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Immigration Oil and Gas and Subsea Industry

Immigration Oil and Gas and Subsea Industry

The news has been littered with stories of difficult business decisions being made by oil and gas and subsea companies within a tough economic climate. With so much seismic activity taking place within the sector, Human Resource (HR) managers are reminded of some important immigration considerations that may assist their business and will help them comply with immigration laws.

Lower oil prices and reduced production is having a significant impact on the UK and global sector. The United States (US) Energy Information Administration’s (EIA) predicts that US production levels are expected to continue to fall through early 2016 before the trend reverses and production starts to rise.

In the UK, Premier Oil, a UK oil group with large scale global operations, recently announced a fall in revenue of 34 per cent to USD $580 million from the start of 2015 to June. According to the FT online, the company’s North Sea oil production experienced a sharp fall of 21 per cent to 16,800 barrels and a 7 per cent fall to 60,300 barrels per day in total global production across all fields due to gas export issues.

Major offshore firm, Technip, announced in early July that it will be reducing jobs by 6,000 globally as part of its plans to reduce its costs by £600 million, as reported by leading Aberdeen journal, EnergyVoice. It is not clear how many of its 1,000 employees in the North Sea will be affected.

In addition, Bibby Offshore and Subsea 7 have made large cuts to its staffing levels. Companies, including many of our clients, are placing several of their exploration projects on hold or alternatively are increasing their capital expenditure in order to push ahead with some projects. Such activity within companies can see HR managers implementing large scale redundancies and reducing staffing responsibilities’ in cost cutting exercises.

During this time, immigration considerations can often be put aside as recruitment of overseas staff slows. However, HR managers are reminded that the impact of immigration and compliance can go much further than recruitment.

Deploying staff to other locations overseas and in the UK

Overseas staff transfers can be a useful tool in moving highly skilled workers to plants and offices overseas whilst retaining their skills within the company.

Under the Tier 2 intra-company route, companies can transfer overseas staff from outside of the European Union (EU) without being subject to the Home Office’s cap on skilled migrants, a cap that recently led to a large number of refusals of restricted certificate of sponsorship under the Tier 2 (General) route.

In addition, sponsored staff under this route are exempt from the UK Government’s Immigration Heath Surcharge introduced in April 2015, thereby saving further costs to the business of securing non-EU staff.

Similar intra-company immigration routes are available in overseas locations, providing that the company has been incorporated locally and has a licence to sponsor foreign workers. Once in place, securing a work permit for foreign staff in overseas locations can be a relatively straightforward process.
More of our clients are assessing how current staff can be better deployed to fill skills gaps on overseas projects and find this options to be beneficial.

Where the company does not have a branch or office overseas, but foresees transferring staff to that location, the company should start the incorporation process as early as possible so as to avoid possible delays to the project. Alternatively, the receiving client company may be prepared to sponsor the staff member during the project but HR managers should be aware of the possible payroll and compliance issues that will need to be raised. DavidsonMorris can advise on how to overcome this.

Where the company is seeking to deploy a Tier 2 sponsored employee to a different office or site within the UK but in the same role, HR managers may need to update the Home Office via the Sponsor Management System (SMS) within 10 working days.

Changes to the Business

It is not uncommon for companies within the oil and gas sector to merge or experience changes to its’ structure. Where there is a significant change to the business, such as a merger or takeover and the company employs overseas, non-EU staff under Tier 2, HR managers will need to report the change to the Home Office. According to the Home Office’s Tier 2 and 5 Points Based System Guidance for Sponsorship of April 2015, such changes must be reported to the Home Office within 20 working days of the change.

If the company, in such circumstances, accepts overseas staff whose employment is being transferred under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), HR managers will need to inform the business of its sponsorship obligations. Where a business does not have a UK sponsor licence to sponsor overseas staff, they will need to make a sponsor licence application to secure one, something which DavidsonMorris can assist with.

We have found that the earlier clients discuss the merger or takeover with us, the easier it is for us to resolve the possible impact the companies’ immigration compliance obligations as the immigration requirements are often less than straightforward.

Change of Conditions and Redundancies

As part of the restructuring, companies may seek to offer employees amended terms and conditions or even a new role, allowing the business to retain key staff at reduced cost to the business. Nevertheless, HR managers will need to be aware of any possible compliance issues that this may have on Tier 2 sponsored employees.

Tier 2 staff that are offered a new role within the business which falls within the same (SOC) code as quoted in the Certificate of Sponsorship do not need to make a new visa application to the Home Office, subject the salary requirements being met. A new application may need to be made where the Tier 2 staff’s role fell under the Shortage Occupation List and they are moving outside of the SOC code to a role that no longer falls within that list.

Further, a change of salary from the level detailed in the Certificate of Sponsorship, other than incremental annual increases or bonuses will need to be reported to the Home Office. Again, HR managers must ensure that the salary meets the minimum Home Office salary requirements.

In matters concerning redundancies or termination of a Tier 2 sponsored employee’s employment contract, HR manager must update SMS within 10 working days of the change where the employee’s departure is earlier than the end date stated on the Certificate of Sponsorship. HR managers will also need to provide details of the Tier 2 employee’s new sponsor if they have one.

Different overseas locations will have similar reporting and compliance issues – speak to DavidsonMorris to find out more.

Conclusion

Lower oil prices and reduced production is having a significant impact on the UK and global oil and gas and subsea sector. This is leading to companies, including our clients, to assess and make far reaching strategic decisions that impact upon its employees. Transferring UK staff overseas and foreign staff to other locations can help companies to fill skills gaps in key projects and retain staff.

Immigration visa options will need to be assessed. However, within the UK and elsewhere, compliance with immigration laws will be crucial where there is a change to the company’s structure or non EU employee’s terms and conditions.

Contact DavidsonsonMorris on 020 7494 0118 or at info@davidsonmorris.com at the earliest to discuss your needs and ensure your immigration compliance.

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