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UK contractors replaced with half price overseas IT workers

Published on Jun 4, 2009 |

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IT contractors recently laid off by BT have been replaced by Indian nationals, transferred via a loophole in the work permit system, by virtue of BT's 31% stake in an Indian technology firm.

UK contractors replaced by overseas workers

The findings, broadcast on File on 4 this week, may not come as much of a surprise to contractors - many of whom will have worked on projects where outsourced workers are imported from overseas, at far lower rates.

We discussed the aims of the show with its producer several weeks ago, and it was clear that the programme sought real examples of how UK jobs have been lost to the Intra-Company Transfer system, rather than relying on the copious amounts of anecdotal evidence.

An ex-contractor from BT's troubled Global Services Unit, told the show that many of the contractors recently laid off by BT have been replaced by Indian workers who were paid nearly half the market rate for their skills.

The contractor said that the replacement workers were supplied by Tech Mahindra, an Indian company that BT Global Services has a 31% stake in.

Work permit loophole

Although it is not thought that BT have broken any rules by hiring workers via its subsidiary, many in the UK recruitment industry fear that Intra-Company Transfer rules are being abused to the detriment of home-grown IT workers.

Last month, APSCo called on the Government to close this loophole which allows companies to hire non-EU workers without having to advertise the vacancies first in the UK.

The PCG has also launched an evidence gathering campaign following concern that abuses of the work permit rules have been taking place, particularly in the IT industry.