Immigration: Sponsorship Licence - is it a "fragile gift”?

The reference to a Sponsor Licence  being treated as a "fragile gift" originally comes from a 2014 case concerning a Tier 4 Sponsor. Last month, in a case involving a Tier 2 Licence holder, Judge Justice Haddon-Cave warned Sponsors that the "fragile gift" analogy applied equally to Tier 2 Licences. In this blog post, Jacqueline Moore examines the quotation in its context and also the implications that this case has more generally for Tier 2 Licence-holders.

There have been very few reported cases involving the Sponsor Licensing Scheme; to date, almost all of the litigation that has been brought has been by educational institutions that hold Tier 4 licences. The case of R (Raj and Knoll Limited) v SSHD [2015] EWHC 1329 (Admin) is quite rare as it concerns Tier 2 licences. Raj and Knollis a very significant case for all businesses that hold Tier 2 licences. The general tenor of the judgment is that Sponsors have to exercise extreme care in ensuring that they comply with their duties under the Sponsor Licence Scheme, otherwise they risk losing this precious "gift."

Facts of the Case

The business in the case was a care-home business which had held a licence since 2009, employing 11 "sponsored" workers. The troubles for the business began at an unannounced visit by Compliance Officers in advance of the company's renewal application. The Compliance Officers turned up at the company's registered address only to find that it was now a convenience-store which the business had sold the year previously.  Matters went from bad to worse when the company's Authorised Officer admitted to the Home Office that the business, in fact, no longer operated from these premises and that it had never been the place of work for any of the company's Tier 2 staff.

Home Office suspicions were triggered by this discovery and they suspended the licence. As part of the suspension proceedings, the Compliance Team identified five areas of concern:

1. Failure to retain the correct evidence to establish that a Resident Labour Market Test (RLMT) had been properly carried out.
2. Admission by the Authorising Officer that the business did not retain copies of qualifications, short-lists or interview-notes.
3. Failure to retain evidence of one employee's right to work; Home Office records revealed this individual did not have the right to work.
4. The omission of one employee from a spread-sheet of visa expiry dates.
5. The Sponsor's failure to report the sale of the premises they had listed as their registered business address, and their admission that no sponsored migrant had ever worked at these premises.

The Home Office were unsatisfied with the responses received from the Company for their alleged failures to comply with their Sponsorship duties and revocation action ensued.

The consequences of revocation are extremely serious for businesses:

1. a curtailment of all existing Tier 2 migrant's visas;
2. the end of the right to issue Certificates of Sponsorship to migrant workers.

For businesses reliant on a skilled migrant work force like this one, these can be disastrous consequences.

Summary of Principles in Sponsor Licensing Cases

The Court began its judgment with an examination of previous litigation and distilled from this the following principles:

1. The court has a limited jurisdiction- the Court makes clear that it considers the Home Office to be experts in these matters and the Court will be very slow to interfere with their findings.  This case must serve as a warning to all businesses who wish to challenge revocation action; only do so if you have very strong legal grounds.
2. Sponsors are reminded of a need to keep their records with "assiduity". All businesses should consider the rules on record keeping set out at Appendix D: https://www.gov.uk/government/publications/keep-records-for-sponsorship-appendix-d
3. Sponsors should implement their duties with all the rigours and compliance of the Home Office.  Essentially, the Court are saying that Sponsor Licence-Holders must adopt the mind-set of the Home Office, which is not a natural mind-set for businesses, whose focus will be on running their companies profitably.
4. The Home Office are entitled to a fairly high level of suspicion.  This is a very concerning development and certainly raises questions in respect of the level playing field in these cases.  The best advice must be that there can be no room for complacency and Licence-Holders must not give grounds to the Home Office to cause suspicion.  For larger companies with HR departments who have dedicated time and energy to deal with such matters, this should not present as an onerous challenge - but for smaller companies who are trying to deal with licence issues at the same time as meeting the business day-to-day running requirements, this is a real challenge.

Some Tips for taking care of your licence

1. The first recommendation is that all licence holders should ensure that they re-read the Sponsor Licence Guidance (all 166 pages of it!) - https://www.gov.uk/government/uploads/system/uploads/attachment 
2. Businesses should ensure that they consider carefully Appendix D, and carry out their own internal audit to ensure that they have retained all the necessary documentation.  If businesses need assistance with an audit, either as part of a review or in advance of a Home Office visit, this is a service Drummond Miller can provide.
3. Businesses should use the handy right to work checklist form that the Home Office have now produced in respect of all employees: https://www.gov.uk/government/publications/right-to-work-checklist
4. Businesses should remind themselves of the reporting events that they must adhere to.
5. Businesses should be very careful in how they assign CoS - and be aware of the new "genuineness test" when assigning Certificates of Sponsorship.

The Home Office will undoubtedly be emboldened by this decision and encouraged to adopt a more bullish approach; this may lead to errors in decision-making.  Whilst a challenge to Home Office action is possible, this judgment makes clear that the Courts will be very slow to interfere and therefore the best advice to businesses is to treat their licence as a "fragile gift" and to look after it accordingly.

For further information on Sponsor Licensing or any aspect of Business Immigration, please contact Jacqueline Moore in the firm's Glasgow Office.  For updates on Business Immigration and other areas of Immigration, you can follow Jacqueline on twitter.