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No High Court help for company stripped of Tier 2 sponsor licence


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The Secretary of State’s decision to revoke an IT consultancy’s Tier 2 sponsor licence was upheld before Christmas in R (Sri Prathinik Consulting Limited) v Secretary of State for the Home Department [2017] EWHC 3204 (Admin).

A stream of case law was cited, most notably Lord Justice Tomlinson’s leading judgment in R (Raj and Knoll Ltd) v SSHD [2016] EWCA Civ 770, ultimately assisting the court to conclude that failure to assign a Certificate of Sponsorship (CoS) within six months of carrying out a Resident Labour Market Test (RLMT) is a mandatory ground for revocation of a licence.

Late assignment of the Certificate of Sponsorship

The claimant’s sponsor licence was granted because it needed IT experts who were unavailable in the resident labour market. The Secretary of State made an unannounced visit to the company’s premises to conduct an audit and found that, among other things, there was no retained evidence of an RLMT for a Mr Sarwar. The failure to retain evidence was contrary to Appendix D of the Tier 2 and 5 sponsor guidance, as it stood in April 2015.

Following suspension of the licence on the basis of inadequate record keeping, information submitted by the company suggested that it had completed an RLMT, but revealed that Mr Sarwar’s CoS had been assigned to him more than six months afterwards. This was contrary to a requirement in paragraph 29.2 of the guidance:

All CoS, restricted or unrestricted, must be assigned within 6 months of the date the vacancy was advertised.

The failure to comply with paragraph 29.2 was used as a mandatory ground for revocation of the sponsor licence, under Annex 5(u). This stated that the Secretary of State would revoke a licence if:

You assign a Tier 2… [CoS] to a migrant and on that CoS… or restricted CoS… you stated… that you had carried out a Resident Labour Market Test and the test you carried out did not meet the requirements set out in this Guidance.

The company argued that the assignment of the CoS and the completion of the RLMT were two distinct policies that attract different penalties for breach; that the mandatory grounds for revocation in Annex 5(u) relate to the completion of the RLMT, not the late assignment of the CoS. On the basis that Annex 5(u) had been misapplied, the company suggested that its circumstances “might have fallen within the scope of downgrading sanctions” rather than revocation.

Secretary of State entitled to revoke sponsor licence

The court found in favour of the Secretary of State, agreeing that the sponsor guidance must be read as a whole. The RLMT test includes the completion of the RLMT and CoS assignment: the two policies cannot be distinguished and the application of Annex 5(u) calling for mandatory revocation was correct. As Anthony Elleray QC put it in his judgment:

The Resident Labour Market scheme can only sensibly work if attendant assignments of CoSs take place within the six month period required by paragraph 29.2.

He went on to explain that even if the Secretary of State had been wrong to apply Annex 5(u) specifically in this case, the decision to revoke would remain at her discretion:

The decision to revoke for breach of Paragraph 29.2 of the Guidance appears to me wholly and rationally within the discretion of the SSHD. The decision letter read in the round clearly refers to the discretionary right to revoke as well as to the mandatory ground for revocation relied upon.

The fact that the guidance had since been amended to include paragraph 28.19, which now says “the vacancy must have been advertised for at least 28 days within the 6 months before you assign the CoS to a migrant”, was not considered relevant.

The decision reinforces the lawfulness of the sponsor guidance and promotes the delegation and shifting onus of immigration control onto PBS sponsors. Although it provides certainty in a politically charged and variable environment for immigration, the decision may cause sponsors to reconsider whether the increasing cost of employing migrants and the penalties readily levied for non-compliance outweigh the alleged advantages of obtaining a sponsor licence.

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Pip Hague

Pip Hague is a Senior Practice Development Lawyer at Lewis Silkin.