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Sponsor Licence Revoked?

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If an organisation with a sponsor licence does not satisfy the various compliance duties as required under the Immigration Rules, the Home Office has powers to take enforcement action. Where serious compliance breaches are alleged, the Home Office may send a notification letter stating that the organisation’s sponsor licence has been revoked or suspended pending further investigation. This can have far-reaching consequences for both the employer and their sponsored workers.

 

What does a sponsor licence revoked mean?

A revoked sponsor licence will see your company lose its permission to recruit, employ and sponsor migrant workers. The impact of losing a sponsorship licence would for most companies be business-critical. With the resident labour market falling short in skilled talent across many sectors, sponsoring skilled migrant workers has for many organisations become essential in remaining competitive and even operational.

Any sponsored workers that you employ in the UK under the licence will have to leave their job at your company, and leave the UK within 60 days or by their visa expiry date if sooner, unless they can make a new, successful visa application to stay in the UK within the timeframe.

 

Why are sponsor licences revoked?

Sponsor licence-holders are faced with a complex list of conditions and rules with which they must comply for the duration of their licence’s four-year validity. Failure to do so may result in the Home Office suspending or even revoking the sponsor licence.

Revocation of the sponsor licence equates to its immediate cancellation. Suspension of the sponsor licence is a temporary measure put in place while the Home Office makes further enquiries of third parties, such as HMRC, and the employer itself. The reinstatement of the sponsor licence, its downgrading or its revocation will be decided once this enquiry process has been completed.

In addition to the revocation or suspension of the sponsor licence, the employer may incur fines for its actions or inactions. The amount of these will vary depending on the situation, but the employment of illegal workers can generate fines of up to £20,000 per worker.

 

Have you received a sponsor licence revocation letter?

If you have received notification from UKVI that your sponsor licence is being revoked, you will have a limited timeframe in which to take action and respond.  Your next steps will be critical in influencing the outcome of the Home Office enforcement action.

While it is not possible to appeal a revocation decision, judicial review of the decision may be an option, but needs careful consideration. Judicial review is the process whereby the courts consider whether the decisions made by state bodies have been fair, lawful and correct. If the court considers that the decision was not fair, lawful or correct, it may issue a quashing order, which essentially allows the court to remake the decision. Judicial review is an expensive process and there is no guarantee that the sponsor licence will be reinstated at the end of it.

The alternative option is for the employer to wait until the ‘cooling-off period’ has ended and then reapply for a sponsor licence. This is essentially the same as making an initial sponsor licence application although it will be necessary for the applicant to deal with the reasons for the previous revocation.

In any event, organisations should follow these steps to help determine how they should respond to the revocation notice letter.

 

Step 1: Acknowledge receipt  

Your first step should be to acknowledge receipt of the letter.

Proactively engaging with the Home Office throughout the revocation process does, in our experience, work in your favour, and can help to demonstrate a willingness to cooperate and resolve issues. Remain responsive and cooperative throughout the process.

 

Step 2: Understand the allegations

The next step is to understand the grounds for revocation. The letter of notification will detail the basis on which UKVI has arrived at its decision to proceed to revocation stage.

A sponsor licence can be suspended or revoked for various reasons, usually because of the employer’s failure to comply with the licence-holders’ rules and regulations. Certain actions or inactions will result in compulsory suspension or revocation, while others are at the Home Office’s discretion.

Immediate revocation may occur where there are allegations of serious breaches of the UK immigration rules and the employer’s prevention of illegal working duties, including:

  • Submitting false information on the sponsor licence application
  • Illegal employment of workers
  • Failure to provide documentation requested by the Home Office
  • A Certificate of Sponsorship being used incorrectly or completed incorrectly
  • Consistently poor record-keeping

A lesser penalty of a licence suspension may be imposed, for example, where the employer has:

  • Not paid a sponsored worker an appropriate salary per the visa requirements
  • Made cash payments to a sponsored worker
  • Not cooperated with UK Visas and Immigration on an inspection visit

 

The grounds stated in the notification letter should help to shape your response.

For example, if you can identify that UKVI’s grounds are based on an error of fact, you will need to compile sufficient evidence to support correction of that factual error.

 

Step 3: Devise your response strategy 

Gather together all relevant personnel involved in the management of the sponsor licence to discuss and confirm the position of the company in light of the alleged breach(es). Discuss the grounds for revocation, the desired outcome and address any compliance issues.

Depending on the alleged breach(es) and the wider circumstances of your case, it may be possible to seek a temporary downgrading of your licence which would permit existing sponsored workers to continue to be employed by you in the UK.

In some cases, the breach may be so severe that the Home Office has acted reasonably.

In other cases, it may be appropriate to build a case to demonstrate that the revoked sponsor licence would have wider implications rendering the revocation a disproportionate measure. Consider the revocation in context. In addition to providing documentary evidence, your response should where possible demonstrate the wider economic impact of a revoked sponsor licence, such as redundancies beyond the affected sponsored workers. For one client, we successfully illustrated in our response to the Home Office that loss of the sponsor licence would result in the company losing a substantial business contract – the result of which would be redundancies affecting more than the sponsored workers.

You will need to act fast to agree the response to UKVI, assigning responsibilities for action points and remedial measures. Timescales and ownership must be clearly communicated internally and to the Home Office, in order to convince that issues are being addressed effectively.

