Care provider successfully challenges revocation following Home Office salary miscalculations

A care provider has successfully challenged the Home Office’s decision to revoke its sponsor licence after the High Court found the decision maker failed to properly consider explanations for apparent salary shortfalls and reached irrational conclusions about genuine vacancies.

Notwithstanding the Home Office’s firm stance on compliance, the judgment in R (On the Application of Treal Care (UK) Ltd) v Secretary of State for the Home Department [2025] EWHC 1797 (Admin) demonstrates that courts will still intervene where the Home Office’s approach is fundamentally irrational or fails to properly engage with evidence.

Background 

The care provider supplied care staff to the NHS, local authorities and clinical care groups, employing 75 sponsored care workers. Following a compliance visit in March 2024, the Home Office suspended the care provider’s sponsor licence in August 2024. The licence was then revoked in October 2024. The revocation was based on two grounds relating to three specific employees:

1. The employees had not been paid the salary set out in their certificates of sponsorship; and
2. The care provider had no genuine vacancy for those three employees.

The Home Office’s decision focused on the period May to August 2024, during which payslips allegedly showed three workers were not receiving their guaranteed annual salary of £22,400 based on a 40-hour working week.

The care provider challenged the decision on two grounds, arguing the Home Office had misconstrued guidance and made irrational decisions on both the salary and genuine vacancy issues, and failed to conduct an adequately reasoned assessment.

Judicial review

Salary calculations and unpaid leave

The court found fundamental flaws in how the Home Office assessed compliance with salary requirements. For the first employee, the court found she had been on unpaid leave in May and July 2024. The care provider had told the Home Office about these periods of unpaid leave and the details were recorded in the decision letter.

However, the decision maker failed to adjust the annualised pay rate to account for this unpaid leave. The court found that with a minimal adjustment of less than six hours (equivalent to less than one working day), the employee’s pay would have exceeded the required annual rate:

The conclusion in paragraph 56 of the Decision Letter that [the employee] was underpaid is therefore fundamentally flawed because it is inadequately reasoned or irrational. It fails to take into account material facts which were known to the decision maker and were set out in the Decision Letter itself.

Training periods and payment discrepancies

For the second employee the Home Office’s decision was even more problematic. The decision letter contained no conclusion that the employee had been paid less than the required rate between May and August 2024. In fact, the evidence showed she had been paid the correct annualised amount over this period.

The apparent discrepancy arose because the employee had been undertaking training between March and July 2024, and the care manager had failed to notify payroll of her training hours. The care provider subsequently paid her the outstanding amount in a lump sum, which the Home Office acknowledged.

Despite this, the decision maker still concluded that the employee had not been paid the appropriate salary, a conclusion the court found “irrational and inadequately reasoned” given the decision maker’s own analysis.

Compassionate leave and regulatory confusion 

The third employee was working reduced hours on compassionate leave to care for her son who had serious medical issues. The care provider genuinely but incorrectly believed this entitled them to pay a reduced salary under the salary exemption provisions.

The Home Office correctly identified that compassionate leave did not justify the salary reduction, and at the time of the decision, were entitled to conclude that the employee was not being paid in accordance with her certificate of sponsorship requirements.

Genuine vacancy 

The court found the Home Office’s conclusion that the three roles were not genuine vacancies was entirely dependent on the flawed salary analysis. Since the salary issues were unfounded for two of the three employees, and the third involved an honest mistake about exemptions, there was no rational basis for concluding the vacancies were not genuine.

There was no allegation that she was being paid for hours that she had not genuinely worked. There was also no allegation or conclusion that there would have been no work for [the employee] to do if she had not been on compassionate leave.

The Home Office argued that even if the decision was flawed, the court should not quash it under section 31(2A) of the Senior Courts Act 1981, which prevents relief where it is “highly likely” the outcome would not have been substantially different.

However, since the court found the care provider had not committed breaches that would justify mandatory revocation, this argument failed and the decision was quashed.

Implications

The recent Court of Appeal decision in Prestwick Care demonstrated that mandatory revocation decisions have limited scope for challenge, but regardless, the Home Office must act fairly when imposing serious penalties. This case reinforces that principle.

The Home Office ignored or misconstrued the evidence submitted by the care provider that explained the reasons for the alleged salary shortfalls, and ultimately revoked the licence based on incorrect information. The judgment emphasises the importance of clearly documenting and explaining circumstances that might affect compliance, and the realistic prospect of a successful challenge where the Home Office fails to properly consider such explanations.