Immigration Fees Increase – what can employers do to recover these fees?

The 4th October saw a significant increase in immigration fees payable. Work and visit visa fees went up by 15%, family visas, settlement and citizenship by 20%, and student visas by 35%.

With this increase, which was clearly vastly in excess of inflation, more employers are likely to want to consider using what are often termed, ‘claw back’ agreements to enable them to recover the fees incurred in connection with an application in the event that the employee leaves their employment in the months that follow.

Such agreements are possible in order to seek to recover the  Immigration Health Surcharge and the Visa fee but they cannot extend to the Immigration Skills Charge, and it is also not best practice to include the Certificate of Sponsorship (COS) either.

There is little case law around the use of such agreements by employers in this context. In theory it is possible for the employee to seek to argue that a repayment obligation is either a penalty or a restraint of trade, rendering the obligation unenforceable and invalid. More typically used to date are training agreements which require the repayment of training fees where an employee leaves,  provided the fees to be recovered are proportionate to the loss suffered by the employer. Therefore, it is useful to draw from what we do know about the use of these agreements when preparing ‘claw back’ style agreements in relation to immigration fees incurred by the employer.

With this in mind, the best way to mitigate against an argument that a repayment clause is unenforceable is to carefully tailor the obligation so that it is proportionate. This could include:

• Incorporating a ‘sunset’ provision, so that the obligation to repay the fees extinguishes after a particular period of time. We would advise that the obligation to repay is for no longer than two years.
• ‘Tapering’ the obligation, so that the amount of the fees that needs to be repaid incrementally decreases over time. The Immigration Health Surcharge will be reimbursed on a pro rata basis in any event.
• Excluding some elements of the immigration fees (as referred to above not all of the fees incurred can be recovered in this way). Further, it may be considered unreasonable to include the professional fees that were incurred in applying for the visa, as this is usually a commercial agreement between the employer and its professional advisers.
• Excluding certain reasons for termination, such as redundancy or where the employer is in fundamental breach of contract and the employee resigns as a result.

Finally, employers should also be mindful of the risk of an indirect race discrimination claim being brought in respect of a repayment obligation. This would be on the basis that the repayment requirement is likely to have a worse impact on non-British nationals. Indirect discrimination can, however, potentially be justified if there is a good reason for it. As far as we know, the specific point has not yet been tested in the tribunals, but employers should be prepared to explain why the repayment clause is both necessary and proportionate. It’s also arguable that a lengthy repayment provision indirectly discriminates against women, older or disabled employees, because these groups may be less likely to be able to remain in stable employment and so may have shorter lengths of service. In addition, employers should aim to avoid imposing repayment obligations on certain sponsored employees but not others, as this raises risks of direct discrimination between different groups. Consequently, it is best to establish what your policy will be as an employer and apply this consistently to ensure fairness  and equality.

For details of the current immigration fees click HERE.

Please get in touch if you have any questions regarding the issues discussed in this article.

E: help@jma-hrlegal.co.uk / T: +44 (0)1252 821792