And yet another care home's sponsor license has been revoked - what should employers be aware of from recent decisions on sponsor licence revocations?

Home Office scrutiny of sponsor licence compliance has increased significantly over the last year. If the Home Office believes that a sponsor has not complied with its duties, the Home Office may suspend or downgrade the licence and, in some circumstances, even revoke the licence.

An increase in licence revocations has led to a number of businesses challenging the Home Office’s decision to revoke the licence through the courts. The High Court recently considered another case involving the decision of the Home Office to revoke a care home sponsor license in R (Tendercare Management Ltd) v Secretary of State for the Home Department [2024] EWHC 2154 (Admin) and the High Court effectively upheld the Home Office’s decision. 

Background

The Home Office revoked Tendercare’s sponsor licence as a result of various failures to comply with its sponsor duties.

The grounds on which the Home Office may revoke a sponsor license are set out in three Annexes to the Workers and Temporary Workers: guidance for sponsors part 3: sponsor duties and compliance (accessible) - GOV.UK . Annex C1, also known as the "mandatory grounds of revocation", sets out when the Home Office will revoke a sponsor licence. The Home Office may revoke the licence immediately in these circumstances and without first suspending the licence.

Tendercare was found by the Home Office to be in breach of numerous sponsor obligations. These included:

• Tendercare supplying certain of its sponsored workers to other care home operators when those care homes faced staff shortages. The Home Office took the view that Tendercare was effectively acting as an employment agency or business and that it had supplied a sponsored worker to a third-party company. This is generally not permitted, other than in very limited and specific circumstances which did not apply here.
• Tendercare did not have appropriate processes in place to track employee absences and in many cases the reason for an employee’s absence was not recorded. Tendercare instead tracked absences through timesheet records which did not distinguish between types of absence. The Home Office was not satisfied that Tendercare had in place a process or procedure necessary to fully comply with its sponsor duties.

Court decision

The court upheld the Home Office’s finding that in both of the above areas the sponsor had breached their sponsor duties. 

Tendercare also argued that:

• the Home Office had not exercised its discretion before deciding to revoke the sponsor licence and that the breaches of the sponsor guidance were of a minor nature;
• the Home Office had, wrongly, not considered the wider impact the decision to revoke the license would have; and
• the Home Office should have instead issued the sponsor with an improvement or action plan for improvement, rather than revoking the licence.

The court did not agree with any of these arguments and effectively upheld the Home Office’s decision to revoke the licence. 

Key points for sponsors

This decision highlights a number of important points for all sponsors to be aware of:

• Breaches by a sponsor of sponsor guidance will be considered as a whole, not individually. If this had been a case that only involved an Annex C2 or C3 breach (i.e. a non-mandatory revocation breach), the Home Office should first consider if there are reasons not to revoke the licence. However, in the case of an Annex C1 breach where there are grounds for mandatory revocation, the Home Office is entitled to revoke a license immediately, without further investigation and without having to assess the potential wider impact of the decision. There is also no obligation on the Home Office to issue an improvement or action plan first in these circumstances.
• The fact the sponsor guidance is labelled as “guidance” does not mean that discretion must be applied in all cases and the Court clarified that sponsor guidance can contain and set out absolute rules, such as the mandatory grounds of revocation.
• The court emphasised that arrangement between the Home Office and the sponsor license holder is a conditional arrangement. Sponsor licence holders are expected to know their duties from the outset and accept the consequences of breaching those duties.

Comment

The latest government data shows that in Q2 of 2024 alone, 499 Skilled Worker sponsor licenses were revoked. In comparison, only 377 Skilled Worker licenses were revoked in the whole of 2023. These figures demonstrate that the government is continuing to take a stricter and more focused approach to sponsor license compliance.

Interestingly, the Home Office noted in their investigation of the care home that Tendercare operated as a “respectable” employer and that there were no wider issues identified, such as issues in relation to National Minium Wage, holiday entitlement, supervision etc. However, this will not be a valid defence to non-compliance with sponsor duties.

Sponsors should therefore ensure that they are familiar with their reporting and record keeping duties and that they have adequate systems in place to enable them to comply with these duties. This includes ensuring there are processes in place to monitor absences and, importantly, recording the reasons for employee absences. 

Other than in very specific and limited circumstances, sponsors must not contract out or second their sponsored workers to other organisations and, if they wish to do so, should first take advice as to whether this is possible.

If you are a sponsor license holder or you are considering becoming one, and you would like guidance on how best to navigate your compliance duties, Stevens & Bolton’s immigration team are available to help. Please use the contact details listed in this article if you would like to get in touch. We are also able to provide training and to undertake mock audits.