 

Step 4: Gather evidence  

Cooperation, accuracy and speed are key in this situation and it is important that an employer discusses the position and agrees a strategy with its relevant staff members and legal advisors as a matter of urgency.

Sourcing relevant and accurate evidence to support your response will be critical. Depending on the size and make-up of your company, this may be a challenging exercise, where documents are owned and maintained within different functions and sites e.g. payroll information. The Home Office will not be interested in internal barriers or difficulties. Indeed these may exacerbate the issues around non-compliance with sponsor licence duties.

 

Step 5: Remedy the compliance breaches

If the Home Office has raised compliance issues in the revocation notice, these will need to be addressed and rectified as a priority. All measures planned and taken to improve compliance should be documented and presented as part of your response to the Home Office.

In the event the revocation is withdrawn, you should still expect to remain under Home Office scrutiny for the foreseeable future. As with any sponsor licence holder, the UKVI reserves a right to undertake a compliance visit to request and inspect corporate documentation as deemed necessary. Expect to be higher up the priority list where there have been prior compliance issues.

 

Step 6: Await the decision 

The Home Office aims to give its decision no later than 20 working days after receiving the response, although there may be some delay if the matter is complicated or third parties, such as HMRC, are involved.

 

Impact of a revoked sponsor licence 

If your sponsor licence is revoked, you will not be allowed to recruit or employ non-UK resident workers under the sponsor licence, regardless of the visa category. Revocation results in the employer being taken off the register of sponsors. This means that the employer cannot sponsor new workers and can no longer continue to employ its current sponsored workers.

An employer which has had its sponsor licence revoked cannot reapply for another sponsor licence for a specified period (the ‘cooling off period’), which is 12 months from the date of revocation.

Revocation of a sponsor licence can have serious adverse repercussions for an employer’s business, which could suddenly lose a large proportion of its workforce. This is likely to affect productivity and possibly any competitive advantage that the business has. In addition, the employer’s reputation and the morale of employees are likely to suffer. The finances of the business could also be affected as a result of the imposition of fines on the employer by the Home Office.

 

Impact of a revoked sponsor licence on sponsored workers’ visas

A revoked licence means any sponsored workers employed at the time of revocation will have their leave to remain in the country curtailed. From the date of revocation, any such worker will have 60 calendar days to leave the UK, find sponsorship from an alternative employer or make a new visa application under a different visa category. If the worker is able to find alternative employment, they will need to submit a new visa application under their new employer’s sponsor licence.

In the event that the worker knew that their employer was in breach of the sponsor licence rules and duties, they will not be given a 60-day grace period to leave the country or make alternative arrangements and their leave to remain in the UK will be curtailed immediately.

Revocation of a sponsor licence will result in any pending visa applications under that sponsor licence being deemed invalid. Therefore, any sponsored workers in the process of applying for their visa, such as the Skilled Worker visa or ICT visa, will not be granted a visa if their employer (or potential employer) has its sponsor licence revoked during the application process. Such workers will not necessarily be informed of the revocation by the Home Office and will not have the 60-day grace period to leave the country or find alternative arrangements.

Any sponsored worker who is required to leave the country but does not do so within the 60-day period may be detained and removed from the country. Any application to return following this will be unsuccessful for a period of ten years.

 

Need help with a revoked sponsor licence?

Revocation can have serious consequences for the business and for current sponsored workers and needs to be dealt with as soon as possible.

At the earliest point, it is recommended that you seek legal advice on how you approach the revocation, by for example remedying breaches in compliance and negotiating a licence downgrading, and how to respond most effectively to the Home Office.

DavidsonMorris’ immigration law specialists have substantial experience in helping companies facing a revoked sponsor licence. We can advise on the merits and strengths of your case, and advise on the most appropriate course of action.

We can help you understand the grounds of the alleged breach, and advise on a strategy to respond to UKVI within the timeframes, and support you in addressing and remedying any areas of non-compliance to ensure you retain your licence.

If your sponsor licence is at risk of revocation or you have been served notice that is has been revoked, speak to one of our business immigration law experts today.

 

Sponsor licence revoked: FAQs

Why was my sponsor licence revoked?

The Home Office will stipulate in its letter of revocation the grounds for the penalty. These typically relate to allegations of non-compliance with immigration duties or mismanagement of the licence and the visa workers employed under it.

Can I appeal a sponsor licence revocation?

It is not possible to appeal a revoked sponsor licence. Your options will generally be to pursue either a Judicial Review or to make an application for a new licence after a specified cooling off period.

How does a revoked sponsor licence affect visa workers?

If an employer loses their sponsor licence, their migrant workers’ visas will be cut short, that is, curtailed. When an employer loses their sponsor licence through revocation, their migrant workers’ visas will also be affected. The certificate of sponsorship is effectively cancelled, removing the workers’ permission to be employed lawfully by the employer. Their visa is then curtailed, and the worker has 60 days to apply for a new visa or to leave the UK.

If the sponsor licence has been revoked, will the company remain on the register of sponsors?

No, a revoked licence will see the company removed from the register of sponsors. Only if the licence is reinstated with the company be placed back on the register.

How long do you have to respond to a Home Office revocation notice?

You will usually have 20 days to respond to the revocation notification letter from the Home Office

How can DavidsonMorris help?

We are experienced UK immigration lawyers with specific expertise in helping employers dealing with a revoked sponsor licence. We will assess the Home Office’s allegations and advise on a response strategy aimed at reversing the decision.

Last updated: 19th January 2021

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