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
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."
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.
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
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
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
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
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
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
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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