Trichotomy of Immigration, Corporate and Employment Law

UK immigration law

The key focus is to govern the entry, stay and rights of foreign nationals in the United Kingdom. It aims to set out the rules and regulations in relation to visas, working permissions, asylum, citizenship, and deportation. The primary legislation regulating immigration in the UK is the Immigration Act 1971, supplemented by subsequent amendments and regulations. The Home Office and its agencies such as UK Visas and Immigration are responsible for the administration of immigration law and processing applications.

 

Corporate law

This area of law deals with the formation, operation and governance of companies and entities. It encompasses a wide range of legal matters in relation to business organisations, including company formation, corporate governance, shareholder rights, mergers and acquisitions, corporate finance, and insolvency. In the UK the Companies Act 2006 is the primary legislation governing corporate law providing a comprehensive framework for company formation, management, and regulation.

 

Employment law

Employment law aims to ensure fair and equitable treatment of workers and protection of their rights within the workplace. This governs the relationship between employers and employees, setting out their respective rights and obligations. It covers various aspects of employment, including retirement, contracts, wages, working hours, health and safety, discrimination, termination, and employee rights. The key legislation includes the Employment Rights Act 1996, the Equality Act 2010 and the Health and Safety Act 1974.

1.      Recruitment & Workforce Composition

Immigration law dictates who can legally work in the UK and under what conditions. Employers must comply with the immigration requirments and restrictions when hiring foreign nationals, ensuring that employees have the necessary permission to work. Failure to comply with immigration requirements can result in penalties and legal consequences for the employer. Therefore, immigration law directly influences the composition and diversity of a company’s workforce. Immigration law may impact the ability of foreign nationals to work in the UK, and employment law sets out the rights and protections afforded to both UK and foreign workers, prohibiting discrimination based on protected characteristics including nationality and immigrations status. This can create tensions for employers who need to balance the need for a diverse workforce with compliance obligations ensuring fair treatment of all employees.

 

2.      Sponsorship and Compliance

UK immigration law has an established sponsorship system that allows employers to hire skilled foreign workers. To become a license sponsor, a company must meet certain criteria and comply with ongoing obligations, such as record-keeping, reporting and monitoring the immigration status of sponsored employees. Corporate entities must navigate these sponsor requirments to recruit and retain international talent. This can create a compliance burden as compliance obligations can be complex, time consuming adding administrative burdens and costs for employers. Balancing immigration compliance with efficient HR practices and operational needs can be challenging, especially for Start-ups or those companies trying to establish a presence in the UK.

 

3.      Business Transfers and Mergers

Corporate transactions involving the transfer or acquisition of businesses, often overlook the fact that immigration law can have implications for the entities as well as the employees involved. For example, when a company undergoes a merger or acquisition, sponsored employees may need to transfer their sponsorship to the new entity. Specific rules and procedures exist to facilitate the transfer of sponsorship to ensure compliance with immigration rules as well as employment law, the rules for a TUPE transfer (Transfer of Undertakings (Protection of Employment) requires careful planning. Strategic planning with between immigration, employment and corporate lawyers is vital however many will be guilty of overlooking this component of corporate transactions at an early stage of the process.

 

4.      Right to Work checks

Employers have a legal duty to carry out right to work checks on all employees to verify their eligibility to work in the UK. This includes conducting right to work checks. Failing to conduct proper right to work checks can lead to penalties and sanctions for employers. The immigration rules set out the requirements and procedures for these checks, placing obligations on corporate entities to ensure compliance.

 

5.      Brexit Implications

UK’s departure from the European Union has had a significant impact on immigration law and consequently affected corporate and employment law. EU citizens right to live and work in the UK have changed and new immigration rules have been implemented. Companies have had to adapt their recruitment and retention strategies to comply with the new immigration requirments for EU and non-EU workers. This has also meant additional costs impacting the ‘bottom line’ for many businesses at a time where many are struggling to keep afloat due to financial pressures.  

 

The above points demonstrate why it is important for corporate entities and their HR departments to remain up to date up to date on changes in immigration / employment law to ensure compliance and to mitigate legal risks so that they can effectively manage their workforce.

The UK is in need of workers from abroad, adult social care vacancies are up by 52% at its highest rate on record with over 165,000 unfilled posts.  The construction sector is also facing talent recruitment challenges with over 21,000 advertised roles recorded in December 2022. The hospitality sector paints a similar picture with job 146,00 job vacancies according to Office of National Statistics data. The UK tech sector is number one in Europe and three in the world according to a report by Tech Nation and Dealroom, however challenges in relation to the industry skills shortage are noting easing and attracting a new generation of tech talent is critical to the UK’s tech growth.

The Chancellor identified the UK’s digital economy as one of the UK’s five growth sectors in autumn of 2022 UK, we often come across headlines that the UK wants to attract the best, yet we continue to see immigration policies that undermine this position. It appears there is a lack of internal communication within the government corridors and the relevant department may find it helpful to understand the trichotomy of immigration, corporate and employment law to ensure the UK can attract corporate investment as well as talented individuals both vital for economic growth.

Seeking legal advice from professionals well versed in immigration, employment and corporate law is often recommended to navigate the current complexities and to ensure compliance with current applicable regulations.

Evidentially whilst immigration, employment and corporate law are distinct areas of law they are also interconnected, often overlapping in practice. At Boyes Turner our Immigration, Corporate and Employment teams work diligently together to ensure compliance and to mitigate risks for corporate entities as well as their current and future talent.

Please contact our Immigration team if you would like to discuss how we can help your business.