The Legal 500

Against a background of tightening immigration controls, the Home Office has implemented policies to reduce the options for overseas nationals wishing to extend their stay within the UK.

On 1 October 2004 the Home Office imposed new rules restricting the ability of non-EEA nationals to switch from one immigration category to another while in the UK. The rules particularly affect employers wishing to recruit overseas nationals who need a work permit or are considering whether to obtain permission to stay here as highly skilled migrants.

In addition, on 7 February 2005, the Home Office amended the rules relating to working holidaymakers for the second time in less than a year, taking away the generous changes relating to ability to work and switch immigration status to work permit employment introduced less than six months earlier.

The two sets of changes were purportedly designed to challenge the exploitation of the managed migration system and to clearly define procedures for switching regulations for genuine applicants lawfully residing in the UK.

In practice, the changes have increased the number of refusal decisions, have caused more confusion (particularly for applicants) and have substantially increased the costs and delays for those overseas nationals trying to obtain permission to remain in the UK. The changes were implemented without consultation and have been enforced without reference to commercial need or practical considerations.

In particular, the Home Office has failed to impress on either individual applicants or businesses employing them that approval of work permit employment does not mean that the individual worker will be allowed to work in the UK.

Work permit employment and switching provisions
Obtaining a work permit
The process of obtaining permission to stay in the UK as a work permit holder is essentially in two discrete stages. In the first stage, the prospective employer (not the overseas national) makes an application to the Home Office in Sheffield for permission to employ a named individual in a specified position at a specified salary.

The Home Office will consider the impact on the local labour market, the qualifications and experience of the individual, the qualifications and skills needed for the role and the terms and conditions of the employment. If the Home Office is satisfied that the application meets the relevant criteria then it will issue a work permit. The Home Office does not, at this stage, consider the immigration status or history of the prospective worker.

However, the work permit on its own is not sufficient to allow the overseas worker to commence employment within the UK. The second stage requires the overseas worker to make a separate application to the Home Office for permission to 'switch' immigration status and to remain in the UK to undertake the work permit employment. (Please see below with regard to overseas nationals who already have the status of work permit holder.)

The fact that a work permit has been issued is in no way an indication that the second stage of the application process will be approved. Many employers and workers have been tripped up at this second stage of the process because they were unaware that a completely separate set of criteria are used to assess the merits of the application.

Switching categories
Historically, the rules for switching were much broader. Non-EEA nationals in the UK in temporary immigration categories, such as working holidaymakers and students, could, as long as they met the criteria, easily switch to long-term employment categories that could lead to settlement in the UK and eventually a British passport.

These temporary-stay individuals obtained permission to enter the UK in categories requiring a commitment to leave the UK at the end of their agreed period of stay, but once in the UK could lawfully apply to switch to a long-term category such as work permit holder or highly skilled migrant.

It came as no surprise that, as a result of this, high quantities of applications from temporary migrants were received. In keeping with the current trend towards increasing restrictions on immigration and removing any discretion, the Home Office tightened its rules to make it tougher for individuals to switch.

Although individuals in these temporary categories may still qualify to switch to permanent employment, the new procedures make the criteria more stringent.

Take, for example, the ability to switch from student to work permit holder while in the UK. Before 1 October the Home Office had allowed students to change their status to work permit holder.

If, at the time the work permit was issued, the student had an earlier first degree or satisfactory work experience then this would be sufficient evidence both for the issue of the work permit and for the endorsement of the student's passport as a work permit holder.

Under the new provisions, as before, the work permit will be issued if the student has previous satisfactory work experience or an earlier degree. If neither of these is available, it is still usually possible to obtain a work permit if evidence of likely graduation is provided.

However, it is not possible for the student to complete the second stage of the process to switch from the immigration status of student to work permit holder unless and until they can provide original evidence of graduation from their current degree level course in the UK - either in the form of a letter or original degree certificate.

This has left many students in limbo this summer - they are unable to extend their immigration status as students now their courses have finished, but are unable to obtain work permit status until final results are issued, often not until near the end of the year.

Although the majority of students do have the ability to work part-time during term time and full-time during vacations, they are not permitted to take permanent full-time positions. They are, therefore, unable to commence the intended work-permit employment until final results are available and their passports finally endorsed. (Some employers have avoided this issue by offering temporary posts to students until exam results are finally available then moving them to permanent employment once the passport has been endorsed.)

Ironically, if the student leaves the UK and obtains the work permit and then a visa overseas (instead of switching while in the UK) evidence of graduation is not normally required. This summer, many employers have been sending UK-based students overseas to obtain visas before bringing them back to commence work permit employment. However, this can be costly as visas can only be obtained in the overseas national's home country - this is usually the country of nationality unless they have a residence permit for a third country.

Since the end result is identical, this hurdle seems to be wholly artificial and simply a hindrance to business. (From the Home Office point of view, the visa fee is around £250 less than the fee to switch while in the UK, so this actually represents a loss of revenue.)

It is therefore important for overseas nationals - and potential employers - to identify their current immigration status before submitting an application for a work permit. This will not have any affect on the work permit application itself, but will determine whether, once the work permit has been issued, they will be able to switch immigration status while in the UK or whether they will need to obtain a visa overseas.

