Tier 2 sponsor licences - when things go wrong


16 December 2018
As many employers will no doubt attest, obtaining a Tier 2 sponsor licence from the Home Office can be a difficult exercise. The Home Office requirements for supporting documents are very particular, and in many cases they take it upon it upon themselves to closely examine the employer’s HR systems to assess whether they are suitably rigorous.

But an employer which wants to employ skilled migrants from outside the EEA who do not otherwise hold the right to work in the UK has no choice other than go down the Tier 2 sponsor route. Otherwise they cannot sponsor and employ Tier 2 skilled workers.

But the difficulties for an employer do not always end with acquiring the sponsor licence. The Home Office continues to have a regulatory role after the sponsor licence has been granted, and sometimes they suspend or even revoke a sponsor licence.

This could occur, for example, if an employer applies to extend their sponsor licence after the four-year grant and the extension application is refused. Or it might occur if the Home Office has received “intelligence” - for example a sneaky phone call - that something is not right.

In the latter case the Home Office might make an unannounced visit to the employer; a frightening prospect indeed, and something that recently happened to Liral Veget Training & Recruitment Ltd, a company which held a Tier 2 sponsor licence and which - as its name suggests - carries out activities in the training, recruitment and consultancy services fields.

This was evidently a very heavy visit; it was a joint venture with HMRC. In the course of the visit the company’s director, as well as four Tier 2 employees were interviewed, and various company records were looked at.

And, as a result, the company’s sponsor licence was revoked.

This was no doubt a bit upsetting for the company and also a bit upsetting for the Tier 2 employees, who suddenly found that they no longer had a job: for the entirely logical reason that an employer who no longer holds a Tier 2 sponsor licence can no longer employ Tier 2 migrants.

Liral Veget were not prepared to take this lying down, and they went to law. To the High Court in fact, which heard their judicial review application (with the employees as “interested parties”). It was, Liral Veget said, wrong and unfair for the Home Office to have revoked the sponsor licence.

There were a few different issues in the case, but the biggest issue was that the Home Office asserted that whereas the company had sponsored and employed four of their employees in Tier 2 jobs (ie skilled jobs), the actual work carried out by those employers did not closely correspond to the respective job descriptions - specifically, it was at a lower level.

In Tier 2 world this is a major problem, because the idea behind the scheme is that it enables employers to employ people from outside the EEA with skills which are not available from the indigenous workforce. If employers are undermining the system by using it to employ migrants to carry out low-skilled jobs then of course they are on the wrong side of the rules.

Anyway, one of the arguments that the company used was that they were a small organisation and people were generally expected to “muck in” and carry out tasks that were outside their strict job description. This argument might seem to hold at least some logic but it did not prevail. The court determined that the overall picture was one of employees carrying out work which was below the appropriate skill level. For example, a person employed as an accountant was routinely carrying out the sort of work that would typically be done by a bookkeeper, and this was clear evidence that the Home Office was justified in its actions.

The court took a firm view of the situation:

“As a holder of a Sponsor Licence, the Claimant was required to be scrupulously accurate in the information to be provided in the COS submissions. There was no room for artistic licence whether in the attribution of job titles or otherwise. It is no answer for the Claimant to point to individual pieces of higher-level work when the COS submissions had failed to give an accurate impression overall of the role.”

(“COS” refers to “certificate of sponsorship”, which is an important virtual document that the employer creates and which sets out the details of the job, including a job description.)

If you think this sounds stern and unbending you are right, and there were some informative words elsewhere in the court’s decision:

“The courts should respect the experience and expertise of UKBA when reaching conclusions as to a sponsor's compliance with the Guidance, which is vitally necessary to ensure that there is effective immigration control.”

The courts clearly see that “effective immigration control” is at stake here, and employers can no doubt expect similar treatment from the courts in such cases in future.

So it seems fair to say that if an employer has had their sponsor licence revoked they may face a difficult struggle in getting it back. It also seems fair to say that employers are well advised to keep their Tier 2 affairs in good order in the first place and they should seek good legal advice in this respect if they think they need it.


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