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Sponsor Licence Change of Circumstances

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Given the business-critical nature of hiring workers under the Tier 2 visa route, careful and effective management of your sponsor licence is essential to avoid Home Office enforcement action that could impact your ability to employ skilled visa workers.

As a UK sponsor licence holder, you must ensure you have the necessary HR processes in place to maintain an up-to-date sponsor licence at all times and that you comply with your duties and obligations, including your duty to inform the Home Office of any change in circumstances relating to a migrant worker, as well as changes to your business.

The following guide examines the nature of this duty to report any sponsor licence change of circumstances, from the rules relating to reporting certain migrant activities and/or business changes, to the implications on your business of failing to meet this duty to report.


Sponsor licence duties

The grant of a sponsor licence will allow your business to employ non-EEA migrants to work for you under Tier 2 of the points based system. Tier 2 is the primary immigration route for employing skilled workers in the UK on a long-term basis, including the recruitment of non-EEA migrants to fill jobs that cannot be filled by suitably qualified settled workers.

Having been granted a sponsor licence, significant trust is placed in you as a licence holder. With this trust comes a responsibility to act in accordance with the UK Immigration Rules, and to meet all of the duties and obligations associated with sponsoring a migrant worker.

In particular, you will be responsible for assigning Certificates of Sponsorship (CoS) to each prospective worker that you are looking to employ. You will also be given access to the Sponsor Management System (SMS).

The SMS is an online portal that allows you to carry out day-to-day sponsor activities, including reporting any changes to the Home Office. When you apply for a licence you will be required to nominate various key personnel within your business to manage the sponsorship process and to use the SMS.


Duty to report changes in circumstances

As a licence holder you are under a duty not only to report certain migrant activities, but also any significant changes to your business. We look at each of these sponsor licence change of circumstances in turn:

Migrant activities

Any significant changes to a migrant worker’s employment or circumstances must be reported to the Home Office, including non-attendance, non-compliance or disappearance. In particular, you are under a duty to report the following:

  • Where a migrant worker does not turn up for their first day of work, including any reason given for their non-attendance
  • Where a migrant worker leaves their employment earlier than the date shown on their CoS, for example, through resignation, dismissal or where any registration required for working in the UK, through a governing body or otherwise, comes to an end
  • Where you stop sponsoring a migrant worker for any other reason, for example, you become aware that they have moved into an immigration route that does not need a sponsor
  • Where a migrant worker receives a promotion, a change in pay or a change in their core duties, or the location at which they work changes
  • Where a migrant worker is absent from work without permission for more than 10 consecutive days
  • Where a migrant worker is absent from work without pay for 4 weeks or more where this is not covered by the exceptions permitted in the sponsor guidance
  • Where you have information that suggests that a migrant worker is breaching the conditions of their leave.

Changes to your business

In addition to reporting certain migrant activities, or any change in their circumstances, you must also report to the Home Office any significant changes in the circumstances of your business. This can include any of the following:

  • If you sell all or part of your business
  • If you stop trading or become insolvent
  • If you substantially change the nature of your business
  • If you are involved in a merger or take-over

Additionally, you must notify the Home Office of any organisational changes, for example, if you are changing the name and/or address of your business, if there are any changes in the size or structure of the business, or if you are making changes to the key personnel responsible for managing your sponsor licence.

You will also need to tell the Home Office if you have been convicted of a relevant criminal offence, such as fraud or money laundering, even though this could have an adverse effect on your sponsor licence, including its potential revocation. In other cases, certain changes such as a complete takeover may result in the need for a new sponsor licence to be applied for.

Nonetheless, as a sponsor licence holder, you are still legally obliged to report any sponsor licence change of circumstances, or risk action being taken against you by the Home Office in any event for your failure to do so.


Procedure to report changes

In the majority of cases, to register any sponsor licence change of circumstances, a report will need to be submitted within the SMS by a Level 1 user. This is the person responsible for the day-to-day management of the sponsor licence using the online portal.

Certain changes will be automatically updated within the SMS, whereas others can take up to 16-18 weeks to be processed.

In specific instances, however, you may not be permitted to use the SMS to report or request a change, for example, to appoint a new Level 1 user or to surrender your licence. Instead, you will need to complete a “change of circumstances” form.

If you are looking to register a change with a faster response, you can use the priority service at a cost of £200. From 6 April 2020, the priority change of circumstances service for Tier 2 and 5 sponsors has been updated and changed from a telephone service to an email service. The telephone line is no longer in use. The email must include a completed priority service request form.  

A maximum of 60 priority service requests will be accepted each day. If the service is fully subscribed, the user will receive an email response notifying to apply on the following working day.  If the request is eligible, the user will receive an email containing a link to make payment. Payment must be made within 72 hours.


