Crystal Umbrella

The coalition recently announced an immigration cap which has been met with some criticism. Now the Association of Professional Staffing Companies (APSCo) has stated that the cap will do little to reduce the number of non-EU IT workers who come to the UK. This is because the cap proposed by the government is exclusive of the intra-company transfer scheme which allows companies to transfer in workers from bases they have in other countries if that worker has skills which are not available in the UK.

APSCo said that figures show these intra-company transfers are responsible for over 80 per cent of foreign IT workers who come into the country on work permits. APSCo believes that there should be tougher rules governing these intra-company transfers.

Their chief executive, Ann Swain, said: “More than 80 per cent of non-EU IT workers coming to the UK on work permits are intra-company transfers, so if the Government doesn’t look at this issue, the cap will be little more than an empty gesture.
“APSCo has consistently argued that employers using intra-company transfers (ICTs) should be audited more rigorously to ensure workers being brought in are not undercutting UK market rates. The UK Border Agency, which has responsibility for enforcement, could do much more to investigate alleged abuses of the system.
She concluded: “We would prefer tightening up the intra-company transfer rules rather than an outright cap. A cap would be unwieldy and unresponsive to the market. What if an employer cannot fill an urgent, niche requirement but the cap on intra-company transfers has already been reached? The new rules will stop small UK-owned IT businesses from plugging skills gaps, but won’t stop IT giants with global office networks from bringing staff to the UK on an industrial scale.”

The government have formally responded to the Intra Company Transfer petition. Their message is that the scheme does not allow cheap migrant workers to be employed in place in UK workers. The petition aimed to highlight the unfair use of the scheme and called for its abolition by the Prime Minister.

The government’s response was as follows:

“Thank you for your e petition about the Intra Company Transfer scheme and non-EEA workers in the IT industry.

In November 2008, the work permit arrangements were replaced by Tier 2 of the Points-Based System. Tier 2 ensures that those who benefit most directly from migration, such as employers, play their part in ensuring the system is not abused. To employ an overseas worker an employer must be licensed by the UK Border Agency to act as a sponsor. Tier 2, like the work permit arrangements it replaces, is demand-led and not based on numerical targets or quotas. Overseas workers are granted permission to fill a specific skilled vacancy for a specific period of time.

Unless certain exemptions apply, employers must advertise their vacancies to UK workers, and demonstrate that they cannot fill the post with a suitably qualified or skilled settled worker, before they can sponsor a migrant under Tier 2. One exception is if the job is a recognised shortage occupation. The independent Migration Advisory Committee recently recommended that certain posts within visual effects and 2D/3D computer animation for film, television or video games should be added to the shortage occupation list. There are no other IT occupations on the list. Another exception is the intra-company transfer (ICT) route, which is designed to enable employees of multinational companies to transfer to skilled posts in this country and to enhance the UK’s competitiveness in attracting inward investment by overseas companies.

Currently, an ICT post requires that the migrant has had a minimum of six months previous experience working for the sponsor and will fill a genuine vacancy in the UK for an established employee that cannot be filled with a suitably qualified or skilled settled worker.

However, on 7 September 2009, following advice from the Migration Advisory Committee, the Home Secretary announced a number of changes to the ICT rules in Tier 2 of the Points Based System. From the spring of 2010 companies will only be able to transfer staff through the ICT route where they employed the individual for at least 12 months, doubling the existing 6 month threshold and the route will no longer lead to permanent residence in the UK. An additional route will be created to allow graduates on global graduate programmes to transfer to the UK for a period of no more than 12 months where they have three months experience of working for the company.

The off-shoring of IT work is not an immigration issue. The immigration arrangements do not prevent employers from outsourcing work to another company or bringing migrant workers into the UK for either short or lengthy periods of time, provided the relevant criteria are met. These are business decisions for employers to determine. Fair access to migrant labour can help to encourage large multinational firms to invest in the UK. In such cases, access to migrant labour encourages growth in the industry to accommodate both UK and migrant workers. UK workers also benefit from working with the most highly skilled workers from around the world and sharing expertise.

We do not allow migrant workers to be used as a source of cheap labour and undercut UK workers. Employers must pay salaries at that are least equal to those paid to resident workers with similar skills, as specified in the UK Border Agency’s guidance for sponsors. Sponsors must confirm the salaries and allowances of all migrants that they sponsor. This is checked when the migrant makes a Tier 2 application and verified through later compliance checks. If the company does not pay the stated salary, they risk losing their sponsor licence.

Migrant workers benefit from international tax agreements in the same way that UK workers benefit when employed overseas. Further information is available on the Directgov website.

We support employers who ensure their workers are accommodated whilst in the UK, but we have set an upper limit of 30 per cent of the gross salary package for this type of allowance. This limits the amount of tax relief they are entitled to, as well as ensuring that the workers are paid an appropriate rate for the skilled job they are employed to do in the UK.”

‘Intra Company Transfer’ work permits have received much negative press of late owing to their reputation for displacing skilled workers, including IT contractors. The government is being advised on this issue by the Migration Advisory Committee (MAC)  but is choosing to take a tougher stance than the MAC is recommending. They have advised that all that is required is for the existing rules to be more stringently enforced. However, the government have over-ridden this advice and decided to ban the use of ICT to replace a UK worker.

Managing Director of the Professional Contractors Group (PCG), John Brazier commented in a press release: “The government is to be congratulated on taking a tougher line on the ICTs than the MAC recommendations, exactly what PCG has been calling for. This new measure seems to send a clear signal to those abusing the system: replacing highly skilled contractors with ICT workers will no longer be tolerated.”

He continued: “However, the new rules are still too vague and we will be seeking clarification from the government on their exact implications. It must be totally clear that firms cannot work round the system and seek loopholes.”

MAC has advised the government that they should lengthen the time an ICT migrant has worked for the company, from 6 months to 12 months, prior to being able to work in the UK.

As it stands, ICTs are the simplest work permits to acquire as there is no requirement on the company to prove that the position could be filled by a worker in the UK. Companies can, and often do, transfer in thousands of workers at a time. Currently 65% of ICT permits are for the IT sector.

Speaking about the MAC report, John Brazier said: “These additional changes, though welcome, simply do not go far enough. It is certainly true that the government needs to take a harder line on enforcement, and we strongly urge that they do so, but we wanted to see the MAC come up with more specific measure to protect the UK’s freelance workforce.”

He concluded, “Freelancers are key to the UK’s future economic recovery, and we will continue to campaign hard for more stringent ICT rules.”