Immigration Cap: The future for restaurants

Posted on In Focus Mar 2011 - by Tandoori Magazine
Immigration Cap: The future for restaurants

The immigration cap will have a drastic impact on ethnic restaurants. Solicitor Maria Fernandes looks at what restaurant owners can expect.

Despite the fact that restaurants have faced challenging times in the last two years, many have braved the difficulties and have survived the worst. Many businesses, having obtained licences, put off bringing staff in until the worst was over. Many assumed that they had certificates available and could utilise these when the time was right.

There are now signs that there are moves by many employers to expand or develop areas of their business. Many who deleted emails because there were too many template style dictates have only just realised that the certificates that they were allocated, but did not use, are no more.

Initially with the introduction of the interim limits by the government, a set of rules was introduced whereby employers had to follow a procedure to request certificates. They were told that there would be a priority system in which extensions would be the first priority, followed by shortages. Most requests by restaurants since then have been turned down from month to month. There is no reason given for this and so it is hard to work out what the future will hold.

Before the current sponsor licensing system came into force, the process provided for reasons to be given for the refusal. This enabled the applicant to understand why they were being refused. In a democracy, it is expected that where a public body refuses to accede to something there is requirement by law to give reasons for the decision. Imagine a situation in which a judge turns a case down but does not say why. There would be an uproar. Yet in this scenario applications are being turned down with no explanation whatsoever.

There is currently a case in the High Court waiting to be heard, and one of the issues that it will be considering is the unfairness of the current regime. However, even if it is successful it may be too late as by then the new permanent measures will come into force.
An application under the Freedom of Information Act was made to ascertain how certificates are allocated and how many are allotted every month. Surprisingly, it appears that there is no set number of certificates allocated for each month. There is therefore no particular reason why applications should be turned down for positions, particularly within the shortage area.

Recently, without much notice, the interim rules were amended again. This time it was announced that priority will be given to applicants both in the shortage and non-shortage positions on the basis of salary, starting with those earning over £40,000. Shortage positions will now have to earn a minimum of £20,000. The current indications are that these requirements will be adopted when the permanent cap comes into place.

Those in the hospitality trade know very well that, generally speaking, salaries are not high in this profession although the level of skill is. Most high street restaurants are unlikely to be able to offer such salaries, and so the future of the ethnic restaurant trade, which is reliant on skilled migrant labour, is about to come to an end. The fine dining restaurants will obviously survive because they will be able to pass on the additional costs to the customer. The rest will have to rely on local staff who simply do not have the skills necessary, as a restaurateur once put, to put the taste into the food.

The Migration Advisory Committee has recently issued its report. It was asked to consider if economic migration from outside the EU could be capped to meet the government's target of reducing net immigration to the level of the 1990s. It was also asked to assess the impact of Tier 1 and 2 on public services.

It concluded that Tier 1 and 2 migrants make a significant contribution to the UK and are valued. Although it concludes that there is no evidence that migrant workers have a negative impact on public services because the workers are usually young and healthy, or that foreign workers displace local workers, in order to meet it targets to reduce migration there will need to be a reduction of around 25% (around 6,300 to 12,300). It considers that employers will need to upskill or train staff. However, there will need to be a drastic reduction in other areas to meet its targets, family settlements, students, families and working holidays.

The CBI and other organisations have been vocal on the effect of these changes on international business, and these companies have already secured concessions for themselves. The restaurant lobby, however, has been very slow on the uptake.

Many assume that the any restrictions are temporary only and will be resolved. The indications are that by the time restaurants realise the effect of the changes it will be too late.

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