Key lessons from recent sponsor licence suspensions and revocations in the care sector

Care sector employers with sponsor licences continue to experience increased scrutiny from the Home Office, leading to large numbers of licence suspensions pending investigation and revocations of these licences.

With a licence suspension, a business cannot sponsor any new employees whilst it is pending although its sponsored workers can continue to work for them. A licence revocation, however, can be disastrous for the business as it loses the licence altogether, and all foreign workers must stop working for them.  Visas of any sponsored workers will be curtailed, and they need to either secure sponsored employment elsewhere or return home.

There is no right to appeal against a sponsor licence revocation, and a sponsor cannot apply for another licence for at least 12 months. A licence revocation can only be challenged through Judicial Review, which is legal action through the High Court.

Recent High Court cases

Encouragingly for sponsors, there have been some recent successful challenges to sponsor licence revocations, although these have been on specific technicalities as opposed to being able to overturn the substantive allegations.

The latest case is R (New Hope Care Ltd) v Secretary of State for the Home Department [2024] EWHC 1270 (Admin). The challenge was successful at the High Court on the ground of procedural unfairness alone.  The Home Office had suspended the care home operator’s sponsor licence without giving any reasons for suspension, and later revoked the licence without giving any opportunity for a response to the allegations of non-compliance. So, the Home Office failed to follow the procedure they had set out in their suspension letter and that which was set out in the sponsor guidance.

Two other recent cases came before the High Court with different outcomes:

• In Supporting Care Ltd, R (On the Application Of v Secretary of State for the Home Department [2024] EWHC 68 (Admin),  the licence revocation decision was also overturned as the High Court decided that the Home Office failed to conduct an adequately reasoned global assessment of all relevant considerations in deciding whether to revoke or downgrade the sponsor licence. A Home Office appeal of this judgment is expected to decide whether the wider impact of a revocation needs to be taken into account when making a decision to revoke a licence, at least where the revocation decision is discretionary as opposed to mandatory.
• In Prestwick Care Ltd & Ors v Secretary of State for the Home Department [2023] EWHC 3193 (Admin), however, the High Court upheld the licence revocation decision. The sponsor had argued the Home Office should take into consideration the wider impact on its employees, the local community such as commercial businesses and the effect on local care and health services, but it was decided that this was not relevant where the revocation was considered mandatory.

Key points for sponsors

Considering the recent cases of sponsor licence revocations, here are some key points for employer sponsors.

Firstly, a number of factual circumstances caused the Home Office concern and led them to revoke the licences: 

• An excessive number of certificates had been assigned within a short timeframe (in New Hope, 156 were issued in eight months).
• Sponsored workers were paid less than the salary detailed on their certificates, paid less than the minimum wage, not receiving sick pay, and/or were paid in cash.
• Sponsored workers were not performing the duties outlined on their certificates.
• Sponsors were passing on the costs of sponsorship (certificate and skills charge fees) to the sponsored worker.
• The sponsor’s record keeping was inadequate.
• Visa expiry dates were not being recorded.
• There was either a lack of or no evidence of right to work checks being carried out correctly.

Numerous factors can lead to a revocation and the above is not an exhaustive list. Some may be considered very serious and have significant consequences for both the sponsor and possibly even workers.

Secondly, the Home Office has to follow a set procedure once they decide to investigate a sponsor and consider revoking a licence, including:

• To suspend the licence and provide reasons for any suspension in writing.
• To provide the sponsor 20 working days to respond to the concerns raised and provide any necessary evidence.
• To review and consider any reasons and evidence provided and communicate a final decision with reasons as to why they have still decided to revoke the licence.

Thirdly, a decision to revoke a sponsor licence cannot be appealed, so the only method of challenge is a judicial review application, which must be brought within three months and needs to be well prepared. Where a Home Office decision to revoke is received, you should seek legal advice immediately to consider whether a judicial review application is an option and how you can limit the impact on your employees and business. 

While the election is imminent and the intentions of a future government is unpredictable, it is certain that investigations, suspensions and revocations are likely to continue. Labour, if elected, has not indicated any intention to change the status quo. Instead, they intend to introduce a workforce plan and fair pay agreement for employers to adhere to and may increase penalties for rogue employers. The onerous nature of the sponsorship regime is therefore likely to continue for sponsors and the care sector especially, identified as particularly vulnerable, is expected to remain a sector of interest for the Home Office.

To safeguard their business and ensure compliance with sponsor licence requirements, employers regularly instruct our business immigration solicitors to carry out a mock compliance audit or to advise them from the point that they expect a compliance visit. We can also correspond with the Home Office from the outset on their behalf, help them prepare for the visit, and deal with any subsequent Home Office action.

This article was first published in The Carer in June 2024.