The High Court ruling in Prestwick Care Ltd & Ors v Secretary of State for the Home Department [2023] EWHC 3193 (Admin) has upheld the Home Office’s decision to revoke the sponsor licence of a large care home operator in the North East.

The judgment is a harsh reminder that, despite the downturn in Home Office compliance visits since the pandemic, sponsor licence compliance is still taken seriously and non-compliance can lead to significant consequences for employers. We look at what went wrong for the care home operator and what lessons can be learned for other sponsor licence holders.

Background

The care home operator employed 219 Skilled Workers under the Health and Care visa scheme. The Home Office conducted a compliance visit in October 2022, which resulted in the revocation of the organisation’s sponsor licence in February 2023.

The Home Office considers sponsorship of foreign workers to be a privilege, not a right, and sponsor licence holders are subject to certain duties to ensure that those benefiting from employing foreign workers “play their part in ensuring the immigration system is not abused”. Essentially, effective oversight of foreign workers is farmed out to employers. The Home Office stipulates that licence holders must:

The compliance visit uncovered several instances of non-compliance with these duties.

Genuine vacancy

The Home Office identified five Senior Care Assistants that were not performing the duties that had been outlined in the job description on their Certificate of Sponsorship (CoS).

The Home Office sponsor duties and compliance guidance provides that a CoS can only be assigned for a genuine vacancy. A vacancy which contains a deliberately exaggerated or incorrect job description is listed as an example of a vacancy not to be considered genuine. Failing to meet the genuine vacancy requirement is serious. If sponsored workers are failing to undertake the duties outlined on their CoS this will result in a mandatory revocation of the employer’s sponsor licence.

It is very easy to simply copy over job descriptions that have been used in a previous CoS for a similar role, but this is an important reminder that job descriptions need to be checked to ensure workers will genuinely be carrying out the duties stated on the CoS.

Pay different to salary stated on CoS

The Home Office identified one instance where a nurse had been paid a reduced salary while she was in training, at a level that differed to the salary stated in her CoS. Further incidents of differing salaries were identified across the organisation.

Paying Skilled Workers less than stated on their CoS, unless notifications are made to the Home Office or the reduction is otherwise permitted in the sponsor guidance, is another mandatory ground for revocation of a sponsor licence.

Sponsors should always be careful to ensure that the gross salary stated on the CoS is the salary that will actually be paid to sponsored workers. Allowances are permitted but can not be used to make up the gross salary stated on the CoS. Deductions are only permitted where they come from a worker’s net salary.

Non-compliance with UK employment law in relation to sick pay

Sponsor licence holders are required to comply with UK law, including UK employment law on sick pay and National Minimum Wage Regulations. The Home Office identified three employees who did not receive sick pay or were told that no sick pay was available for their role.

Non-compliance with UK employment law will normally result in sponsor licence revocation. While most sponsors will already comply with employment, and wider UK law, it is worthwhile ensuring that any company policies or contracts are kept up to date to reflect the current law.

Recouping immigration skills charge costs from sponsored workers

The sponsor guidance stipulates that the immigration skills charge cannot be passed on to or recouped from Skilled Workers.

The Home Office identified that the care home operator had been recouping a payment of £3,199 from each sponsored worker. As the payment of £3,199 exactly matched the fee the sponsor would pay to the Home Office to assign a three year CoS (comprised of £3,000 immigration skills charge and £199 CoS assignation fee), it was concluded, and ultimately admitted, that this was recouping of the immigration skills charge. Although not a mandatory ground for revocation, employers found to be recouping these costs will normally have their licence revoked.

Although sponsors are not allowed to recoup costs paid for assigning a CoS, they are permitted to recoup the visa application fee and the immigration health surcharge if they decide to help Skilled Worker applicants with these payments. Both the visa application fee and the immigration health surcharge are ultimately the migrant’s responsibility under the current system. Sponsors should however always be careful to ensure that any deductions are not made from a Skilled Worker’s gross salary as this will result in a gross salary that is different to that stated on the CoS.

Ineffective monitoring of employees

Sponsors must have effective oversight of their sponsored workers, including monitoring of their visa expiry dates. A random sample review of the care home operator’s right to work checks uncovered that visa expiry dates for eight sponsored employees had not been recorded in its system.

Right to work checks must always be conducted before employment commences and, where an employee has a time-limited right to work in the UK, this must be recorded and diarised accordingly. The Home Office guidance stipulates that a sponsor licence will normally be revoked where the Home Office is “not satisfied that [sponsors] are using a process or procedure necessary to fully comply with [its] sponsor duties”.

It is important that all organisations, particularly sponsor licence holders, have effective right to work checking processes in place. In this case, even though the employees’ visas hadn’t expired yet, the care home operator was penalised for simply not recording the visa expiry dates effectively.

Poor record keeping

Sponsors are required to keep various records on sponsored workers, including a history of each sponsored worker’s contact details and address history. The care home operator’s records were found to contain incorrect addresses for seven sponsored workers. Failure to keep effective records may lead to revocation of a sponsor licence, although it is not grounds for mandatory revocation.

These details may seem minor or insignificant but failure to keep records of sponsored workers whereabouts will be taken seriously by the Home Office. If an organisation is unable to tell the Home Office where workers is living, or how to contact them, it will raise red flags as to their effective oversight of sponsored workers.

Conclusion

The care home operator asked the High Court to consider the wider effect that revocation of its licence would have on its employees and the local community. With local hospitals overflowing and a shortage of care staff compounded with hundreds of vulnerable residents, the impact of this decision is clearly significant.

Ultimately, it didn’t matter, and the court held that it was not for the Home Office to consider the commercial impact on the business and the effect on local care and health services. Instead, the Home Office are only concerned with ensuring that organisations comply with their sponsor duties, no matter who they are or how big they are.

Taken separately, the care home operator’s breaches of its sponsor duties may seem minor in some instances. Taken together, however, the court found that

they point to a lack of rigour in following the guidance and record keeping and cannot but have led to the conclusion that the claimant could not be trusted to comply with its duties as sponsor, and it is trust which is the watchword of the sponsorship system.

If this judgment worries you as a sponsor, it may be beneficial to seek a mock audit from an independent legal advisor who can alert you to any potential compliance issues, and help you take steps to correct them.