The use of overseas IT staff was again under scrutiny this week after the Home Office was asked to investigate loopholes in the work permit system following allegations that a major credit services company employed unskilled Indian IT staff to work in the UK.
The Professional Contractors Group has filed a formal complaint with government agency Work Permits (UK), claiming that American Express replaced British IT contractors with untrained Indian staff from Tata Consultancy Services, one of India's largest IT services companies.
Although not unlawful, the practice has caused concern among contractors and trade union officials because of the number of skilled IT professionals struggling to find work in the UK. It will also raise questions about the adequacy of the work permits system, which was designed to protect employment in the UK.
The news came as Work Permits (UK) revealed plans to commission an independent review of the work permit system and consider tightening the requirements for companies to advertise in the UK before hiring overseas staff.
American Express formed a partnership with Tata Consultancy Services more than seven years ago as part of its long-term strategy to reduce IT costs by moving work offshore to India. It now has overseas IT contractors working at a number of sites.
The Professional Contractors Group has asked Work Permits (UK) to investigate what it claims is a loophole in the fast-track intracompany transfer scheme used by Tata to import overseas IT workers into the UK.
The group argued that the work permit scheme should only be used to transfer overseas IT staff when skills are not readily available locally.
The complaint accused Amex and Tata of transferring Indian programmers to work as database administrators when they had little knowledge of the IBM, IMS and DB2 databases used by Amex.
The group alleged that at least one of the contractors failed the technical interview but was still hired and that another was employed without an interview - a departure from normal practice. Amex IT staff were subsequently asked to train them, it claimed.
The PCG said government officials had confirmed that the intracompany transfer scheme, which is reserved for staff with "company-specific skills", should not be used to bring overseas staff to the UK with a view to reproducing IT systems in India for the UK company.
But immigration lawyer James Dunlop said the practice was not illegal, providing Indian service companies show that their employees have specific knowledge of the company.
Amex said it expected all of its offshore software suppliers to comply with work permit regulations. "All suppliers go through a rigorous selection procedure to ensure suitability prior to their engagement."
Tata said, "All Tata staff working with clients in the UK are doing so legally with valid work permits issued by the UK government. Staff have met all the requirements set by Work Permits (UK)."