Do sponsored workers have job security?

Guest post by Claire Hollins - Senior Employment Law Associate Solicitor at Kuits Solicitors

Latitude Law has a long-standing and reciprocal relationship with Kuits Solicitors in Manchester.  With over 180 members of staff across different departments including Employment Law, Commercial Law and Family Law, we know that we can confidently recommend their services to our clients who are seeking legal advice outside our realm of expertise within immigration. Kuits Solicitors equally know they can endorse our professional expertise when their corporate or private clients are in need of UK in-bound immigration advice.

Sponsored workers who have a time limited right to work in the UK can invariably be concerned about their job security. Whilst employers have strict obligations to prevent illegal working by carrying out right to work checks and ensuring that their employees have the appropriate permissions to remain and work in the UK, sponsored workers are covered by the usual employment law rights that apply to non-sponsored employees.

In particular:

• sponsored workers who have completed two years’ continuous service have the right not to be unfairly dismissed; and
• employers must not treat migrant workers less favourably than non-migrant workers on the basis of their nationality or immigration status. Doing so is likely to constitute race discrimination and there is no minimum service requirement to bring a discrimination claim.

Where a sponsored worker’s visa expires or is due to expire, their ability to remain in the UK and continue to work will in most cases depend on their employer agreeing to support an application for an extension to stay by issuing a further certificate of sponsorship to them. Whilst there is nothing in the immigration rules that compels an employer to offer further certificates of sponsorship, where an employee wishes to stay, if the employer does not issue that further certificate, they may have unfairly dismissed the employee and/or discriminated against them if the employer is unable to justify the reasons for failing to continue the sponsorship or has failed to follow a fair process when dismissed them. Successful claims for unfair dismissal attract compensation of up to £105,707 or 12 months’ gross pay (whichever is the lower) plus a basic award which is calculated in the same way as a statutory redundancy payment. Successful claims for discrimination attract unlimited compensation.

Where there is a redundancy situation in the employer’s business, it would likely be discriminatory to treat sponsored workers differently to others because they are sponsored. However, when considering suitable alternative roles for sponsored workers where they are at risk of redundancy, the employer would need to consider if the change in role involved a change in the applicable standard occupational classification and therefore a new certificate of sponsorship is required. If so, the sponsored worker would need to submit a new application for leave to remain and would be unable to start the new role until their application had been approved.

In circumstances where an employer is certain that the sponsored worker no longer has the right to work in the UK then immediate termination of their employment will usually be the appropriate course of action to avoid sanctions for illegally employing them. However, mistakes can be made by officials dealing with the employee's immigration status and it is not unheard of for the employee's status to be rectified, meaning that the employer's understanding that they no longer had the right to work is mistaken. If there is any doubt or ambiguity as to the employee's status, the safer approach is for an employer to go through a fair investigation process, giving the employee the opportunity to demonstrate that they have the right to work before making any decisions about their employment.

Can employers clawback fees paid in respect of sponsored workers?

Employers who wish to employ sponsored workers can face significant upfront costs which make many reluctant to do so. However as employers continue to struggle with labour shortages and skills gaps, they are increasingly doing so and looking for ways to protect their investment in sponsored workers.

One of way for employers to protect their investment is to require sponsored workers to agree to repay the immigration fees they have incurred if their employment terminates. This is similar to the approach many employers take in relation to the clawback of training fees.

Where an employer wishes to enter into such an agreement, it is important that the terms are brought to the employee’s attention prior to their employment commencing. Employers should clearly set out what fees may be repayable and the terms that will apply.

Employers are not permitted to recover the Immigration Skills Charge from sponsored workers. If they do, they risk their sponsor licence being revoked. Consideration should also be given to whether repayment obligations will be waived in specific circumstances such as if the employee is made redundant, dies or has to leave their employment due to permanent ill-health.

To avoid allegations that the repayment obligation is unenforceable as a penalty clause or a restraint of trade (on the basis it makes it difficult for the employee to change employer), employers should consider applying a fixed period for repayment rather than this being an indefinite obligation and also reducing the level of fees requiring repayment over time.

Typically these types of provision will be included in the employment contract along with a right to deduct the costs from the employee’s final salary payment. If a separate agreement or side-letter is entered into, this should be signed by both parties to evidence the agreement reached.

When deciding on repayment obligations, employers also need to be mindful of the risk of indirect race discrimination claims on the basis that the repayment obligation will have a disproportionate impact on non-UK nationals. Indirect discrimination can be justified, and it will be important for employers to be able to explain their rationale for the repayment provisions to show both that there is a legitimate reason for doing so and that the repayment provisions are proportionate.

If you require advice about the employment aspects of employing sponsored workers or employment law more generally, please contact Claire Hollins on 0161 912 6148 or clairehollins@kuits.com.