Applicants applying for entry clearance or leave to remain as a partner on the 5-year route under Appendix FM must be able to meet a financial requirement. The most common way of doing this is through the minimum income requirement – this involves the sponsor of the applicant (or the applicant, or a combination of the two, if applying for leave to remain) evidencing a gross income of £18,600 for the 6 months preceding date of application from certain specified sources, usually their employment.
There are various common issues that people face with meeting the financial requirement through their employment income – these include not having held their job role for six months, not earning above the financial threshold or having experienced a reduction in their gross salary. In light of the wave of recent strike action here in the UK, many applicants have likely faced the latter issue. Under Appendix FM-SE, the income considered is gross pay, which means deductions such as tax and national insurance do not affect your ability to meet the financial requirement. However, when a worker strikes, it is their gross pay that is reduced.
The current guidance does not specifically address strike deductions. It does state that any period of unpaid maternity, paternity, adoption, parental or sick leave in the 12 months prior to the date of application will not be counted towards any period relating to employment, or any period relating to income from employment. So for example 2 weeks’ unpaid parental leave during the 6 months prior to application would be discounted, and a person would need to show the required level of income had been received for 6 months and 2 weeks prior to the date of application. If we apply this method in the context of strike deductions, the period containing these deductions would not be counted.
An alternative approach is the calculation used for non-salaried income, which is normally applicable when a person does not get paid a regular fixed income. This would involve calculating the total gross pay across the 6 months predating application (including any deductions), dividing this total by 6 to get an average monthly figure, then multiplying it by 12 to get an equivalent total annual salary, which is the figure relied on to meet the financial requirement.
It’s easiest to consider a worked example:
|Actual gross monthly pay across 6 months
|Apr: £1,500 (with strike deduction)
|May: £1,402.31 (with strike deduction)
|Jun: £1,402.31 (with strike deduction)
|Total for 6 months:
£8,955.85 divided by 6 = £1,492.64
£1,492.64 x 12 = £17,911.70 (equivalent total annual salary) – not enough to meet the Appendix FM financial requirement.
Without strike deductions, the earnings would have been £1550.41 x 12 = £18,604.92, just above the earnings threshold.
Considering the problems that participation in strike action can bring, it seems appropriate that the Home Office should issue specific guidance relating to strike pay deductions.