Balancing Compliance and Fairness: Sponsorship Challenges in the Care Sector

Recent Judicial Review challenges have highlighted the importance of sponsor compliance in the care sector.

The UK sponsorship immigration system is stringent, and sponsor licence revocation can have severe consequences for businesses, especially care homes which rely heavily on overseas workers. Judicial Review (JR) challenges have become a critical avenue for sponsors to contest such decisions.

R (New Hope Care Ltd) v Secretary of State for the Home Department [2024] EWHC 1270 (Admin)

This case involved a care home operator whose sponsor licence was revoked.

The Home Office conducted a compliance visit at the operator. The Authorising Officer, the person ultimately responsible for the licence, was not present as they were abroad. A second visit was scheduled but the Authorising Officer was again unavailable as they had been delayed overseas.

No further exchange between the operator and the Home Office took place until a decision letter arrived, revoking the licence. The reason for revocation were:

• The Authorising Officer was not based in the UK;
• The operator had issued an excessive number of certificates of sponsorship. They felt that the 156 certificates issued within an 8-month period represented a threat to immigration control;
• The operator had issued zero-hour contracts to some sponsored workers, ultimately resulting in them being paid less than stated on their certificate of sponsorship and in some cases, less than the national minimum wage;
• Some sponsored workers had started more than 28 days from the start date on their certificates of sponsorship; and
• There was no evidence of right to work checks being conducted on a number of staff, a legal obligation.

The operator challenged the decision on five grounds but only one was successful.  The High Court ruled in favour of New Hope Care Ltd on the grounds of procedural unfairness. The Home Office had suspended the licence without providing reasons and later revoked it without giving the sponsor an opportunity to respond to the allegations. The Home Office had failed to follow the process as set out in their guidance. 

The allegations from the Home Office are quite serious and so it’s anticipated that they will remake the decision to revoke the licence, presumably ensuring a fair process is followed this time.

This judgement highlights some of the key compliance areas which the Home Office are examining when undertaking enforcement action.

Supporting Care Ltd, R (On the Application Of) v Secretary of State for the Home Department [2024] EWHC 68 (Admin).

This care home operator sponsored 68 sponsored workers. The Home Office decided to revoke their licence after a compliance audit revealed six compliance breaches. However, following further representations, only one breach remained in question: a sponsored senior care worker was working in a role which did not fully match the role as described in the job description set out in her certificate of sponsorship. She was performing six out of eight listed duties, but Home Office policy mandates licence revocation when a role doesn’t align with the description in the certificate of sponsorship.

The operator argued that Home Office policy guidance is worded in a way to imply that discretion can be applied in mandatory revocation scenarios. They also argued that public law principles require discretion to be properly exercised and that revocation of a licence should only be done when it’s reasonable and proportionate to do so.

These arguments were sufficient to convince the High Court, who overturned the licence revocation decision, stating that the Home Office failed to conduct an adequately reasoned global assessment of all relevant considerations before revoking the licence. They effectively stated that the one small discrepancy in the job title should not impact a workforce of 68 workers.

Despite this ruling, sponsor licence holders would still be well advised to ensure the job description on the certificate of sponsorship aligns with the role a sponsored worker is undertaking, and that any changes are reported to the Home Office.

Prestwick Care Ltd & Ors v Secretary of State for the Home Department [2023] EWHC 3193 (Admin)

Unlike the previous cases, the High Court upheld the licence revocation decision.

In this case the care home operator sponsored 219 workers. Following a compliance visit, the Home Office discovered numerous compliance breaches including:

• Finding that several workers were not performing the duties as stated in their certificate of sponsorship. As noted above, this is a breach which attracts a mandatory revocation of the licence.
• Paying staff a reduced salary to the one quoted on the certificate of sponsorship. Reduction of salaries are permitted as long as the salary meets the requirements of the Immigration Rules and is reported to the Home Office. Failure to report this attracts a mandatory revocation of the licence.
• Failure to comply with UK employment law relating to sick pay and national minimum wage. Sponsors must adhere to all UK law and any non-compliance will usually result in a revocation of the licence.
• Recouping the immigration skills charge from the sponsored workers. This is a fee which is paid when the certificate of sponsorship is assigned. It’s a fee that must be paid by the sponsor and Home Office guidance is very clear that sponsors must not pass the cost of the immigration skills charge to the worker.
• Failure to properly monitor employees. The care operator was not properly conducting right to work checks and monitoring their worker’s visa expiry dates. Whilst none of the worker’s visas had expired, the Home Office were satisfied the company was a risk to immigration control.
• Poor record keeping.  All sponsors are required to keep certain documents for sponsored workers, such as contact details. Evidence of poor record keeping is a breach of sponsor duties.

The operator argued that the Home Office should consider the wider impact on employees and the local community, but the court decided that these factors were not relevant where the revocation was mandatory. The difference in this case to the Supporting Care Ltd case is that Prestwick Care had numerous compliance breaches involving a large number of staff. Supporting Care Ltd only had one breach for one member of staff. Ultimately the breaches taken as a whole were so severe the Court agreed with the Home Office and held that the operator could not be trusted to comply with their duties as a sponsor.

For all sponsor licence holders, compliance with sponsor duties is crucial. These cases highlight the importance of adhering to these duties. The Home Office views sponsorship as "a privilege, not a right," and it won't hesitate to take action for even isolated breaches.

Loss of a licence will result in the cancellation of all visas held by migrants who are sponsored by the business. This can have significant commercial and reputational impacts on the business.

Therefore, care home operators should diligently meet reporting, record-keeping, and general compliance obligations to maintain their sponsor licenses. If ever there is a doubt on whether they are in compliance, they should seek advice at the earliest opportunity.