Care home refused permission in challenge to revocation of sponsor licence for underpaying staff

Permission for judicial review and interim relief has been refused in a case where the claimant care home sought to challenge the revocation of its sponsor licence. THe revocation was because that the Home Secretary was satisfied that staff were being paid less than minimum wage. The interim relief application was for the revocation decision to be replaced with a decision to suspend the licence, pending the outcome of the judicial review. The case is R (Geocare Services Ltd) v Secretary of State for Home Department [2025] EWHC 3446 (Admin).

Following receipt of data from HMRC showing that sponsored workers were being paid less than stated on the certificate of sponsorship, the Home Office contacted the sponsor on 10 September 2025 and 6 October 2025 asking for bank statements with employee salary information as well as payroll evidence. The payslip information provided by the sponsor showed that two of the employees were being paid significantly less than indicated on their CoS.

The sponsor explained this by saying that the staff were not working their contracted hours, for various reasons. It appears there was also a deduction for transportation which was explained as relating to staff who did not drive and so private arrangements for their transport had been made, 94% of the costs of which was met by the sponsor.

The sponsor licence was revoked with immediate effect on 23 October 2025, with the Home Office saying that the reasons given did not meet the requirements of S4.31 in particular as the changes had not been notified to the Home Office via the sponsorship management system.

The judicial review essentially challenged the decision to revoke rather than downgrade the sponsor licence. The court said that the breach fell within Annex C1 of the guidance (“circumstances in which we will revoke your licence”), thereby distinguishing it from Prestige and J’s Supermarket which the claimant sought to rely on but which concerned a breach of Annex C2 (“circumstances in which we will normally revoke your licence”).

The court also dismissed arguments that there was a failure to take into account relevant considerations and an argument that Annex C1(aa) was not meant to penalise employers when workers reduce their hours, and the hourly rate paid still met the salaries set out in the employees’ CoS.