Challenging the suspension and revocation of a sponsor licence

Sponsorship compliance is high on the Home Office’s agenda. Suspensions and revocations are on the rise and the Government has made cracking down on ‘shameless employers’ central to their future immigration policy. The impending government white paper should also set out tougher sanctions for employers who fail to meet their duties as a sponsor.

The loss of a sponsor licence can be catastrophic for a business and its employees. The sponsored workers are likely to lose their jobs, have their visas curtailed to 60 days and need to find new employment to be able to remain in the UK. The sponsor will face an uphill battle to get its licence back, causing major damage to business plans and its reputation.

With more sponsors likely to face compliance action in the coming months, we will look at the process for suspending and revoking a licence and what steps can be taken to challenge this if it was to occur.

The Home Office compliance visit 

The process for revoking a licence will usually start with a Home Office compliance visit. Home Office visits were relatively common a decade ago, when there were fewer sponsors and the Home Office had more resources. Sponsors were routinely visited when a licence was up for renewal to ensure they were still keeping on top of their duties as a sponsor but this pattern fell away as the numbers of licences grew.

Home Office compliance visits are now more targeted.  They may have intelligence to suggest that a sponsor is breaching their duties.  A sponsor’s pattern of sponsoring workers may be suspicious (for instance sponsoring a lot of migrants relative to the size of the business) or the visit may have been triggered by another government department or organisation. But in truth any sponsor could receive a Home Office visit at any time.

The Home Office can pre-warn the sponsor they intend to carry out a visit, but they can arrive unannounced and a sponsor has to allow access to their office or premises when requested. A sponsor can attempt to move the visit to another day, for instance if the Authorising Officer is unavailable. However, this is at the discretion of the Home Office and failure to co-operate with a visit can lead to a licence being revoked.

Representatives should prep their client as much as possible in advance of a visit if there is time. It is helpful to go through the types of questions the Home Office may ask so they are able to put their best case forward. The questions can cover a range of topics but will likely include how they manage their sponsored workers, how they ensure they report the events relating to the sponsored workers to the Home Office and how they keep their records on file.

The Home Office will often check if the companies’ details, including the Authorising Officer’s and Key Contact’s details are up to date. If you have time you could also carry out a ‘mock’ audit to check their systems to ensure they are aware of any potential points of failure. However, the aim should be to ensure sponsors are ‘visit’ ready at any point by reminding them of their sponsorship duties whilst you support them day to day.

During the visit the Home Office will check the sponsor’s HR systems to ensure they are adequate. They will also be looking for evidence to suggest whether their activities pose a threat to immigration control, whether the sponsored workers are breaching the conditions of their visa and whether the sponsor is offering and sponsoring roles which are genuine. This will involve examination of HR processes and procedures and interviews with key personnel and sponsored workers. The Home Office can also check files of non-sponsored workers to ensure right to work evidence is compliant.

Representatives can attend the visit with their client but it will add to a sponsor’s credibility if they are able to advocate for themselves. You can also provide the Home Office with evidence during or after the visit to address any issues and to prevent any adverse consequences.

After a visit is completed, the Home Office team should provide a report setting out whether the sponsor is compliant or in breach of any of their sponsorship duties. If there are concerns, the Home Office should refer to Annex C1 to C3 of the Guidance for sponsors Part 3. These provisions set out in detail the breaches that could lead to the revocation of a licence.

If the breaches are minor then the Home Office may choose to only downgrade a sponsor licence from an A rating to a B rating. This puts a sponsor on an ‘action plan’ which gives them three months to address any issues. During this time they can continue to issue certificates of sponsorship (CoS) to their workers but they cannot sponsor any new workers. If they improve, the licence will be return to its A rating and full privileges will be restored.

If the Home Office considers that the breaches are significant then more serious action can be taken as the sponsor licence can be suspended or even revoked outright.

Suspension of sponsor licence 

If the Home Office is satisfied that there is enough evidence to suspend a sponsor licence without further investigation, they will send the sponsor a letter stating that the licence is suspended along with their with reasons for this decision. This should set out the issues they have concerns about, with reference to the grounds in Annexes C1 to C3. 

While a licence is suspended, a sponsor is unable to assign any CoS and any outstanding visa applications are likely to be placed on hold. The sponsor does get an opportunity to respond to the allegations. They are usually given 20 working days from the date of the letter to submit representations. It is crucially important that they respond fully to the concerns raised and provide supportive evidence in mitigation. For this reason you may want to try and request an extension to the 20 working day deadline to build as strong a case as possible.

