Member Article

British businesses have long relied on temporary labour from the European Union to service short or medium-term projects. From an immigration perspective, prior to Brexit this relationship used to be frictionless. There was no red tape and no need to worry about what was or was not permitted under the UK’s immigration rules and policies. People arrived, people worked, people left and businesses were happy.

With borders and workplaces now opening back up, businesses and foreign workers are confronted with the realities of the end of free movement. The first instinct is to immediately turn to the sponsor licence system for solutions. But solutions are not always there to be found. The sponsor licence system is fine for businesses that wish to employ foreign staff to work with them on a long-term basis. In situations where a business needs workers for a finite number of weeks or months rather than years, the sponsor licence system becomes unwieldy. Costs are high, procedures are convoluted, eligible roles are restricted, and workers must pass an approved English language test in reading, writing, speaking, and listening.

For some businesses, rather than investing in a sponsor licence, the solution may in fact lie in the UK’s visit visa rules. This is somewhat surprising, given that the first and second rules of visit visa club are “no work permitted”.

The old rule

The visit visa rules span five different appendices plus a 76-page policy document. For years, buried deep in one of those appendices which lists permitted activities for visitors, was a seldom-used rule called PA7:

“An employee of a foreign manufacturer or supplier may install, dismantle, repair, service or advise on equipment, computer software or hardware, where the manufacturer or supplier has a contract of purchase or supply or lease with a UK company or organisation.”

This obscure rule permits an employee of a foreign manufacturer or supplier of goods to come to the UK as a visitor with a standard visit visa in order to work to fulfil a contract of purchase or supply or lease. The way the rule is drafted however only works where there is a two-party relationship. What if specialist labour for installation is supplied by a third-party? Shepherd and Wedderburn highlighted this ambiguity to Home Office policy directors earlier this year as part of an information session hosted for business clients.

The new rule

From 6 October 2021, rule PA7 is being amended. It will now read:

“An employee of an overseas company may install, dismantle, repair, service or advise on machinery, equipment, computer software or hardware (or train UK based workers to provide these services) where there is a contract of purchase, supply or lease with a UK company or organisation and either: 

(a) the overseas company is the manufacturer or supplier; or 
(b) the overseas company is part of a contractual arrangement for after sales services agreed at the time of the sale or lease, including in a warranty or other service contract incidental to the sale or lease.”

The addition of part (b) expressly opens up the possibility of tripartite contracts where one foreign company manufactures or supplies the goods or equipment, and a separate foreign company provides the specialist labour to install it. To take advantage of this, the third-party foreign company must specifically be written in to the contract for after-sales service agreed at the time of sale.

Example

A German company manufactures warehouses. A Greek company specialises in the installation of those warehouses. A UK company purchases a warehouse from the German company and agrees at the time of purchase that the Greek company will install it. Now, employees of both the Greek company and the German company may enter the UK as visitors for up to six months to carry out the installation work, or subsequent repair/servicing, and then leave the UK when the work is complete.

This simple change may open up several possibilities for companies looking to ameliorate the effects of Brexit. Crucially for UK companies, it potentially allows projects to be undertaken and completed by foreign companies without the need for the UK company to act as a sponsor or to directly employ the workers.

This clarification comes in to force on 6 October 2021. As this is new rule, there will likely be new guidance issued by the Home Office on its interpretation in due course. In the meantime, I recommend seeking professional advice on a case-by-case basis before placing reliance on this rule.

For more information, please contact John Vassiliou, Senior Associate in our immigration team, at [email protected], or your usual Shepherd and Wedderburn contact.