Will the well of overseas workers dry up for UK oil and gas?

By Joanna Hunt, Fieldfisher

Post-Brexit, many oil and gas businesses operating in the UK who have previously relied on EU labour to fulfil contracts are running into difficulties (photo: Getty Images/Fieldfisher)
Post-Brexit, many oil and gas businesses operating in the UK who have previously relied on EU labour to fulfil contracts are running into difficulties (photo: Getty Images/Fieldfisher)

Following the end of free movement post-Brexit, Fieldfisher considers what visa options are available for oil and gas businesses looking to use foreign contractors in the UK.

Like many industries in the UK, the oil and gas industry often relies on foreign contractors to work on short-term projects.

Using contractors can provide a company with flexibility and specialist skills, which can be mobilised quickly and efficiently, without the administrative headache and associated costs (tax, pensions, national insurance etc.) of onboarding permanent employees.

As the dust settles following the end of free movement for EU nationals post-Brexit, many oil and gas businesses operating in the UK who have previously relied on EU labour to fulfil contracts are running into difficulties.

Whereas previously, free movement rights allowed these workers to come and go as they pleased and to take on work under different contractual arrangements, now all EU nationals require visa permission to work in the UK.

What are the options?

For foreign workers who are employed by UK companies, the Skilled Worker or Intra Company Transfer routes contained within the Points Based Immigration System are the main options for obtaining visa permission to work in the UK.

For EU and non-EU nationals looking to work in the UK under a non-employment contractual arrangement, the options are more limited.

There are, though, a number of solutions within the UK’s immigration system that enable foreign contractors to work lawfully in the UK.

Standard Visitor Visas
The first and most straightforward step for foreign contractors is to check if they can enter the UK as a visitor to undertake work-based activities. This appears counterintuitive, as the visitor category strictly prohibits work in the UK and prevents visitors providing a service to a business in the UK.

Every rule, though, has its exceptions and the visitor visa category has a number of permitted activities that appear similar to “work” but are allowable while visiting the UK.

For instance, workers who are employed by an overseas company but contracted to provide a service to a UK business are allowed enter the UK as a visitor to meet their client and bill them for their time in the UK.

It is, however, important that the majority of the contract work is carried out overseas and the amount billed must be lower than the amount of the visitor’s salary.

If an oil and gas company requires specialist workers to come to the UK to fulfil a contract, for instance to install or maintain machinery, they may be able to enter as visitors as well.

The list of permissible activities includes a provision that allows an employee of an overseas company to install, dismantle, repair, service or advise on machinery, equipment, computer software or hardware if there is a contract for purchase, supply or lease with a UK company.

This provision was amended in October 2021 to ensure employees of third parties providing labour under the contractual arrangement can benefit as well.

Frontier Worker permit
If the individual in question is a national of the European Economic Area (EEA) or Switzerland then it is worth exploring whether they can apply for a Frontier Worker permit.

This route opened in late in 2020, following the commitment by the signatories to the Brexit Withdrawal Agreement to protect the rights of frontier or cross-border workers once the UK left the EU.

A frontier worker is someone who lives primarily outside of the UK but works in the UK from time to time. If they can demonstrate that they started working in the UK before 31 December 2020, they may be eligible for a Frontier Worker permit if they are completing “genuine and effective” work-based activities in the UK.

The permit is open to both employees and individuals who are self-employed, is free of charge and, if successful, gives the applicant a renewable 5-year permit allowing them to work in the UK.

The International Agreement route
For businesses looking to take on non-EEA/Swiss nationals or EEA/Swiss nationals who do not qualify for a Frontier Worker permit, another option is required.

Returning to the Points Based Immigration System, there is a possible solution within the temporary worker categories, namely the International Agreement route (which is a type of sponsorship visa).

This category incorporates different types of temporary workers, connected by the fact that they are contracted to work in the UK under an international agreement or treaty.

This route is designed for self-employed independent professionals or those providing a service under a contractual service agreement. The work the person is coming to the UK to do must be covered by an international trade agreement such as GATS or the UK-EU Trade and Cooperation Agreement.

What are the risks?

Potential for visa applications to be refused
Visa applications always carry a degree of risk of rejection. Applications by companies to bring workers into the UK on a Frontier Worker permit or under the International Agreement route could be refused for a number of reasons.

Mistakes in the application or issues/anomalies in the employer/candidate’s eligibility criteria can hold up or sometimes entirely scupper the process of bringing in skilled overseas contractors. This is particularly problematic if person is needed in the UK urgently.

Restrictions with sponsorship visas
Certain restrictions apply to sponsorship visas, which makes them burdensome for companies, from a cost and logistics perspective.

The company receiving the services will need to secure a sponsor licence before they can issue certificates of sponsorships to service suppliers under the International Agreement category. This process is complex and difficult to negotiate for those unfamiliar with the system.

A sponsor licence holder also has to meet a series of sponsorship duties that require them to report certain events and keep particular records on file. Failure to meet these duties can lead to the loss of a sponsorship licence.

Sponsorship visas are also inflexible. The contractors can only work for a limited period and only for the business in question in the role specified on their certificate of sponsorship.

The sponsorship system is above all costly. Fees can spiral into several thousands of pounds for businesses wanting to use the system. This may make the system unviable as a long-term option, and companies may need to consider alternative options to sustain labour levels.

Restrictive Visitor Visa rules
Using the visitor category for work-based activities also carries certain risks.

Workers must limit their time in the UK, ensure they keep to the conditions of the visitor rules and not stray beyond the visitor visa’s permitted activities.

For many contractors or freelancers, the visitor rules are not a sustainable option and a more robust work-based visa is needed.

How should oil and gas companies deal with this issue?

The end of free movement has presented many challenges for the oil and gas industry and preserving access to foreign contractors requires strategic planning for the future.

The UK’s immigration system provides solutions, but it is imperative that oil and gas businesses carefully consider contractual arrangements as early as possible to ensure they can source the workers they need.

This involves factoring in the added costs and timeframes it takes to get a visa, and the relevant visa restrictions to avoid their workers from falling foul of the immigration rules.

Joanna Hunt, Head of Immigration at FieldfisherThis article was authored by Joanna Hunt, Head of Immigration at Fieldfisher. Hunt specialises in advising a range of businesses on immigration issues and global mobility matters, including many industry sectors. She has strong links with the professional services and technology industries.