The evidence you will need to gather will depend on the issues that the Home Office have raised. This could include;

• Statement from the Authorising Officer responding to the allegations
• Statements from the sponsored workers
• Evidence of your internal HR processes or policies
• Testimonies from clients or business contacts
• Evidence the workers meet the eligibility requirements for their visa if this is an issue.

Ideally you would want to show that the Home Office’s conclusions are wrong or unfair in some way. However, if the sponsor has little to say in their defence, there is still value in a sponsor acknowledging their failings and setting out how they intend to improve their internal processes and procedures to meet the required standards. You can also set out the impact the loss of the licence could have on the business and the wider community to try and dissuade the Home Office from revoking the licence.

The Home Office should consider the evidence provided along with any further evidence they obtain from government departments or law enforcement agencies.  The Home Office will then notify the sponsor of their decision in writing and letting them know what action they intend to take. This will usually be sent within 20 working days of them receiving the response from the sponsor unless the circumstances are particularly complex.

The Home Office has a range of options available. It can lift the suspension and re-instate the licence or downgrade it to a ‘B’ rating. The Home Office may simply decide that the breaches are so serious that the licence needs to be revoked.

Revocation of sponsor licence 

If a licence is revoked, the Home Office will set out their reasons in another letter to the sponsor. Although the Home Office does usually suspend a licence before it revokes, the guidance does allow them to revoke the licence without first suspending.

The Home Office will usually cancel the visa permission of any workers who are being sponsored, curtailing their visas to 60 days. The sponsor will be removed from the register of sponsors and they will not be eligible to apply again for a sponsor licence for at least 12 months (this is going to be increased to two years under new Government proposals).

Challenging revocation of a sponsor licence

There is no right of appeal against a decision to revoke a sponsor licence. As this is a decision made by a public body, the principal remedy at this stage is judicial review. It will therefore be important to establish quickly if there are sufficient grounds to mount a claim. A claimant has only three months from the date of a decision to start proceedings.

The sponsor will therefore need expert legal advice on the merits of pursuing a claim for judicial review and this will likely require the involvement of a barrister. Judicial review proceedings are costly, so a sponsor needs to carefully consider whether they have sufficient grounds to challenge a decision. If this is a lost cause the sponsor may have to accept the licence is gone and focus efforts on a re-application once the cooling off period is over.

If there is merit and the sponsor is keen to press ahead, a pre-action protocol letter detailing the claim will need to be prepared and sent to the Home Office. The pre-action letter should set out the reasons why the decision to revoke the licence is wrong. It’s important to remember this is not an appeal, and you will need to establish a ‘public law error’, which could be mistake of fact, not taking into account the evidence, irrationality, or unreasonableness. 

You will need to give the Home Office at least 14 days to respond. If the Home Office responds maintaining the decision, or does not respond within 14 days, you can then issue judicial review proceedings. This will be in the High Court as the Upper Tribunal does not have jurisdiction to hear challenges to sponsor licence judicial reviews. The Home Office will then be directed to respond and in most cases will defend the revocation decision.

The court will then decide whether to ‘grant permission’. If it does grant permission, in most cases the Home Office will agree to reconsider the revocation decision. If the court refuses permission, you can ask to argue your case at an oral hearing.

The sponsor licence will remain revoked throughout the proceedings, unless the Home Office agrees to reverse its decision. If they do reinstate the licence,  in most cases it will be on a suspended basis.

Your client should be aware that in addition to its own costs, they might be ordered to pay the Home Office’s legal costs if the judicial review is unsuccessful. However if you succeed, it is likely that the  Home Office will be ordered to pay your client’s costs.

It may be that your client has made significant breaches of the sponsor guidance, but nevertheless the decision to revoke the licence is a poor one. In such a case, it is possible to have a successful result by way of judicial review, but your client should be aware that even if they succeed in the judicial review, the licence could be revoked again. Whatever the merits, judicial review is expensive and unpredictable.

‘Prevention is better than cure’

The government is toughening up the sanctions against sponsors,  increasing the cooling off period from one year to two when a licence is revoked and the length of time a sponsor can be on an action plan from 3 to 12 months.

In short, sponsors can avoid compliance action by ensuring they are on top of their sponsorship duties. Businesses are often unaware of the extent of the requirements that the Home Office places on sponsors, so supporting them to understand and upskill on these rules is vitally important, particular for new sponsors.

Simply put, it is easier, cheaper and more effective to prevent a revocation of a sponsor licence then it is to challenge one, so this is time and money well spent for them in the long run.

This article was co-authored by Allan Briddock.