Timeframes to report changes

There are varying different timescales involved when reporting any changes, depending on the nature of the sponsor licence change of circumstances that you are seeking to report.

By way of example, if a migrant worker is absent from work for more than 10 consecutive working days without permission, you must report this within 10 working days of the 10th day of absence. Many other changes to a sponsored worker’s circumstances must also be reported to the Home Office within 10 working days.

If, on the other hand, you are reporting a change in circumstances to your business, such as selling all or part of your business, or being involved in a merger or take-over, you must generally report this within 20 working days.


Failure to report

As a licensed sponsor, you are expected to play your part in ensuring that the immigration system is not abused, not least in identifying at an early stage any patterns of migrant behaviour that may give cause for concern.

As such, in the event that you fail to notify the Home Office of any sponsor licence change of circumstances, both in relation to a migrant worker or your business, or you otherwise fail to comply with any of your sponsor duties, the Home Office has a number of measures that it can implement to penalise incompetent and/or dishonest licence holders.

These measures can include a limit placed on the number of CoS you can assign, or unused CoS being withdrawn. It can also lead to your sponsor licence being downgraded, suspended or revoked.

In circumstances where the Home Office have reason to believe that you have breached your sponsorship duties, it will first consider the nature and extent of the suspected breach.

Where relatively minor, and you are willing and able to correct the breach, typically your licence will be downgraded from an A to a B-rating and an action plan will be issued setting out the steps you must take to retain your licence.

However, where there is a serious breach indicating a significant or systematic failing such that you pose a serious threat to immigration control and/or you no longer meet the eligibility or suitability requirements for holding a licence, the Home Office is more likely to suspend your licence and investigate the matter further. It may even revoke your licence altogether without prior suspension.

Your licence will also be revoked if you fail to comply with any action plan designed to reinstate your licence rating.

Needless to say, if your sponsor licence is revoked, this can have a hugely detrimental impact on your business, not least if you are heavily reliant upon employing skilled migrant workers, either due to shortages of skilled workers in the domestic labour market or otherwise.

Having revoked your sponsor licence, the Home Office will also curtail the leave of any migrant workers who are currently employed by you.


Appealing enforcement action

In the event that your sponsor licence is revoked in consequence of you failing to report any sponsor licence change of circumstances, you will have no right of appeal. That said, you may be able to argue that any decision reached by the Home Office was either unlawful, unreasonable and/or procedurally improper. This is known as seeking a judicial review.

That said, judicial review is a process by which a court reviews the lawfulness of a public body’s decision, examining the way in which the conclusion was reached, rather than evaluating the merits of the decision itself. As such, this can be difficult to prove, not least because you would have to demonstrate to the court that the decision is one that no reasonable body could have come to.

Having had your sponsor licence revoked, although there is no right of appeal, you will be allowed to re-apply. That said, this does not necessarily mean that your application will be successful, and you will not be allowed to submit you fresh application until the end of the appropriate cooling-off period.

The cooling-off period is usually 12 months from the date you were notified by the Home Office of the revocation. If you do make an application before this period has passed, the Home Office will refuse this.

If you submit an application after the cooling-off period, it will be treated in the same way as any other application, requiring you to pay the relevant fee and submit the necessary documentation in support. You should, however, address any reasons why your previous licence was revoked before you re-apply.


Need assistance?

One of your main responsibilities as a sponsor licence holder is to monitor the immigration status of any migrant workers. As such, you must have in place sufficient HR systems that enable you to do this, from tracking and recording employees’ attendance to reporting to the Home Office if there is a problem, for example, where a migrant employee stops coming to work.

As part of this process you should keep copies of relevant documents for each employee, including passport and information relating to right-to-work checks, ie; to ensure that a worker is entitled to be in the UK and to undertake the work in question. You must also keep all employee contact details up-to-date.

In the event that you don’t have adequate HR systems in place and the Home Office decide to carry out a compliance review, unannounced or otherwise, you run the risk of action being taken against you on the basis that you are not deemed capable of carrying out your sponsorship duties.

It is therefore imperative that you ensure that your HR systems will enable you to comply with all of your duties and obligations as a sponsor licence holder, not least in monitoring and reporting migrant activities.

You must also ensure that your key personnel, ie; those responsible for using the SMS on a day-to-day basis, are not only trustworthy and capable, but kept up-to-date with any relevant organisational changes that may need to be reported at relatively short notice.

DavidsonMorris’s specialist business immigration lawyers work with UK employers on all aspects of the UK sponsor licence, from the initial application, dealing with refusals, ongoing management of the licence once issued and with the renewal application after four years. We can also support with Home Office compliance penalties such as suspensions and revocations. With our compliance audit service you can help ensure your organisation stays ‘match ready’ in the event of a Home Office compliance visit.

If you have a question or need help with a sponsor licence application, contact us.

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