Legal & regulatory: Comply – or lose your sponsorship licence

Joanna Hunt, partner and head of immigration, DAC Beachcroft

Joanna Hunt, partner and head of immigration at law firm DAC Beachcroft has a warning for care homes about sponsor licence compliance

With the care industry becoming increasingly dependent on sponsored workers to fill skill shortages, two recent High Court decisions make for sobering reading.

Both cases involve care homes targeted for compliance visits by the Home Office and resulted in sponsor licences being revoked for failure to meet duties as a sponsor licence holder.

In the eyes of the Home Office, sponsorship is ‘a privilege not a right’ and it expects licence holders to adhere to certain record-keeping and reporting duties. These include keeping accurate records of right-to-work documents and contact details, ensuring workers have the requisite skills to do the job they are sponsored to do – and reporting if they leave a job early.

However, failure to comply with these duties can have serious consequences. The Home Office can revoke a licence, meaning all sponsored workers would have their visas curtailed and a company could be prevented from applying for another licence for 12 months. For a care home which relies on sponsored workers to fill staffing shortages, this could be very serious indeed.

Both cases involved care homes who challenged decisions by the Home Office to revoke their sponsor licence. In Prestwick Care Ltd & Ors v Secretary of State for the Home Department, the Home Office found a significant number of breaches, including evidence workers were not carrying out the role indicated in their visa application, workers being incorrectly told they were not eligible for sick pay, and evidence that the care home was trying to claw back visa fees from workers improperly. 

The care home argued that the court should consider the adverse impact of the loss of the licence on their employees and the wider community, but were unsuccessful. The court blamed their ‘lack of rigour’ and found that the Home Office was entitled to revoke the licence as the care home ‘could not be trusted to comply with its duties as a sponsor’.

More positively, in Supporting Care Ltd, R (On the application of) v Secretary of State for the Home Department, the claim was successful but only as one breach remained at issue by the time the case came to court. The court found that the revocation of the licence was disproportionate in light of the negative impact it had on the business and clients.

With the introduction of the health and care visa, the care industry has become a major user of the sponsorship system. These cases illustrate how serious the ramifications can be if a care home fails to comply with its sponsorship duties. The Home Office is clearly willing to pursue sponsors who commit even isolated breaches and use its extensive power to suspend and revoke a licence. The courts may offer some redress for care homes which have made minor errors, but are unlikely to provide much help to sponsors who have endemic compliance issues.

The sponsorship system can offer a significant opportunity for the care industry in addressing staffing challenges, and the slight reduction in vacancies in the sector has been attributed to the increase in overseas care workers who can now work in the UK. Care providers, however, need to understand the obligations that are placed on it when it comes to sponsorship and put appropriate governance processes in place to ensure compliance obligations are met.

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