Tension between immigration and discrimination laws in graduate recruitment

The resident labour market test has long gone, but the impact of its disappearance is affecting graduate recruitment. We’ll take a look at that with help from two immigration specialists.

A reminder. The resident labour market test was designed by the Home Office as a protectionist measure to ensure settled workers in the UK had the opportunity to apply for positions before they were offered to migrants. Brexit happened on the last day of 2020 and, as a result, the test was abolished from 1 January 2021 meaning recruitment was possible from anywhere in the world without the need to default to the resident labour market. So, overnight, a new, boundless, indiscriminate freedom for recruiters. However, what has become apparent in the last three-years-plus is that that freedom has brought a number of operational challenges for businesses, not least in the recruitment of graduates. So, the net has widened, but it has come at a cost.

So, let’s hear more about that from two of the lawyers in our immigration team, Shara Pledger from the Manchester office and Alex Orr from Glasgow who both joined me by video-link to discuss the issue. I started by asking Shara about that fundamental rule change:
Shara Pledger: “What we have is a big change to the way that the Home Office has really approached sponsorship, but then a much-delayed effect. So, Brexit is really something that people have almost got bored of talking about. Obviously, it took effect a long time ago now and the rules were changed at that time to coincide with that. So, it was actually at the end of 2020 that we saw a lot of these rules change. Where this has started to impact for a lot of employers, however, is at the time that those rules were changed, in 2020, it wasn't necessarily a period of a lot of recruitment. We were obviously at that point in the midst of the pandemic and there wasn't very much movement internationally and, obviously, from a graduate point of view, we were at the very end of that year. So, the cohort that had already graduated in the summer of 2020 were not affected by any of these changes. So, fast forward now, when we're in summer of 2023, and all of a sudden we have all of these issues that are starting to come to the surface, but the roots are back in the end of 2020, it's just that it's taken this long for them to rear their head.”

Joe Glavina: “Alex if I can come to you. As I understand it, that delayed effect has brought about a tension between immigration and discrimination law. Why is that?”

Alex Orr: “Yes, so on the one hand, we have the immigration rules which are inherently discriminatory - so that's both in the sense of process, administrative burden, but also, significantly for employers, in the sense of costs and we've got this increased cost of sponsoring skilled workers within those immigration rules. Then on the other hand, we have UK equality legislation and that prevents employers from discriminating against applicants, or employees, based on their nationality. We used to have the resident labour market test and what that did was required employers to prioritise UK nationals, but we don't have any more. So, the problem that employers are having is that they now need an objective justification for any discriminatory practices that prioritise UK nationals over migrants and it's very rare in case law for cost alone to be sufficient.”

Joe Glavina: “So, why is that an issue for graduate recruiters Alex?”

Alex Orr: “So, the reason this is an issue for graduate recruiters is that often in graduate recruitment the role will be a two-year role. So you'll have students and graduates - or often international students are applying - and they'll be on a student or a graduate visa which has work restrictions. So, for example, you may be a graduate on a graduate visa which has a two-year restriction and after that you would require sponsorship to remain in the role. You might already be one year into that when you make the application so the difficulty for employers is they take on this graduate and after one year their right to work expires and they're left in this situation where they're either losing the talent from their talent pool after one year, which defeats the purpose of their graduate programme or, on the other hand, they are having to potentially spend quite significant costs to sponsor that graduate and keep them in the business.”

Joe Glavina: “Shara if I can come to you. I see the problem, so what are the options for employers?

Shara Pledger: “There are lots of different ways that businesses can still look to recruit. The issue that most of them have when they are looking at sponsorship as an option is that they are, perhaps, in specialist areas, or in particular sectors, where recruitment is still very difficult. Post-Brexit, obviously, there is a smaller pool of people who are available for employment without the need for formal sponsorship and, at the moment, it's great that organisations are looking at different ways of recruiting people and different streams for talent. So things like recruiting students, and recruiting graduates, can be really, really good ways to get to know people, to understand what their capabilities are, and to work out how that might fit in with an organisation, but a lot of those routes are just sort of kicking sponsorship further down the road. It is something that organisations will need to engage with at a point. So, really for businesses it’s trying to work out what the balance is in terms of do they want to try and sort of shut off some of those streams and then they're not focusing on some of those routes that perhaps would be looking at expiring within a couple of years’ time, but also there are implications of doing that which are related to discrimination and employment law.”

Joe Glavina: “Finally, Shara, what’s the advice? What should employers be doing about this?” 

Shara Pledger: “Right now, organisations are in a, sometimes, tricky position with their current cohort of graduate recruitment and a lot of that now it can be - it's a slightly probably overblown phrase but almost damage limitation. It's working out well, okay, what are the implications of the people that we already have within the business, and what will we need to do in order to retain them? What we would like to do, and the conversation that we want to start is for organisations to begin thinking now, okay, well what position are we going to be in in a year's time? How can we change the way that we look at recruitment? How can we make different plans? What do we need to put into our budgets so in 12 months’ time we know what's coming and we're in a better position to be able to deal with that, and that’s really what all of these conversations are about. It’s about trying to make sure that people are able not just able to deal with the issues that are in front of them and on their desk today, but about that future planning because, obviously, we hope the economy will continue to grow, and we hope the graduate recruitment will continue to grow, but it needs a much more nuanced approach that we saw pre-Brexit and this is now, really, the time for organisations to start thinking about that.”

Another issue that the immigration team have been flagging with clients in the post-Brexit world we’re now in, is the ability to bring interns to the UK on a short-term basis. Of course, before Brexit that was very easy to do under the free movement rules, but post-Brexit it is still possible through the relatively cheap and easy Government Authorised Exchange, or Temporary Worker Visa. Immigration specialist Alex Wright talked to this programme about that in some detail in ‘Government Authorised Exchange useful to bring emerging talent to the UK’ and we’ve put a link to it in the transcript of this programme.

LINKS
Link to HRNews programme: ‘Government Authorised Exchange useful to bring emerging talent to the UK’