UK: Further Tightening Of UK Immigration Rules

Last Updated: 14 July 2011
Article by Joanne Hennessy

I reported in March of this year that changes to UK immigration rules (which came into effect in April) would limit the number of non-European Economic Area (EEA) migrants entering the UK. That briefing note can be found here.

The Government is not finished with its overhaul of UK immigration rules and has launched a consultation on further proposals to reduce net migration. The issue now under the spotlight is employment-related settlement (i.e. indefinite leave to remain in the UK). According to the UK Border Agency, in 2010, there were 238,000 grants of settlement, 84,000 of which were from employment routes. This compares to 59,000 grants of settlement in 1997, less than 10,000 of which were employment related.

The Government believes settlement in the UK should be a privilege, not an automatic entitlement of temporary migrant workers. Further, settlement should be reserved for those who will contribute most to the UK. The Government is proposing to reform the way in which settlement rights are granted to non-EEA nationals who work in the UK with effect during 2012. Immigration Minister Damian Green has said that the proposals "are aimed at breaking the link between temporary and permanent migration. Settlement has become almost automatic for those who choose to stay. This needs to change."

Current Position

  • Those who spend a continuous period of five years lawfully in the UK can apply for indefinite leave to remain in the UK. Once a person has obtained settlement, they can live in the UK permanently on the same basis as a British citizen (but without British citizenship).
  • Settlement is available to Tier 1, most Tier 2 and a small number of Tier 5 migrants under the Points Based System.

Key Proposals

  • All visas will be categorised as either "temporary" or "permanent". "Permanent" visas will allow migrants to apply for settlement
  • Tier 1 temporary leave will be capped at five years and the number of exceptional talent migrants granted settlement will be restricted.
  • Tier 2 (i.e. the route by which most non- EEA workers enter the UK) will be rebranded as "temporary", ending any prevailing assumption that settlement will automatically be available to Tier 2 migrants. Leave will be capped at five years (i.e. initial leave of up to three years, plus an extension of up to two years). Migrants who entered the UK under this tier since April 2011 will have no direct path to settlement.
  • After a maximum of five years, most Tier 2 migrants and their dependants will be expected to leave the UK. It is not clear whether such migrants will be able to reapply for a Tier 2 visa after leaving the UK.
  • Certain categories of Tier 2 migrants (e.g. those earning over £150,000 or in occupations of specific economic or social value to the UK), will have an automatic route to settlement.
  • A new permanent visa category will be created which the most exceptional Tier 2 migrants could switch into (subject to robust selection criteria) after three years in the UK and go on to apply for settlement (there may be a limit on the number of individuals able to do so).
  • Employers will be given a direct role in a migrant's application for settlement. This may include confirmation from the employer that they expect the resident labour market to be unable to supply a suitable worker for the foreseeable future and/or that the employer acts as a direct sponsor and pays a financial contribution in support of the application for a permanent visa.

What Will This Mean for Employers?

The proposal likely to be of most concern to employers is the restriction on the settlement rights of Tier 2 migrants (the category most commonly used by non-EEA migrants working in the UK).

This proposal could severely restrict an employer's ability to recruit and retain the highly skilled workforce it requires. Key employees could be lost if they have to leave the UK because they are not eligible for settlement. This could be disruptive and make workforce planning difficult.

It is clear that the Government wants to "encourage employers to look beyond migrant workers to upskill the domestic labour force".

However, despite Iain Duncan Smith's recent controversial plea for British employers to take on more British workers, preferring British applicants to avoid such headaches could give rise to race discrimination claims.

Will the proposals, if implemented, impact your workforce planning? Does the UK labour market provide the talent pool you need in your business? Employers affected by the proposals are advised to make their views known before the consultation closes.

A copy of the consultation document ("Employment-related Settlement, Tier 5 and Overseas Domestic Workers: A Consultation) can be found here. The consultation will close on 9 September 2011.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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