When two worlds collide

As of 6 November, contract lawyers are going to need to start speaking to their immigration advisers more regularly than they may like.

The vast majority of people at the beginning of the month will have spent the day talking about fireworks and the lingering scent of bonfires on their winter jackets.Immigration lawyers had more technical interests: new visa policies for overseas investors, genuineness tests for migrant workers and the 90 pages of changes to secondary legislation were the order of the day.

Hidden within that statement of changes was a seemingly innocuous provision about migrants working on client contracts. The rules now enable officials to refuse visas if a sponsored worker will fill a routine role for a client, as opposed to providing a service on behalf of their sponsor.

This is not entirely new. In fact, Home Office guidance already dictated that a sponsored worker could only be contracted to work on a time-bound project and, even then, the employer had to retain responsibility for their output.

In practice this meant that while a US or Indian contractor could be assigned to a client to build an IT system or manage a major project, he could not simply work for a client as an agency worker.

Nevertheless, the new provisions are significant and will have a number of implications for both immigration and contract lawyers.

The Home Office does not introduce such technical laws unless it intends to enforce them and suspects existing abuse. Going forward, immigration lawyers should expect officials to ask to see contracts before applications will be approved. That probably won’t mean every applicant, but it will happen, and the IT sector should be prepared.  

We know this will be bad news for our clients, not because they are non-compliant, but because of the impact these new provisions will have on their business and workforce. To begin with, requests for information always delay the entry of business critical staff. 

A business does not go to the expense of sending an employee to another continent unless they are essential. These delays will frustrate employers and slow down revenue generating projects.

Second, businesses will be nervous when officials request sight of contracts. These are highly sensitive contract documents that set out how a company works, what they deliver and what they charge. They are not the type of documents that businesses want divulged to third parties.

Right now, businesses tend to be relaxed when a Home Office auditor asks to see a contract in person at an audit. That will certainly change when they are told to send it halfway around the world to a nameless and faceless official.

It is more of a game changer for contract lawyers working with overseas consultancy firms. The definition of a compliant contract may be well established but the new rules bring it in to sharp focus. 

It is essential that this is taken seriously. If a sponsored worker is assigned to a non-compliant contract, the Home Office can take away the employer’s sponsor licence and all of their sponsored non-EU workers. For a small company that could mean losing the one employee who can deliver a crucial contract. For a large consultancy company the impact could be disastrous.

The first step will be to understand the law. Both parties to a contract will need to understand that sponsored workers will only be available where a service is being provided. They will need to push back if seconding a sponsored worker would be non-compliant. It may mean changing the deal or finding someone else.

The second step is to draft the arrangement in a way that will be clear to a ‘non-legal’ Home Office official. Any vagaries and anything that suggests non-compliance will be seized on. Misunderstandings can be argued out – Home Office officials are good to work with and will listen – but those arguments take time and cause disruption.

Following the new law may not be rocket science but it is important. Immigration and contract law have rarely interacted in the past but the crossover is now inevitable. SJ