Gharabli v Cedar Hope Care Services
Mrs Gharabli worked as a support worker for Cedar Hope Care Services from February 2023 and was later promoted to senior support worker.
During her employment, she discovered that overseas support workers sponsored under the Skilled Worker route were being paid £12.31 per hour, while domestic (i.e. non-sponsored) support workers undertaking the same role received £10.50 per hour.
The tribunal heard that the higher rate for sponsored workers reflected the minimum salary threshold required under the Skilled Worker visa route at the time.
According to the evidence before the tribunal, around 80 per cent of the workforce were overseas workers receiving the higher rate.
Cedar Hope Care Services argued that overseas workers carried additional responsibilities, including community work and preparing social reports for court proceedings.
The employer also argued that it paid workers in accordance with legal requirements linked to Skilled Worker sponsorship and argued that limiting or avoiding overseas recruitment would otherwise have been the practical alternative.
Tribunal findings
Employment Judge McCooey found that domestic and overseas support workers were carrying out materially the same role during the relevant period.
The tribunal held that the pay structure placed domestic workers at a disadvantage because they received lower pay than overseas sponsored workers performing equivalent work.
The tribunal accepted that compliance with immigration salary requirements was capable of amounting to a legitimate aim. However, it concluded that Cedar Hope Care Services had not demonstrated that the pay disparity was proportionate in the circumstances.
In particular, the tribunal found there was insufficient financial evidence showing why domestic workers’ pay could not have been increased to match the overseas worker rate.
The tribunal also found that the employer had failed to consider less discriminatory alternatives.
Mrs Gharabli succeeded in claims relating to indirect race discrimination and detriment following protected disclosures. She was awarded compensation totalling more than £14,000, including injury to feelings, financial loss and interest.
Implications for Sponsors
The decision in Gharabli v Cedar Hope Care Services highlights a number of concerns for sponsors.
Immigration compliance does not remove equality law obligations
The decision does not undermine the requirement for sponsors to comply with Skilled Worker salary thresholds.
Under the Immigration Rules, sponsors are still required to ensure sponsored workers are paid at or above the applicable salary threshold and occupation going rate.
However, the tribunal’s reasoning illustrates that immigration compliance does not operate separately from wider employment law obligations.
Where sponsored workers receive materially higher pay than domestic workers carrying out equivalent duties, employers may face indirect discrimination risks if they cannot objectively justify the disparity.
Care sector employers may face increased scrutiny
The case is especially relevant to care sector sponsors, where overseas recruitment has historically formed a substantial part of workforce planning.
Many providers increased sponsored worker pay to satisfy immigration salary thresholds while wider workforce pay structures remained lower.
That approach can create legal and employee relations risks where workers are doing substantially the same job but receive different pay.
The tribunal also placed particular weight on the absence of financial evidence explaining why equivalent pay could not have been extended to domestic workers and the lack of consideration given to less discriminatory alternatives.
Sponsor Compliance Risks Remain Significant
The decision does not reduce or weaken sponsor salary compliance obligations under the Immigration Rules. Sponsors are still required to ensure sponsored workers are paid at or above the salary level stated on the Certificate of Sponsorship and the applicable Skilled Worker salary threshold and occupation going rate.
UKVI continues to scrutinise sponsor salary arrangements closely during compliance activity. Common problem areas include using outdated salary thresholds or going rates, incorrect salary calculations for variable working patterns, reliance on payments that cannot be counted towards salary requirements, failures to report salary reductions and situations where actual pay falls below the level recorded on the Certificate of Sponsorship.
Where breaches are identified, enforcement consequences can be severe. UKVI action can include sponsor licence suspension or revocation, curtailment of sponsored workers’ permission, civil penalties for illegal working breaches, increased Home Office audit activity and restrictions on future sponsorship activity.
Consequently, sponsors relying heavily on overseas recruitment may increasingly need to review internal pay benchmarking across sponsored and non-sponsored roles before implementing immigration-driven salary increases.
DavidsonMorris Strategic Insight
The judgment was heavily fact-specific, and the tribunal did not suggest that sponsors cannot pay overseas workers more where immigration rules require it. The central issue was whether the employer could demonstrate that the pay disparity was reasonably necessary and proportionate in the circumstances.
That said, given the Home Office’s increasing focus on sponsored worker pay rules and increases to Skilled Worker salary thresholds, sponsors are facing growing operational and legal pressure, particularly in sectors where sponsored worker pay now exceeds historic workforce pay structures.
Employers are increasingly having to balance UKVI salary compliance obligations against wider employment law risks, including equal pay concerns, indirect discrimination exposure, workforce relations issues and heightened Home Office scrutiny of sponsor salary practices, calculations, going rate compliance, contractual pay arrangements and whether sponsored roles genuinely reflect the duties and remuneration stated on the Certificate of Sponsorship.
Where dfferential pay linked to immigration compliance is likely to attract closer examination is where sponsored and domestic workers perform substantially the same role. Sponsors should therefore review whether pay differences are supported by genuine distinctions in role, responsibility or operational requirements and retain evidence explaining why the approach is proportionate in the circumstances.
Need Assistance?
DavidsonMorris are UK business immigration and employment law advisers supporting sponsor licence holders with workforce compliance, Skilled Worker sponsorship and employment risk management.
We advise employers on salary compliance and the interaction between sponsorship duties and wider employment law requirements, including discrimination and workforce governance risks.
For advice on sponsor compliance, Skilled Worker salary requirements or managing immigration-related workforce issues, contact us to arrange a fixed-fee telephone consultation.