The correct approach must be determined before submitting the work permit application as the approval format for the work permit is different if a visa is to be obtained rather than making a switch while in the UK.

Consequences
As a result of the changes, only the following individuals may qualify to switch into work permit employment without leaving the UK:

• a student who has successfully graduated at a UK higher or further education institute;
• a post-graduate doctor, dentist, or trainee general practitioner;
• a student nurse;
• a working holidaymaker, subject to certain conditions (see below);
• a participant on the Science and Engineering Graduate Scheme; or
• a highly skilled migrant or an innovator.

This is an exhaustive list. The Home Office has stated that although it does have some discretion to allow others not on the list to switch while in the UK, this will only be allowed in the most exceptional circumstances and business needs will not be considered relevant.

In practice, the Home Office has only allowed switching where there are particular reasons why an individual would not be able to travel overseas to obtain a visa - for example due to ill health or late-stage pregnancy.

This procedure has disallowed a great deal of previously allowed applications and this has resulted in greater expense and inconvenience for many businesses. A recent example arose in relation to an employer who had transferred to the UK a husband and wife - both senior employees of the company.

The employer obtained a work permit for the husband but the wife obtained a visa to come to the UK as the spouse of a work permit holder rather than a work permit holder in her own right. This gave her permission to live in the UK and to work for the company without the need to obtain a work permit in her own right.

Following structural changes, the husband was made redundant in the UK and reassigned to a position overseas. The wife wanted to remain in the UK and to continue working for the company. Unfortunately, because 'spouse of work permit holder' is not one of the categories permitted to change to work permit employment in the UK, the company had to send the wife overseas to Australia (her home country) to apply for a work permit and then a visa before she could return to the UK to continue the same employment.

The cost to the company, as well as the disruption to its business, was substantial. It was particularly frustrating in view of the fact that it would previously have been possible to achieve the end result (the wife having a work permit in her own right) in the UK and without any disruption to business.

Existing work permit holders
It is worthwhile to consider the position of existing work permit holders at this stage. Because existing work permit holders are not 'switching' immigration status they are unaffected by the restrictions on switching. Nevertheless, it is still essential that on any change of employment (either within the same company or to a new employer) the passport is re-endorsed with permission to stay in the UK as a work permit holder in relation to the new employment approval.

Exceptionally, the Home Office does allow an existing work permit holder to commence the new employment once the first stage of the process has been completed and a work permit issued. However, it is essential that the worker then submits the passport to the Home Office for endorsement in line with the new approval as soon as possible.

Improvements
The good news on procedural changes for work permit applicants is that with effect from 1 April this year the Home Office has reopened the public enquiry counter in Croydon to receive applications for passport endorsement on a same-day basis.

Before this, the second stage of the work permit process - the individual's application to have their passport stamped with permission to stay in the UK to accept the work permit employment - could only be made by post to the Home Office in Sheffield. Delays last summer were substantial, with some applications taking as long as four months to be completed. During this time the worker was not allowed to commence the new employment and could not travel overseas.

Processing delays have abated somewhat since those dark days, and at present two to four weeks is usually sufficient to complete the process. However, the fast-track system gives a facility for processing applications on a same-day basis - either though appointed representatives or the overseas national applying in person. The application fee increases from the standard postal rate of £335 to £500, but in view of the speed of the service, the opportunity to commence employment earlier and no disruption to overseas travel this is a preferable route for many employers and their prospective employees.

Working holidaymakers
Employers who regularly employ working holidaymakers may be forgiven for feeling bewildered by recent changes to the scheme. The restrictive approach of only allowing working holiday makers to work part-time for two years or full-time for one year with prohibitions on pursuing a career or engaging in business was overturned in August 2003 when, after extensive consultation, the Home Office accepted that the UK labour market could make better use of the pool of labour available through this scheme.

The changes introduced at that time meant that working holidaymakers were free to accept any job in the UK, work for the full two-year duration of the visa and to switch to work permit employment once they had been in the UK for at least 12 months.

However, without consultation or prior notice, in February this year the Home Office swept away those generous changes to virtually reinstate the previous position. The current rules allow working holidaymakers to come to the UK for up to two years, but to work for only one year during that period (whether the work is full-time or part-time). These restrictions apply only to working holidaymakers who were granted their visas to come to the UK after the announced changes.

In addition, working holidaymakers may now only switch to the work permit scheme while in the UK if they have been in the UK for at least 12 months and the post is classified by the Home Office as a 'shortage occupation' (a restrictive list largely comprising of medical roles). This restriction affects all working holidaymakers regardless of the date of issue of the visa.

Employers should therefore check the date of issue and wording of any working holidaymaker's visa to establish for how long they will be allowed to work for the company - one year only for post-change working holidaymakers or for the full remainder of the working holiday visa for all others.

Julia Jackson is an associate solicitor at Magrath & Co specialising in immigration and nationality law. She is a member of the Executive Committee of the Immigration Law Practitioners Association and a member of its Employment and Business Sub-Committee.

Lisa Monaghan-O'Connor is a paralegal specialising in business and commercial immigration.

For more information please visit www.magrath.co.uk.