Home Office calls time on “cheap labour” – can the hospitality industry survive?

5 March 2020

The writing had already been on the wall. Priti Patel had warned that there would be no “carve outs” for specific sectors which would experience a shock when free movement ended.


Those comments were aimed at various industry groups which had asked for the temporary work visas which had been mooted in the 2018 Immigration White Paper to be part of any new policy. But repeatedly, the mood music coming from No10 and Ms Patel had been clear – don’t lobby us until you have raised wages and provided training and career development opportunities that will attract more local workers. 

Last month, the Home Office confirmed what we had been expecting.

We will not introduce a general low-skilled or temporary work route. We need to shift the focus of our economy away from a reliance on cheap labour from Europe and instead concentrate on investment in technology and automation. Employers will need to adjust…It is important that employers move away from a reliance on the UK’s immigration system as an alternative to investment in staff retention, productivity, and wider investment in technology and automation."

The policy statement also confirms that only actual salary and no allowances would be considered as part of meeting the required salary threshold of £25,600. And by way of reassurance, employers were advised that there were plenty of other available resources to fill these roles, including people on Youth Mobility Scheme visas and dependants of Points Based System workers. Not to mention the 8.48m “economically inactive” British people aged 16-64 who, according to Priti Patel, could join the workforce.

So where does that leave the hospitality industry? Here are some questions:

What hospitality roles will be eligible for sponsored work visas in the new system? 

One of the main “wins” of the proposed new system is the lowering of the skills level for roles that can be sponsored by employers to RQF3.  This essentially covers jobs for which the academic requirement is 2 A-levels or equivalent.  At present very few RQF3 roles which are listed in the Home Office SOC Codes can be sponsored under Tier 2. Here is a list of the occupations in the hospitality sector which the Home Office considers to be at RQF3:

  • Chefs (SOC 5434): Senior and specialist chefs with 5 years’ experience  can already be sponsored under Tier 2 because they fall within the shortage occupation list, but they can’t be employed in fast food or “standard fare” restaurants.
  • Other chefs  (also SOC 5434) where the pay is at least equal to the appropriate salary rates shown on the list and the job requires three or more years’ relevant experience will be able to be sponsored. In contrast to the Shortage Occupation List, the current SOC code does not explain what experience is required or what kind of restaurant the chef can work in.
  • Hotel and accommodation managers and proprietors (SOC 1221): Hotel managers will be eligible for sponsorship under the future system.
  • Restaurant and catering establishment managers and proprietors (SOC 1223): All restaurant managers, including fast food restaurant managers, will in future be able to be sponsored, together with assistant restaurant managers in restaurants with 80 covers or more.
  • Catering and bar managers (SOC 5436): Catering managers, banqueting managers and hotel food and beverage managers will all be eligible for sponsorship.
  • Waiting staff (SOC 9273): Head waiters in establishments with 80 or more covers and sommeliers will be eligible for sponsorship. “Standard” waiters will not.
  • Publicans, licensees or pub managers (SOC 1224) will be eligible for sponsorship.

What we will have to watch out for is how far the Home Office seeks to circumscribe the above roles, for example as they currently do with chefs on the Shortage Occupation List by specifying certain periods of prior work experience.

 

WHAT IS THE POSITION WITH MINIMUM SALARIES?

The policy paper also confirms that only actual salary and no allowances would be considered as part of meeting the required salary threshold of £25,600. The hospitality industry was hoping that tips collected through the “tronc” (a shared pool of service charges) could be counted towards the required minimum level. This looks even more unlikely with an overall move away from allowances.

Successful applicants who wish to be sponsored will need to score 70 points and be paid at least the relevant minimum SOC salary level.  The government will commission the Migration Advisory Committee to report on the jobs which should be in the Shortage Occupation List.  Hopefully that will bring clarity on exactly which roles qualify and the corresponding SOC salary levels.   

 

WHAT DOES THE POLICY PAPER SAY ON PRODUCTIVITY, TECHNOLOGY AND AUTOMATION?

The UK’s low productivity had been frequently linked with the uses of “cheap labour” and the failure of employers to invest in equipment and training. Thankfully, that narrative ended some time ago with clear evidence commissioned by the Migration Advisory Committee that lower skilled EEA migration had had no impact on UK productivity. 

Automation is referred to in the policy statement and it is assumed that the Government is referring to sectors where automation would deal with staffing shortages – food and retail packaging centres, agricultural machinery and so on.

Yet it is difficult to see how automation and technology could assist the restaurant trade. An intrinsic part of a restaurant experience is the interaction with waiting staff and sommeliers, and service is one of the 4 or 5 key metrics for rating a restaurant experience.  This often includes explanations of the dishes, suggestions for suitable accompanying dishes and wines, all of which make the dining experience unique. How do you automate that? Perhaps AI can machine-learn these suggestions and we will all be talking to robots? No thank you.

 

WHAT DOES THE HOSPITALITY INDUSTRY NEED TO DO?

The new Government has an enormous majority. It has also clearly indicated that it wants to respond to the concerns of ordinary voters and not necessarily the calls of business. The Government does not appear to be in listening mode as far as business is concerned. It appears to be asking business to show it that UK employers have done everything possible to encourage locals into sectors which have previously relied on migrant labour and to improve opportunities and conditions in each sector to attract those locals.

This is not going to happen overnight. There needs to be a major shift in education and skills policy away from universities and into high-quality technical and vocational training opportunities to start training the next generation of professionals in the hospitality industry. The T-levels, which will start from September this year, are a good start.

The hospitality industry will need to show willing and demonstrate that it is investing in skills and in developing attractive professional career paths in the industry. Much is being done already. Awards like Young Chef Young Waiter are getting the prominence they deserve and promoting these career paths.  UKHospitality’s Menu for Change policy paper has emphasised the need to boost skills and opportunities for the workforce while asking Government for support in reforming the apprenticeship levy, rolling out T-levels and investing in the Tourism Sector Deal. What is clear is that this is not the time to be asking for a low-skilled carve-out. Sadly, the sector may have to take a lot of pain (and suffer numerous closures) before the Government starts to listen.

 

About the author

Nick Rollason heads our immigration team and advises on all areas of UK immigration and nationality law. He has particular expertise in providing strategic advice to businesses on their global immigration needs. He is regularly consulted by the UK immigration authorities on proposed changes to the UK immigration rules and policy.

 

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