Recruiting from abroad: discrimination risks for employers

Can a company legally opt to hire an equally capable candidate who does not require a sponsored visa over someone who does to save costs? Joanne Hennessy and Jonathan Rennie report

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The UK’s withdrawal from the EU resulted in the country’s points-based immigration system being overhauled. This included the abolition of the resident labour market test (RLMT) for employer-sponsored skilled workers – a tool that restricted businesses from sponsoring an employee for a work visa unless they were able to prove they hadn’t been able to fill the role with a suitable settled worker. The government abolished the RLMT, relying on the costs associated with sponsorship and visas in the UK to discourage employers from hiring migrant workers. This was seen as a win for many who considered the RLMT a barrier to recruitment. 

While the government would ideally want UK companies to continue to prefer settled workers as far as possible, abolishing the RLMT removed a key tool employers could rely upon to legally do so, opening the door to discrimination risks. 

Following the abolishment of the RLMT, one of the queries arising from businesses is: if an employer can easily fill a role with a suitable candidate who doesn’t require a sponsored visa, can they be preferred over an individual equally suitable who would require a sponsored visa to avoid related costs? 

Indeed, recruiting individuals who don’t require sponsored work visas will avoid obvious costs, processing timescales and ongoing compliance duties. However, rejecting a candidate based on their immigration status could be seen as indirect discrimination and companies need to consider whether they can objectively justify choosing a settled worker over an individual from overseas. 

Cost-plus approach 

The concept of whether saving costs can be a legitimate aim has been explored in various cases, resulting in the cost-plus approach. This acknowledges that a cost can be a legitimate aim, but it must be weighed alongside other factors. The EHRC codes state that discrimination cannot be justified solely on the basis of cost savings. To avoid discrimination, employers will need to be able to show the plus factor. 

For example, the administrative time incurred in applying for a sponsorship visa may be a costs-plus justification for avoiding this route. This was evidenced in Mrs Elizabeth Ryan v South West Ambulance Services NHS Trust. Mrs Ryan brought an indirect age discrimination case against the trust following a recruitment campaign specifically targeting employees suited to management positions. Although the pool was ruled to cause a disadvantage, it was held that the trust would have been able to rely on a justification defence being the need to fill short-term immediate vacancies. This case gives some comfort that the need to fill vacancies quickly can help avoid discrimination claims.

Clawback arrangements 

Understandably, employers will seek to protect their financial position against employees who are supported to secure a work visa in the UK, and then decide to leave employment at short notice. However, it may be discriminatory in the UK if the clawback agreement disproportionately affects a particular group based on a protected characteristic, whether this be sex, age or race. If an employer wishes to include a provision where they can attempt to recover the immigration costs, therefore, they must ensure it is applied consistently and fairly to all.  

Repayment clauses may be included in an employment contract to cover various scenarios to suit everyone’s employment. For example, the contract may include a clause allowing businesses to recover immigration fees should an employee leave within a certain time. Additionally, employers may wish to include wording setting out circumstances in which no repayment of costs will be necessary, such as the termination of employment under specific circumstances.  

It’s important to note that clawback clauses should not be seen as an attempt to force employees to stay in employment and employer sponsorship costs should not be included. 


  • Approach these issues on a case-by-case basis, being alive to the risks
  • Consider whether a role could qualify for a sponsored work visa (taking account of the applicable skill and salary requirements)
  • Map out the reasons for wanting to avoid incurring immigration costs and processes for a particular role
  • Keep an open mind on such issues

The government’s focus on net migration levels appears to be increasing. It remains to be seen whether further measures will be introduced to attempt to restrict the levels of economic migration to the UK, such as a reintroduction of the RLMT or perhaps a return to annual limits on migration levels. 

Joanne Hennessy is a business immigration partner and Jonathan Rennie an employment partner at TLT