Work permit rule to protect IT contractors

Employers will no longer be able to import staff into Britain from their overseas offices on intra-company transfers where they will be replacing settled UK IT workers.

Welcoming the new rule, which is tougher than what was recommended, the Professional Contractors Group said it signalled ministers now regarded the displacement of UK IT contractors as unacceptable.

The group, which represents UK freelancers, said it plans to evidence "numerous" accounts of such contract staff being displaced to officials at the UK Borders Agency.

Already UK contractors have lost out to non-EU workers through employers using intra company transfer (ICT) permits, the PCG told the Migration Advisory Committee (MAC).

Rather than just allowing staff with company-specific knowledge to be temporarily transferred, as intended, employers have used the permits solely to cut their labour costs.

Typically, workers are brought into the UK en masse from the employer's overseas division, such as in India, where pay rates and expectations are both significantly lower.

For example, Tata Consultancy Services brought across 3000 workers in the last year alone via intra-company transfers, 65 per cent of which go to the IT sector, the PCG said.

The group believes it is unfair that employers are not required to advertise the roles, which they want their transferees to fill, to the UK labour market, unlike non-ICT work permits.

While the MAC said there were abuses, it recommended no tightening of the rules to limit the use of ICTs, saying the answer was stronger enforcement of the current rules.

"However the government has decided to go one step further than this," the PCG said, "and now forbids the use of ICT permits where they will be directly replacing a settled UK worker."

The group said the government was originally due to issue their response on the issue alongside the MAC's report, published yesterday, but brought it forward in a recent update.

Under Tier2 of the points-based immigration system, the Borders Agency inserted the "additional requirement" that a migrant employed via an ICT "must not be directly replacing a settled worker."

John Brazier, PCG's managing director, reflected: "The government is to be congratulated on taking a tougher line on the ICTs than the MAC recommendations".

"This new measure seems to send a clear signal to those abusing the system: replacing highly skilled contractors with ICT workers will no longer be tolerated."

The committee, whose recommendations are normally adopted by the Home Office, did suggest changes should be made to the way ICT migrants are paid.

More crucially for UK contractors fearing displacement, the MAC said ICT workers must be with their employer for a minimum of 12 months, up from six months at present, and that ICTs "should not lead to a right to permanent residence" in the UK.

The transparency of how ICTs are enforced should also be looked at, the committee added, and the potential for beefing up resources to allow that enforcement explored.

"These additional changes, though welcome, simply do not go far enough," Mr Brazier said. "It is certainly true that the government needs to take a harder line on enforcement, and we strongly urge they do so, but we wanted to see the MAC come up with more specific measures to protect the UK's freelance workforce.

"Freelancers are key to the UK's future economic recovery, and we will continue to campaign hard for more stringent ICT rules."

Freelance computer worker Sean Key, who is petitioning Number 10 to scrap ICTs, has said of the system: "It is unfair on UK workers, as these 'shipped-in' workers enjoy tax (and often accommodation) benefits not available to workers living in the UK due to the local cost of living and tax regime.

"This is raising UK unemployment by the tens of thousands and undermining the UK's future competitiveness in information technology".
 

Editor's note: Further reading:  Intra-Company Transfers & Work Permit updates