Mishcon Academy: Digital Sessions podcast - Immigration and Brexit

Posted on 11 May 2020

Podcast: Digital Sessions Podcast - Immigration and Brexit

Natalie Loader and Stephen Bostock

In this episode: what impact will Brexit have on the UK's immigration regime.  How will this impact businesses in the UK and how should businesses engage with these issues now to be Brexit ready and well placed to protect themselves against the risks Brexit poses to their labour forces and business continuity.

Hello and welcome to the Mishcon Academy Digital Sessions Podcast.  I am Natalie Loader an associate in the Immigration department at Mishcon de Reya and I am joined by my colleague Stephen Bostock a Partner and Head of the Corporate Immigration team at Mishcon.  During the Covid-19 pandemic we are observing social distancing rules and we are recording this podcast over the internet with each of us speaking from our own homes.

Stephen, thank you for joining me today.  Everyone is talking about Covid-19 and the impact the virus is having on businesses now as well as the legacy it will leave on business operations in the future.  Covid-19 has rightly consumed the current dialogue but to the extent that it is now rare to hear or even think about Brexit and the impact Brexit will have on businesses in the UK.  Brexit is still happening and so Covid-19 issues aside momentarily what changes can we expect on an immigration front on 1 January 2021 when the Brexit transitional period has come to an end assuming that is that the Government doesn't ask for an extension. 

Thank you for that Natalie and it's good to be joining you on this podcast.  I think I would just like to start by saying  the views and opinions that we are going to express during this podcast could change so this is as we see things at the moment but obviously with Brexit it seems to be an ever changing landscape.  One thing we do know, we will try and advise on clear facts as much as possible during this is that the UK has until the end of next month to ask for an extension to the transitional period.  So just to clarify, because Brexit has become quite confusing over the last few years, we have now left the European Union and we are in a transitional period which, at the moment, will stay in force until the end of the year – so, if nothing changes, we will come out of the transitional period on 31st December and from the 1st of January next year it's a whole new interesting world in terms of immigration law.  The other fact we do know is that during the last few months the Home Office have released a policy statement document which indicates a new immigration system will be becoming live in the UK from January next year and it contains a few interesting details, not a huge amount of detail, we are expecting more to come over the following months but it does have some interesting indications of what we can likely expect from January next year.  One of these that I think is particularly interesting is that the Home Office are looking to bring back a previous visa that was called the post study worker visa and what this will enable is a graduate route for people who have finished studies in the UK from the Summer of 2021 and will allow them to work in the UK at any skill level for a period up to two years without the need for sponsorship.  So this is a visa that use to exist, I think it was abolished about 5 or 6 years ago, we use to process a lot of these on behalf of clients and one of the great benefits is it offers a huge amount of flexibility for people who have studied here and want to continue living and working in the UK for a couple of years after their studies finish to decide what it is they want to do long term and if the UK is a country they want to continue working in long term.

Secondly there is also going to be very significant changes to the Tier 2 visa category which for anyone who doesn't know is the work permit system so this is where sponsors are able to effectively sponsor an applicant worker to work for a business in the UK over a number of years and it is a direct route to indefinite leave to remain status and obtaining British citizenship.  We will go into a lot more detail on that later on during the podcast.  The other hugely significant change that will obviously be happening from January next year is that EU nationals will essentially be treated the same as people currently are from the outside of the European Union and the European Economic area.  The European nationals have until the end of this year to arrive in the UK to benefit from the current rules in place and then actually from June next year, is an absolute hard deadline for them to apply under the EU Settlement Scheme and if they don’t then businesses will need to start thinking about hiring them the same way they would hire workers under the Tier 2 system. 

So how do companies go about making sure they are ready to hire EU nationals under the new immigration system?

