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With the technology sector still facing substantial talent shortages, tech employers are relying heavily on the Tier 2 sponsorship regime.
Tech City UK reported last year that 7% of jobs in the UK’s digital tech sector were filled by non-EEA (European Economic Area) nationals. In this context, and with Brexit just around the corner, it is even more important that Tier 2 sponsors safeguard their sponsor licences to ensure their continuing ability to sponsor non-EEA nationals.
In many cases, employers must advertise roles in compliance with Home Office guidelines and must be satisfied that there are no settled workers – including British and EEA nationals – who are suitable for the post before they can sponsor a non-EEA national. This is known as the Resident Labour Market Test (RLMT).
A recent High Court decision has sounded alarm bells for sponsors by emphasising the importance of taking the RLMT seriously. The case makes it clear that sponsors must consider all applications received against the requirements set out in the adverts, and shortlist for interview all applicants who meet the requirements in the role.
It is not sufficient to shortlist only the best candidates in circumstances where other candidates also meet all the requirements for the role.
In the High Court case, GP surgery Exmoor Surgery had employed Ms Palanisamy on a part-time basis as a business development manager. It subsequently wanted to employ her and sponsor her under Tier 2 (General) in a similar full-time role.
Exmoor Surgery advertised for the role in accordance with the Tier 2 sponsor guidance and received 42 applications. Five applicants were invited to attend an interview. Three of the five shortlisted candidates failed to attend. After interviewing the two remaining candidates, the surgery offered the position to Ms Palanisamy and sponsored her under Tier 2.
Soon after this, Exmoor Surgery notified UK Visas and Immigration (UKVI) of a change of sponsor circumstances, namely a change in its partnership. This triggered an application for a new sponsor licence because of the change in control. The surgery submitted its application for a new sponsor licence and, following a visit from UKVI, the application was refused.
UKVI gave several reasons for refusing the sponsor licence application, including:
- When considering who to shortlist for interview, the surgery had only shortlisted the best five candidates for interview. It did not consider all the applicants to assess whether any other applicant was suitable for the position. In other words, it had not considered whether any other applicants met all the criteria set out in the adverts.
- UKVI felt the requirement for the successful candidate to have an MBA (Master of Business Administration) was exaggerated in order to be difficult for a settled worker to meet.
- UKVI also queried the job code (SOC) chosen for the role and sought to argue that the role fell below the minimum skill level for Tier 2.
The surgery sought to challenge UKVI’s refusal of a sponsor licence on the grounds that it was an irrational decision.
The High Court judge found that the job code used by the surgery was correct and, helpfully, also found that the requirement for an MBA was not exaggerated, holding that it was for the surgery to determine whether it considered the qualification necessary.
However, the judge upheld UKVI’s decision that the surgery had not demonstrated a genuine attempt to recruit from the resident labour market. Before offering Ms Palanisamy the role, the surgery should have considered the remaining applicants and whether there were any settled workers among them who were potentially suitable for the post, with the requisite skills and experience.
The judgment serves as a useful reminder that the effect of the RLMT is that a settled worker who is suitable for an advertised post should be recruited in preference to a non-settled candidate, even if the latter is the better candidate.
This meant that the application for judicial review was dismissed and the decision not to grant the licence stood.
Safeguarding your Tier 2 licence
This case acts as a reminder to ensure that care is taken when conducting the RLMT. There are a number of practical actions employers can take to ensure they minimise any risk to their sponsor licence:
- Ensure that the adverts posted are compliant for Home Office purposes – there are certain details that must be included, including the location of the job, salary, job title, duties, skills, qualifications and experience and closing date (which must be at least 28 days after posting the adverts).
- Retain copies of the adverts in accordance with the Home Office guidance.
- Ensure that only the skills, experience and qualifications genuinely needed for the role are included in the advert and that all key requirements for the role are set out.
- Assess every applicant against the skills, qualifications and experience set out in the advert and keep a record of why applicants were not shortlisted for interview, with an explanation of which of the requirements set out in the advert were not met.
- Shortlist all applicants who appear to meet the requirements in the advert and keep copies of the interview notes.
- Be aware that any change in the employer’s circumstances (such as a change in the immediate parent company) may trigger the need to apply for a new sponsor licence.
As indicated by the decision in this case, the implications of carrying out the RLMT incorrectly can be extremely serious – the worst-case scenario being the loss of a company’s sponsor licence. In a sector that needs to recruit non-EEA nationals, this could be catastrophic or, at the very least, a further challenge to the growth and development of the business.
By putting in place simple procedures to carry out a compliant RLMT, a business can help to protect its sponsor licence and its ongoing ability to recruit key talent.