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England and Wales High Court (Administrative Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Administrative Court) Decisions >> Raj And Knoll Ltd, R (On the Application Of) v Secretary of State for the Home Department [2015] EWHC 1329 (Admin) (14 May 2015)
URL: http://www.bailii.org/ew/cases/EWHC/Admin/2015/1329.html
Cite as: [2015] EWHC 1329 (Admin)
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QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Strand, London, WC2A 2LL |
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B e f o r e :
____________________
| THE QUEEN on the application of RAJ AND KNOLL LIMITED |
Claimant |
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| - and - |
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| SECRETARY OF STATE FOR THE HOME DEPARTMENT |
Defendant |
____________________
Ashley Serr (instructed by The Treasury Solicitor) for the Defendant
Hearing dates: 11th & 12th March 2015
____________________
Crown Copyright ©
- This is one of the first cases to come before the courts in respect of the 'Tier 2' Points-Based System operated by the UK Visas & Immigration section of the Home Department licence scheme which covers the employment sector. The 'Tier 2' Points-Based System is a scheme operated on behalf of the Secretary of State for the Home Department ("SSHD") whereby skilled non-EEA workers are allowed leave to remain in the UK to fill particular jobs which cannot be filled by settled EEA workers.
- The relevant Guidance and principles are similar to those relating to the 'Tier 4' Points-Based System licence scheme, which covers the education sector and which has been the subject of extensive judicial consideration.
- By these judicial review proceedings, the Claimant challenges the Secretary of State's decisions of 16th June 2014 and 4th July 2014 to revoke its 'Tier 2' sponsor licence and to maintain that revocation. The effect of the revocation was that the Claimant was no longer able to employ non-EEA migrants.
- The Claimant runs three nursing homes in Deal in Kent called "Ami Lodge", "The Knoll" and "Ami Court". The Claimant employs 65 people, of whom 11 are 'sponsored' workers under a 'Tier 2' licence issued by the Secretary of State. The 11 sponsored workers have 6 dependents.
- In 2009, the Claimant applied for 'Tier 2' status. On 20th November 2009 UKBA conducted a Sponsor Management Unit ("SMU") Pre-Licence Visit of the Claimant. The Claimant was subsequently granted a 'Tier 2' licence. This permitted the Claimant to issue Certificates of Sponsorship ("CoS") to non-EEA migrants whom it wished to employ in its care home business, provided certain conditions were fulfilled. On 5th February 2010, the Claimant issued its first CoS. Thereafter, UKBA conducted SMU Post-Registration Compliance Visits. These visits were intermittent and unannounced in accordance with its normal procedures. Visits took place on 13th November 2010 and on 1st February 2012. By 2013, the Claimant employed 39 'Tier 2' migrants as workers in its care homes.
- On the 30th September 2013, UKBA carried out a Licence Renewal Visit. The SSHD's compliance officers called at the Claimant's registered address, namely "79 Hythe Road, TN24 8PH". This turned out to be a news agents trading as "Raj". The shopkeeper told the compliance officers that the shop used to be owned by Mrs Amita Patel and her husband, who also owned other news agents in Deal, but they had sold these premises 'some time ago'. UKBA compliance officers then went to see and interview the Claimant's nominated Authorising Officer, Mrs Amita Patel. She admitted that, although the Claimant's CoS showed "79 Hythe Road, TN24 8PH" as the Claimant's working address, the Claimant had in fact sold these premises in 2013 and that address was never the place of work for the sponsor's 72 'Tier 2' migrants. In the light of this and other unsatisfactory findings during this visit, the SMU Compliance Report Form recommended suspension/ revocation of the Claimant's licence.
- On 18th March 2014, UKBA carried out a further unannounced inspection of the Claimant which finally led to a suspension letter sent by the SSHD to the Claimant.
- On 15th May 2014, the SSHD wrote to the Claimant suspending the Claimant's licence. The SSHD's letter listed the issues which had been indentified during the inspection visit on 18th March 2014 and the reasons for the suspension. These issues were five-fold:
- The SSHD's suspension letter stated that these issues constituted a failure by the Claimant to comply with its sponsor duties (paragraph 10) and concluded:
- On 30th May 2014, the Claimant made submissions to the Secretary of State and invited her to reinstate its licence.
- On 16th June 2014 the SSHD revoked the Claimant's licence altogether. The revocation letter stated inter alia as follows:
- On 17th June and 27th June 2014, the Claimant made further submissions to the Secretary of State inviting her to reconsider her decision to revoke on a number of grounds. The Secretary of State replied on 23rd June and 4th July 2014 (respectively) rejecting the Claimant's grounds and stating that she could find no reason to overturn the original decision. The Secretary of State's letter of 4th July 2014 concluded:
- Whilst there are some differences between the 'Tier 2' and 'Tier 4' schemes (notably, the Resident Labour Market Test ("RLMT") is unique to 'Tier 2'), the essence of the schemes and the legislative policy framework is similar.
