21 February 2020

The UK’s very own “Australian-styled” points based immigration system

Many Aussies in London (including one of the authors of this article) have been scratching their heads whenever they hear the term “Australian-styled” immigration system in the UK media. This term has repeatedly been used by Prime Minster Boris Johnson and others in the context of the UK’s immigration system post Brexit (conjuring up images of Bondi beach and kangaroos during election campaigns). 

Details of this points based system (“PBS”) were finally released by the UK’s Home Office this week and has stimulated considerable debate domestically and internationally. 

In this article, two lawyers (one Australian, one Chinese) in the London office of King & Wood Mallesons examine details of the PBS and what this means for Australian, Chinese and other international businesses operating in, or contemplating expansion to the UK from January 2021 onwards.

Details of the PBS

The “magic number” that a prospective migrant will need to attain is 70, which can be accumulated on the basis of mandatory and non-mandatory attributes.

Mandatory

 English language ability
 10                                                  
 Job offer
 20
 Job is of an appropriate skill level                
 20

Non-mandatory

 Salary (per annum)
 
 - £23,040 - £25,599 
 10                                        
 - £25,600 or more
 20
 Jobs in shortage occupation list
 29
 Possessing a PhD degree
 10
 Possessing a PhD degree in a STEM subject  
 20 

It is envisaged that the most typical combination of points will be on the basis of an English speaking applicant, with a job offer that pays a salary of over £25,600. 

It is worth pointing out that while the UK has for some time, adopted (another) points based system for non-EEA nationals under the Tier 2 (General) visa, there are some key differences between that regime and the new PBS that will be in force from January 2021:

1. Abolishment of the Resident Labour Market Test - The current Tier 2 (General) visa system requires the sponsoring employer to undertake defined periods of advertising in specified media, and for the human resources team of the sponsor to maintain records of the candidates that applied and notes of why they were not offered a job, on the basis that EEA nationals should be given priority if they met the job’s requirements. From 2021, this requirement will be abolished. This is good news, as the long period of advertising that was required often created a significant period of time between a non-EEA applicant receiving a job offer and being actually able to start the job. This often disincentivised UK businesses to hire from outside the EEA especially for more urgent roles. 

2. Caps on number of migrants – the Tier 2 (General) scheme had annual quotas. Historically, these were often under-utilised, but in recent years, especially after the Brexit referendum in 2016, with decreasing interest in the UK labour market from EEA countries, there has been a gradual increase in the number of non-EEA migrants coming to the UK. Therefore, the remaining headroom on these quotas has been decreasing for a number of years. From 2021, under the UK’s new PBS, there will be no quotas – all applicants that attain the magic number of 70 points will, in -principle, be eligible for a visa. This is good news for Australian and Chinese businesses wishing to bring skilled English speaking migrants from their home markets. 

The view from the London office of King & Wood Mallesons

1. While the overall reception domestically in the UK is that the new PBS system is stringent, especially towards “low-skilled” migrants who will, from 2021, no longer have a route into the UK, as far as skilled non-EEA nationals are concerned (such as Australian and Chinese nationals), the new PBS will, in-principle be a somewhat more flexible and manageable system.

2. Ultimately, the level of ease of bringing in skilled migrants into the UK will depend on the specifics relating to the implementation by the Home Office as well as the detailed guidance that will be published in due course. The Home Office has had a somewhat blemished reputation as far as its immigration record is concerned, especially in light of the “hostile environment” policy that was adopted when Theresa May was Home Secretary, and we are yet to see whether in practice, its approach will be positively relaxed in favour of skilled migration under the new PBS system. We expect the implementation details of the PBS to continue to evolve over time. 

3. While skilled non-EEA nationals will likely find it significantly easier to come to the UK, for EEA nationals, there will be a very noticeable increase in paperwork compared to the very favourable freedom of movement that they currently enjoy. Historically, Australian and Chinese businesses with European offices could very easily move employees internally within the group to the UK office to fill ad-hoc vacancies without needing to go through the Tier 2 (General) visa route, which typically takes upwards of 3 months. From 2021, there will not be any material difference between moving an employee from the EEA or from the home markets. This is good news for Australian and Chinese businesses wishing to create deeper flows of skilled talent from their home markets to the UK. In the context of post-acquisition integration specifically, this will have a positive impact on the integration of newly acquired UK businesses into the company’s Australian or Chinese networks.

4. As far as Aussies are concerned, it is important to point out that while the UK has called its new PBS an “Australian styled” points based system, this is very different from the Australian Subclass 189 visa that has been one of the most commonly used routes for skilled migrants wishing to move to Australia – the Australian Subclass 189 visa does not require a sponsor or a job offer; it is a visa that is awarded to an individual possessing the combination of skills that Australia needs. The UK PBS is in practice, a variant of the current Tier 2 (General) regime. 

5. As far as large scale English speaking economies go, the UK’s new PBS continues to sit in between the relatively more liberal systems adopted by Australia and Canada (which permit an individual to migrate as a skilled worker without a job offer / sponsor) and the more stringent and harder to obtain H1-B visa in the USA. 

Authors:

Mike Wang (Partner, PRC) is a Chinese lawyer working in the London office of King & Wood Mallesons. He specialises in advising Chinese SOEs and private enterprises that operate in the UK and advises them on strategic legal and business issues and problems that they may encounter.

Jack Tsang (Of Counsel) is an Australian lawyer working in the London office of King & Wood Mallesons. He is dual qualified in New South Wales, Australia and England & Wales. He specialises in advising Australian and Chinese businesses expanding to or are already in the UK across a range of sectors including technology, fintech, education-tech, healthcare and life sciences. 

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