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Mind the gap

Employment law issues seem to be rife with gaps at the moment. We have already reported on the gender pay gap, brought to the fore by the UK’s new reporting regulations for gender pay that took effect on April 6, 2017. However, it looks like we are now dealing with another gap: the skills gap that commentators believe will be one of the consequences of the UK exiting the EU. In fact, we are already seeing the effects, as potential migrant workers are reluctant to come to the UK at a time of such uncertainty. As a result, there is a significant shortage of workers to fill such typical blue collar jobs as drivers, electrician assistants and construction workers. Sectors such as healthcare, retail and construction are among those feeling the squeeze, as they are heavily reliant on EU migrant workers. A study by the Recruitment and Employment Confederation (REC) points out that EU migrants are over-represented in low-skilled jobs, filling 15 percent of them, compared with 7 percent by non-EU migrants and 78 per cent by Britons.

Furthermore, Brexit has led to curbed planned growth and investments for one in four small and medium-sized enterprises (SMEs), according to the latest “UK SME Confidence Index” from Vistage. And the shortage of workers has forced employers to raise starting salaries. According to the REC study, in August salaries increased at the fastest pace in nearly two years. This trend may not be sustainable over the long haul if it impacts too negatively on profitability and business sustainability.

In the meantime, automation and digitalization have been proposed as possible solutions to bridge the gap. However, whether replacement of people with machines is quite what voters intended back in June 2016 when the referendum took place is questionable at best.

 

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Mind the gap

Crunching the numbers for Tier 2 workers

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The recent case of Maria Tukhas and secretary of state for the Home Office has given sponsoring employers in the UK further guidance about how to calculate an employee’s annual salary in granting points under Tier 2. Click here for the decision.

As clarified in this case, a migrant worker applying for leave to remain must score points in order for a Certificate of Sponsorship to be assigned to them. Points are awarded for a prospective salary.

In this case, the Home Office awarded Ms. Tukhas 30 out of the required 50 points. She was awarded zero points in respect of the “appropriate salary” category. The Home Office argued that the minimum acceptable rate of pay for a 39-hour working week for Ms. Tukhas’ prospective employment was £22,600 a year, yet her Certificate of Sponsorship stated that her salary would be £22,600 a year for a 40-hour week. This equated to £22,035 a year for a 39-hour week, so she did not meet the necessary threshold.

Paragraph 79 of Appendix A of the Immigration Rules states that: “The points to be awarded for appropriate salary will be based on the applicant’s gross annual salary to be paid by the sponsor.”

Ms. Tukhas appealed against the Home Office’s decision. It was held that, other than cases in which an applicant has contracted weekly hours or is paid an hourly rate, the correct salary under the Immigration Rules is an applicant’s gross salary paid by the sponsoring employer (subject to the conditions set out in paragraph 79(i) to (iii), which were not relevant in this case).

There was nothing to suggest that Ms. Tukhas was contracted to work weekly hours or paid an hourly rate. As such, the correct salary was £22,600. No further pro-rating was necessary; Ms. Tukhas, therefore, did meet the necessary salary requirement.

Surely any simplification of this process, such as this case offers, will always be welcome news to employers with employees operating under a Tier 2 visa―as well as to the migrants themselves.

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Crunching the numbers for Tier 2 workers