- The genesis of the Points-Based System and the legislative and policy framework in relation to the 'Tier 4' system has been extensively rehearsed in previous cases and there is no need to repeat it here (see especially R (New College Ltd) v. Secretary of State for Home Department [2013] UKSC 51 and [2013] EWHC 31 (Admin) and R (Global Vision College Limited) v Secretary of State for the Home Department (2014) EWCA Civ 659 per Beatson LJ).
- The 'Tier 2' route for entry and leave as a non-EEA worker came into effect in 2009 under the 'Points-Based System' ("PBS"), contained within the Immigration Rules. This was introduced by an amendment to Statement of Changes in Immigration Rules, HC 395 by HC 1113 which replaced the previous 'work permit' scheme. The aim of the new scheme as set out in the Explanatory Notes to HC 1113 was to enable UK employers to recruit individuals from outside the EEA "to fill a particular skilled job that cannot be filled by a British or EEA worker".
- Central to the 'Tier 2' scheme is the role of the UK sponsor/employer. As a prerequisite to obtaining leave to enter or remain under the PBS 'Tier 2' route, a non-EEA worker must obtain a Certificate of Sponsorship ("CoS") from a licensed sponsor. Employers can only issue a CoS if they are a licensed sponsor, i.e. they have been approved and placed by the SSHD upon the Register of Licensed Sponsors.
- A CoS confirms that the non-EEA worker in question has been offered employment within an eligible category and includes a summary job description and the relevant 'Standard Occupational Classification' ("SOC") Code for the particular job contained in the applicable UKBA's Codes of Practice for Skilled Workers. The CoS is held electronically on the 'Sponsorship Management System ("SMS") and accessed electronically.
- Guidance on the PBS system in relation to the Tier 2 route is provided by the UKBA in "Guidance For Sponsors: Tier 2 and 5 of the points-based system" and took effect on 13th December 2012.
- The Guidance for the 'Tier 2' and 5 and 'Tier 4' schemes is similar and much of the language is identical. The Guidance is very lengthy (167 pages). The following passages are germane to this case:
- a promotion or change in job title, or core duties, other than those which need a change of employment application; For more information, please see change of employment;
- a change of salary from the level stated on the CoS, other than changes due to annual increments or bonuses;
- a change of salary from that stated on the CoS due to maternity, paternity or adoption leave, or a period of long-term sick leave lasting one month or longer;
- the location they are employed at changes (including where a sports player moves on loan).
- The principles applicable to 'Tier 2' and 'Tier 4' Points-Based Systems are similar: the watchword for both is 'trust'.
- The following common principles can be derived from the recent case law:
- Given the plethora of challenges in this field, it is worth re-iterating the words of caution of Lord Brown-Wilkinson in Reg. v. Bishop Challoner School, Ex p. Choudhury [1992] 2 AC 182, 197E regarding the scope of judicial review:
- Counsel for the Claimant, Mr Malik, made three main submissions on behalf of his clients. First, the SSHD misconstrued sub-paragraph (ac) of Annex 5 of the Guidance and erred in law in assuming that this case involved mandatory revocation. Second, the SSHD's view that the Claimant had breached its sponsorship duties under sub-paragraphs (g) and (j) of Annex 6 of the Guidance was irrational. Third, the SSHD failed to appreciate that she had discretion to take action short of revocation and failed to consider the alternatives of suspending or downgrading the Claimant's licence.
- Counsel for the SSHD, Mr Serr, submitted that the Claimant's arguments relied on an unduly narrow reading of the Guidance and the SSHD's letter of suspension of 15th May 2014.
- Mr Malik argued that the SSHD erred in relying on sub-paragraph (ac) of Annex 5 in her termination letter because sub-paragraph (ac) had no application in the case.
- Annex 5 to the Guidance is headed "Circumstances in which we will revoke your licence". Annex 5 lists 30 circumstances in which mandatory revocation will occur, including under sub-paragraph (ac) as follows:
- Mr Malik submitted that the Secretary of State's suspension letter of 15th May 2014 did not amount to a request by the Secretary of State to the Claimant "to send … documents or information" within sub-paragraph (ac). He relied on the terms of the concluding paragraph of the letter and submitted that the letter merely gave an "opportunity" to the Claimant "to make representations, including submitting evidence in response to the issues raised in this letter" (see paragraph 12 of the suspension letter) and did not fall within sub-paragraph (ac). He submitted that there were no words of 'request' and there was no reference to "documents or information".
