK companies. Whilst the immigration regulations require those workers to be specialist and senior managers, often this turns out to be very routine and rather less specialised work.

One of the recommendations in the MAC report is to raise the minimum salary threshold for ICT transferees to £41,500 from the current £24,800 – this may make EU workers sourced by agencies within the UK and EU as, or more, attractive –an opportunity for the UK recruitment sector.

The enhancement of regulations may well make the use of ICT transfers less attractive. It is also suggested that bringing in these workers will be more complicated and more expensive, and some providers will simply give up. As a result, it is possible that some companies are likely to recruit more European workers or alternatively, and more worryingly for the British economy, it may force some companies to move the jobs and roles offshore to where the candidates can be more easily found.

Often ICT transferees are used in the IT sector, and if the role in question involves, for example, writing code, there is no reason why this cannot be done from outside the UK. Other recommendations for MAC include imposing a proposed immigration health charge of up to £2000 per year to reflect the cost of the individuals use of the National Health Service, and a requirement to increase the level of experience required from one to two years in order to be able to take advantage of the ICT route may well also have an effect on ICT’s.

There is however an undoubted political pressure to cut the number of migrant workers coming into the UK, and restricting numbers entering via the ICT route may just be something that employers will have to live with – thus placing even greater importance on the European work pool.

For further information please contact Amanda Brockwell, head of our specialist Recruitment sector team.