UK: Immigration Law Update - September 2009

Last Updated: 15 September 2009
Article by Philip Barth

Changes To Terms And Conditions Of Employment - Notification Or New Work Authorisation?

In our August update we gave details of the changes in the sponsorship guidance notes relating to changes to terms and conditions of employment. This month's update explores this issue in more detail.

During the course of employment, changes to the terms and conditions of employment may occur for a variety of reasons. Some changes to a migrant worker's terms and conditions of employment only require notification to the United Kingdom Border Agency (UKBA) – these are called technical changes - whilst others require fresh work authorisation, eg the issue of a fresh Certificate of Sponsorship (CoS) which in turn may require a fresh resident labour market test (RLMT).

It is essential therefore to be able to distinguish between technical changes and other changes that necessitate fresh work authorisation. If changes of the more substantial type take place without prior work authorisation, this may invalidate the employee's work permit or CoS with potentially serious consequences both to the employee and the employer if the UKBA has not approved them.

The action, if any, which needs to be taken depends on whether the migrant worker is here under a work permit issued under the former work permit scheme, or is a sponsored migrant under the PBS.

Work Permit Scheme

Technical changes need to be reported using the specified form (Notification of Technical Change) together with payment of an official fee of £20.

To be considered as a technical change of employment, the UKBA needs to be satisfied that the individual will continue to work under the same terms and conditions and continue to meet the work permit criteria.

What Amounts To Technical Changes Under A Work Permit?

The UKBA does not need to be notified regarding changes to an employee's home address, gender changes not recorded on an employee's passport and salary increases as a result of annual increments or other annual pay awards paid to most staff.

In all other circumstances the employer will need to report the change to the UKBA. If the UKBA accepts that the changes are technical, it will update the details on its systems and write confirming that the changes have been accepted and that the employment continues to be approved.

Any significant changes to location, salary, level of job or working hours are not considered as technical changes and will be regarded as a change of employment. While the work permit scheme was in existence, this would necessitate an application for approval to a change of employment. Following the introduction of the PBS, this will have to be by way of the issue of a fresh CoS, which may require a fresh RLMT, and the filing by the migrant worker of a fresh application for leave.

Acceptable Changes:

The UKBA will accept the following changes to the employee's terms and conditions as a technical change:

  • changes to the individual's personal details, such as change of name on marriage;
  • changes to the company's business address and/or name because of re-branding or relocation;
  • where both the employee, and the specific job they were approved for, move location;
  • restructure of the company due to takeover:

If there is restructuring within the company as a result of the takeover, the new employer will need to provide details of the restructure, for example, evidence of any redundancies. The UKBA will then assess whether the change can be accepted as a technical change; and

  • temporary reductions in working hours where employers are reducing workers' hours to avoid making redundancies during the current economic climate. These will be accepted as technical changes provided all of the following conditions are met:
  • the work permit holder is continuing to work in the same job, with reduced working hours;

  • the reduced working hours are part of a company-wide policy to avoid redundancies;

  • you are not treating migrant workers more favourably than resident workers;

  • the pay or working hours do not reduce by more than 30%;

  • any reduction in wages is proportionate to the reduction in hours;

  • the arrangements will be in place for no more than one year.

Unacceptable Changes

The UKBA will not accept the following changes to the employee's terms and conditions as a technical change, and it will be necessary for the employer to issue the appropriate PBS migrant worker authorisation which may require a fresh RLMT, and for the migrant worker to obtain the grant of fresh leave, before the changes take place:

  • the permit holder's duties have changed due to promotion, demotion or restructuring;
  • the permit holder's salary has risen significantly; that is above normal annual increments or pay awards applied to all, or most, staff;
  • salary reductions, unless applying to all staff;
  • salary reductions where the salary falls below the National Minimum Wage (or below the 'going rate' for the job);
  • the working hours have been increased or reduced significantly (by at least 10%), unless as a temporary reduction in working hours, to that indicated in the work permit application; and
  • the permit holder is required to move to a different location to do a similar job for you, but the job for which the permit was issued remains in the original location.

Tier 2 Of The Points Based System

The UKBA has surprisingly not carried across into the PBS the detailed guidance under the work permit scheme relating to technical changes. However, it is our view that where the PBS guidance is silent, it may be possible to place reliance on the work permit scheme guidance.

What Amounts To 'Technical' Changes Under The PBS?

Under the PBS, the requirement to notify 'technical' changes arises under the generic reporting duties of a licensed sponsor. Under these, the sponsor is only required to report significant changes in the sponsored migrant's circumstances, such as:

  • a change of salary from the level stated on the migrant's CoS (other than changes due to annual increments, bonuses or natural progression within the same job provided this progression is at the same level and is not a promotion); and
  • where the location the migrant is employed at changes.

The employer will need to report the change to the terms and conditions of employment using the Sponsor Management System within 10 working days. There is no fee payable.

No further guidance is given on what amounts to a significant change in the sponsored migrant's circumstances. Where the employer is uncertain whether the proposed changes to an employee's terms and conditions of employment will be accepted by the UKBA as technical, then it is advisable to notify the UKBA of the proposed changes and only once they are accepted as technical to implement them. This will avoid a situation where the changes are deemed by the UKBA as substantial, thereby invalidating the employee's current work authorisation and rendering the employment illegal.

What Amounts To A Change Of Employment Requiring Fresh Authorisation?

The sponsor guidance states that where the migrant is continuing to work for the same sponsor, but their core duties and/or responsibilities change, or where their position in the hierarchy of the sponsoring organisation changes, for example due to a promotion, this is treated as a change of employment.

The employer will need to carry out a resident labour market test (where appropriate) to show that no suitable settled worker is available to fill the position, issue the employee with a new CoS and the migrant must then make a new application for leave under tier 2.

The migrant's application for leave must be approved by UKBA before they can start work in their new job. This applies regardless of whether the new job is with the same sponsor or with a new sponsor. In the meantime, the migrant can continue working in their original job, for their original sponsor (provided their previous leave has not expired) until the start date of the new job, which should be the start date given on the new CoS.

Consequences Of Failure To Report Changes Of Employment

If a technical change of employment is not reported, or prior approval to a change of employment is not obtained, there can be severe consequences. The individual's employment can be categorised as unauthorised, the work permit/CoS revoked, their leave to enter or remain curtailed and they can be removed for breach of conditions, which will lead to a mandatory re-entry ban of at least 12 months. The employer might have a civil penalty of up to £10,000 assessed against it, have its ability to bring in other migrant workers restricted and in serious cases may have a criminal prosecution brought against it and its directors and other officers.

It is therefore essential that employers (and migrant workers) have systems in place to monitor any proposed changes to the conditions of employment of migrant workers. A decision can then be made as to whether it is necessary to notify the UKBA of the change or whether it is necessary to issue a fresh CoS, which may require carrying out a fresh RLMT, and for the migrant to obtain a fresh leave based on the new CoS.

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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