- I reject Mr Malik's submission. It is important to read such decision letters fairly and with common sense. They are generally written by busy non-lawyers, in administrative offices, who are seeking to impart the import of a decision, and the reasons for the decision, in a reasonably succinct, informative and readable manner. They are not a statute or to be read in a vacuum.
- They are also to be read in their proper context. The relevant context here included the Guidance and the inspection which had led up to the suspension letter. The reference to "documents or information" in Annex 5 sub-paragraph (ac) is to be read in conjunction with Part 15 and Part 16 of the Guidance and Appendix D, in particular 15.2, 16.1 and 16.2 which state:
- In my judgment, the letter of 15th May 2014 explained the reasons for suspension in reasonably clear and succinct manner and its meaning is pellucid. It does not matter that the precise words of sub-paragraph (ac) were not used. The sense of the letter read as a whole is clear. The letter was primarily directed to listing the RLMT documentary failures by the Claimant in apparent breach of its 'Tier 2' sponsor duties. These failures were discovered during the unannounced visit by compliance officers on 18th March 2014 (to which the SMU Compliance Report Form dated 21st March 2014 relates). The letter expressly required the Claimant, within 20 days, to address these "issues" by making representations - which expressly included submitting "evidence", i.e. producing missing RLMT documents - with the clear warning that unless the Claimant complied with this request the licence would be revoked.
- The effect of the letter, meanwhile, was to suspend the Claimant's licence. The express reason for the suspension was the failure inter alia to provide requisite RLMT documents. As stated above, the letter made it quite clear that, unless adequate explanations and evidence addressing the issues was forthcoming within the requisite timescale, the licence would be revoked. The fact is that the Claimant failed to comply. Thus, revocation on 16th June 2014 on inter alia this ground (ac) was perfectly justified.
- Mr Malik submitted, in the alternative, that the Claimant provided all the evidence which the Secretary of State sought and pointed to the Claimants response dated 30th May 2014 which enclosed copies of advertisements and various other documents. However, the SSHD determined that the Claimant's response was inadequate and that the Claimant had failed adequately to address the issues raised in the suspension letter of 15th May 2014. The SSHD's termination letter dated 16th June 2014 explained in clear terms why the Claimant's response was deficient and why, therefore, the presaged revocation of licence would go ahead.
- For the reasons set out below, I am satisfied that that the SSHD was justified in this conclusion.
- There were three particular aspects to the Claimant's non-compliance with the Guidance and the Claimant's failure to respond sufficiently to the SSHD's suspension letter. The first was the Claimant's failure to retain evidence of RMLT in accordance with Annex D of the Guidance, in particular (i) evidence of requisite advertisements having being placed with Job Centre Plus and Monster.com; and (ii) invoices and contract(s) to show that the advertisements placed by the recruitment agency, Vostek, were placed on behalf of the Claimants. The SSHD had expressly raised this issue in the suspension letter (see above) but the Claimant failed to produce adequate documentation to address it. For these reasons, the SSHD said that she was not satisfied that the Claimant had adequately demonstrated compliance with RLMT and cited sub-paragraph (ac). In my judgment, the SSHD was entitled to do so and revoke on this basis alone. The evidence from Mr Joyas John of Vostek seeking to justify the processes which they had used was unimpressive.
- The second issue which had not been adequately addressed by the Claimant was its failure to report a change of its business address and the location of its employees in breach of paragraph 12.6 of the Guidance. As noted above, the Claimant's registered address had originally been given and been recorded on the Sponsorship Management System ("SMS") as "79 Hythe Road" and all the CoS assigned by the Claimant showed "79 Hythe Road" as the working address. However, as noted above, Mrs Patel admitted to the compliance officer that the Claimant had never conducted its care business at that address and, anyway, the premises had been sold in 2013.
- In its termination letter dated 16th June 2014, the SCU said that that Claimant was in breach of the Guidance in failing to notify the SCU of (i) the change of its registered Head Office address and (ii) the change of working addresses of the Claimant's sponsored employees. The SSHD said that it was not satisfied that the Claimant had adequately addressed the reason for not reporting the correct working address of its sponsored workers and indicated that, in these circumstances, the SSHD was entitled to revoke the Claimant's licence under sub-paragraphs (g) and (j) of Annex 6 of the Guidance. Annex 6, sub-paragraphs (g) and (j) provide:
- Mr Malik submitted that any revocation on this basis was 'irrational' because (i) the Claimant had attempted three times to change its registered HQ address but the SSHD had wrongly refused to accept the change; and (ii) the SMU had visited the Claimant on several occasions and was, or should have been, aware at all material times that the Claimant did not carry out its care home business at "79 Hythe Road, TN24 8PH".