So this might come as a bit of a surprise to many businesses.  So we have a long history at Mishcon of working with companies to obtain what is called a Tier 2 Sponsor Licence and this would enable the business to sponsor Tier 2 workers in the UK.  Obviously, European nationals haven't been included in that so far so there are a very many number of companies in the UK who don't have the Tier 2 Sponsor Licence and will absolutely need one in place by next year so they can actually look to hire Tier 2 workers who are European and beyond Europe from next year.  The process is relatively straight forward but it can be difficult to get so we certainly would recommend using lawyers where possible.  It takes usually I would say from start to finish maybe anywhere between about 4 to 12 weeks to apply for the Tier 2 Sponsor License, the Home Office will sometimes come to the company so they can carry out an audit to make sure that the company's internal HR files and processes are Home Office compliant.  They will also want to make sure that the company has effective systems in place to monitor workers.  There is various supporting documents the company will also need to submit in support of the application which can be quite onerous and difficult to get to the standard the Home Office will expect to see before they issue the licence.  Once a licence is in place, the Home Office essentially put the duties and responsibilities onto the Tier 2 sponsor to then look to employ Tier 2 workers in the UK.

And once the licence is in place, what does it mean for the employee to be sponsored under the Tier 2, can they work in any role for the company or are there restrictions in place?

So this will be one of the very interesting developments I think for many businesses in the UK and again this goes right to the heart of the Brexit debate about free movement but there will be a huge change in the ability of companies to employ overseas nationals from Europe because the Tier 2 visa category is not designed for anyone to be able to be offered a sponsored position.  In fact, the threshold at the moment is actually quite high.  It is at RQF level 6 which is, for anyone who doesn't know the regulated qualifications framework which is essentially at degree level to be able to get a job at the moment under the Tier 2 visa regime.  This is changing from next year so the Home Office are reducing it to a lower threshold which is RQF level 3 which is essentially the equivalent of A levels so the job in question will need to be, to a certain extent, skilled for someone to be able to be sponsored under this route.  There is also minimum salary requirements, at the moment it is £30,000 approximately this is dropping from next January we think to about £25,600 although possibly if you earn less than that there might still be scope for you to be hired if under this new system a concept of trading points is introduced which means, for example, that your salary could drop to as low as £20,480 if you have other points the Home Office think make up for the shortfall in the minimum salary requirement. 

So that sounds like good news because it seems to mean that the system is trying to become more flexible in order to prevent a skills shortage in the UK but while it seems the system is being expanded so that more roles can be sponsored under Tier 2, and that is inevitably going to be very good news for some businesses, it does seem that no provision is being made for lower skilled workers and this will severely impact business which may previously have relied upon workers from the EU.  I understand that the Migration Advisory Committee which is an independent body that advises the Government on immigration policy changes has estimated that since 2004, 70% of EU nationals who arrived in the UK to work would not be eligible for a visa under the proposed new immigration system.  Stephen what do you envisage will happen in relation to these types of lower skilled roles?

Again, I think that's a good question and again it goes right to the heart of I believe the Brexit debate and a large focus of that was on low skilled immigration so the Government are incredibly ______ [9.17] to this being an issue and what they don't want is to end free movement with Europe and then open up other low skilled visa categories that would essentially lead, they think, to the same issues and concerns that were raised during the Brexit referendum debate.  You will probably have seen from the press, they are incredibly cautious, very careful to make sure that any new system actually makes it very difficult for low skilled labour to come into the UK going forward and I think this is absolutely one of their red lines in any future negotiations on trade deals and certainly an end of free movement has been a red line for the Government in their Brexit negotiations.  And interestingly you know, just to get some insight to their thinking on this and the policy statement that was released earlier this year, I think a very interesting quote that came out was as follows in that "the UK wants to shift the focus over our economy away from reliance on cheap labour from Europe and instead concentrate on investment in technology and automation ".  With that quote in itself  I think encapsulates their thoughts on immigration going forward which is the UK does not want to be seen as open for low skilled migration and they are going to do everything they can to stop that from happening from next year.  That's the politics of it, the reality is a little bit different.  Say for example and certainly during the Covid crisis we have seen there is huge shortages in low skilled workers coming to the UK and actually picking fruit crops and other sorts of agricultural products.  The Government recognises that is one very important pinch point and they have actually introduced a concession for agricultural workers so they have said from next year even though the politics is saying no low skilled labour they have actually carved out a system for agricultural workers and I think why that is interesting is they have actually given some ground there so they have established a precedent and we are certainly expecting other low skilled areas.  I don't like using the word low skilled for some of these jobs but it’s a term the Government use and it could be expanded to include other industry sectors and certainly if anyone is worried there is going to be a shortage of low skilled workers in their particular industry or sector, now is the time to make their voices heard because the Government have shown some flexibility in this. 

