In August 2009, the UK Border Agency announced further changes to the points-based immigration system that was introduced in late 2008. These changes, introduced after months of lobbying, go beyond the scope of the almost weekly changes and 'fixes' that employers and immigration lawyers have been getting used to.

What are the key changes that are likely to impact on City employers and what is the likely affect on City recruitment?

Key changesKey changes that 'tighten' the immigration rules include the following: Key changes that 'relax' the immigration rules include the following:

  • The anomaly that saw City employers having to advertise very senior roles (ie director, chief executive and legal partner roles) with Jobcentre Plus in the first instance has now been ended, provided the annual salary package is £130,000 or more;
  • There is no longer a requirement for a Migrant’s salary to be paid in the UK;
  • A temporary reduction in a Migrant’s salary and/or working hours to avoid redundancies no longer requires a change of employment action, if certain conditions are met;
  • Increases in salary will not necessitate a change of employment action if due to annual increments, bonuses or natural progression within the same job (provided progression is at the same level, ie not a promotion).

  • Employees from outside the EEA and Switzerland (Migrants) must not, as a result of an intra company transfer (ICT), directly replace a 'settled worker'; the definition of 'settled worker' is very broad. Multinational companies often use the ICT immigration category to allow colleagues from overseas to work for a UK group company;
  • It has been clarified that where a Migrant’s core duties and/or responsibilities change (e.g. through promotion) and they continue to work for the same sponsor, a new Certificate of Sponsorship will need to be issued by the employer and fresh leave to remain in the UK will need to be obtained by the employee before the new job is commenced (this is known as a 'change of employment action').

What is the likely affect on City recruitment?City employers are likely to see a decline in the number of ICT transfers that are approved by the UK Border Agency. Indeed, the migration advisory committee expects to see a fall of nearly 20,000 in the number of Migrants who take up UK roles in 2009 under tier 2 of the immigration system (this tier includes ICT transfers). Many City employers will be forced to find alternative ways of hiring Migrants (e.g. hiring migrants who qualify under the 'highly skilled worker' category) or, where this is not possible, accept defeat.

Even though we have seen a slight relaxing of the rules 'around the edges', many City employers will still view the immigration rules as 'uncommercial', inflexible and too restrictive, as they seek to attract and retain talented employees from around the world.

Edward Wanambwa is a partner at CM Murray LLP