That's very interesting.  Just before we wrap up, can you provide any tips on what businesses should be doing now to be Brexit ready and indicate how Mishcon de Reya can assist?

Yes, absolutely and I think there are three key things to think about and three ways in which we can help.  Firstly, and as I eluded to earlier, businesses now should absolutely be thinking of applying for and obtaining a Tier 2 Sponsor Licence if they haven't got one already.  I think that is a fairly obvious practical thing that just needs to happen before next year because it seems highly likely they are going to need this a) to hire Tier 2 workers from beyond Europe from next year as is currently the case.  If there is a shortage of European nationals coming to the UK to fulfil some of these positions but secondly, and I think more importantly, is to hire European nationals it seems like from next year that the Tier 2 licence will need to be in place.  I think also just one important practical point on that people might be thinking well that's a great idea but is the Home Office currently open for business, how are things working and they absolutely are and so the Tier 2 sponsor team are still processing applications a lot of it has been moved to online automated submissions but at Mishcon we are still very much open for business and doing a huge amount of this work at the moment so this is still going on even during the lockdown.  I think another second important consideration is for businesses to think about their current EU population workforce.  So we have given a lot of advice since 2016 on how EU nationals can actually obtain either British Citizenship, permanent residence or apply for status under the EU settlement scheme and I understand a huge number of European nationals have done this over the last few years.  There is still a large proportion that haven't and at the moment for example a company could employ a European national who hasn't had to go through any of these formal processes.  That's all changing so there is an absolute need by next year with June 2021 as an absolute final deadline for European nationals to apply under the EU settlement scheme.  We can assist with these applications and the critical importance of this is that if they go through that process which they must do to actually have a right to work in the UK and if they haven't gone through that and this new system comes in and none of the deadlines move, then from July next year employers could find they have got a huge number of European nationals working for them without permission which as I am sure you will appreciate that becomes a huge issue and can open up civil and criminal liability so it is vitally important that companies recognise who their European workers are and actually help them take appropriate steps to get status in the UK to enable them to work here lawfully.

Just as I mentioned before and certainly on the low skilled workers side now could be a good opportunity if you think from next year that you won't be able to take advantage of Europeans working for your business because the position might be lower than RQF level 3 then now would be a good time to actually make your voices heard and maybe think about lobbying the Government to relax some of the low skilled worker restrictions from your sector.

Q: So it sounds like there is a lot that companies can be doing now to make sure they are ready for 1st January 2021 and it's really reassuring to hear that licence applications can still be made despite the lockdown so this could be a good opportunity really for businesses to use this time to make their licence applications since after the lockdown they will be focused on regaining normality post Covid-19.

Well lets wrap up for now.  I would like to thank Stephen Bostock for joining me in this Mishcon Academy Digital Sessions Podcast.  I am Natalie Loader and in the next episode my colleagues Lydia Kellett and Andrew Wolfin will be talking about how start-ups and early stage tech companies are handling this strange time.

The digital sessions are a new series of online events, videos and podcasts all available at Mishcon.com and if you have any questions you would like answered or suggestions that you would like us to cover do let us know at coronavirus@mishcon.com.  Until next time, take care.

Mishcon Academy: Digital Sessions are a series of online events, videos and podcasts looking at the biggest issues faced by businesses and individuals today.

Join Partner Steven Bostock and Associate Natalie Loader discuss the impact Brexit will have on the UK's immigration regime.

This Mishcon Academy: Digital Session podcast covers how this will affect businesses in the UK and how businesses should be engaging with these issues now so they are well placed against the risks Brexit poses to their labour force and business continuity.

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