- Both argument were hopeless and quickly demolished by Mr Serr. As regards the first point, Mr Serr demonstrated that (a) the Claimant's attempts to change its registered address commenced on 30th September 2013, i.e. the day of the SMU's compliance visit during which it was discovered that there was simply a news agent at "79 Hythe Road, TN24 8PBH" owned by the third party; (b) the Claimant did not use the correct procedures when seeking to correct its registered address which was not, in fact, changed on the SMS until 5th December 2013; (c) in the meantime, the Claimant nevertheless continued to issue CoS falsely claiming the migrants' working address and key contract address as "79 Hythe Road, TN24 8PH"; and (d) all material times, the Claimant had failed to comply with its obligations under the Guidance to ensure that it entered the correct addresses.
- As regards the second point, Mr Serr demonstrated that (a) SMU compliance visits were in no way intended to excuse licence holders from their recurrent obligations under the Guidance to maintain the correct address information; (b) the SMU visits were intermittent and the compliance officers did not in fact visit "79 Hythe Road, TN24 8PH" until 30th September 2013; (c) at no stage would it have been possible for the SMU to know which of the Claimant's 72 migrant workers were working at which of the Claimant's various addresses.
- I agree with Mr Serr that the SMU were entitled to regard these failures of the Claimant regarding the addresses as a matter for serious disquiet.
- Mr Malik's second argument was that the SSHD's view that the Claimant had breached its sponsorship duties under sub-paragraphs (g) and (j) of Annex 6 of the Guidance was irrational because either the SSHD was labouring under a misapprehension as to non-compliance or any non-compliance was de minimis and did not warrant revocation on discretionary grounds.
- In my judgment, Mr Malik's second argument is hopeless on both counts. The Claimant's non-compliance with the Guidance was manifest in a number of respects (see above). In any event, Paragraph 19.6 of the Guidance makes it clear that even where there are discretionary grounds for revocation of a licence, revocation can be expected in all but "exceptional circumstances". Revocation of the sponsor's licence is likely and to be expected for any infraction of the requirements imposed by the Guidance (per Hickinbottom J in R (Central College of London Limited) v Secretary of State for the Home Department (2012) EWHC 1273 para 42-44 and see McGowan J in London St Andrews College, supra, at para 31-32). Immediate revocation for these infractions was overwhelmingly to be expected. There were no relevant "exceptional circumstances" which the Claimant in this case could pray in aid. In any event, I accept the evidence of Elaine Lillico on behalf of the SSHD as to why the Claimant's failures clearly raised the 'suspicion index'.
- Mr Malik's third argument was the SSHD failed to appreciate that she had discretion to take action short of revocation and failed to consider the alternatives of suspending or downgrading the Claimant's licence. He submitted that there was no evidence that the SSHD had given any consideration to the criteria in paragraph 18 of the Guidance entitled "Process we will follow in deciding what (if any) action to take".
- There are three short answers to Mr Malik's third argument which was, in essence, a weak 'reasons' challenge. First, as Mr Malik accepted, there is no obligation on the SSHD to set out her process of thinking - the obligation on the decision maker in these circumstances is merely to explain and elucidate in reasonably clear and succinct terms the reasons for the decision. This is what the SSHD did. Second, there was no evidence or reason to suppose that the SSHD had not followed the process set out in paragraph 18 of the Guidance. However, in any event, third, given the litany and seriousness of the Claimant's various breaches of the Guidance (see above), immediate termination in accordance with Paragraph 19.6 of the Guidance (see above) was obvious and axiomatic.
- For the above reasons, there is no substance in any of the Claimant's arguments and its judicial review challenge to the SSHD's decision is dismissed. But for the fact that this case involved 'Tier 2', it is doubtful whether leave would have been given in the first place. The SSHD was fully entitled to revoke the Claimant's 'Tier 2' licence as she did. The Claimant's attitude to the Guidance was sloppy and cavalier.
- Finally, I suggest that heed is paid to the words of McGowan J in London St Andrews College v Secretary of State for the Home Department (2014) EWHC 4328 (Admin) [36]):
- The Claimant's claim for judicial review is dismissed.
- The order for interim relief is discharged and the Claimant's sponsorship licence therefore reverts to a state of revocation.
- The Claimant is to pay the Defendant's reasonable costs to be assessed by detailed assessment if not agreed.
See: Order at bottom of this judgment.
MR JUSTICE HADDON-CAVE:
Introduction
The Facts
UKBA visit on 30th September 2013
Suspension letter dated 15th May 2014
(1) A failure to retain the required evidence to confirm that an RLMT had been undertaken in accordance with the Guidance (paragraph 2).
(2) The fact that Mrs Patel had told the compliance officer that the Claimant did not retain any copies of qualifications, shortlists or interview records relating to the recruitment of sponsored workers (paragraphs 3-5).
(3) The fact that the Claimant did not provide any evidence of the right to work in the UK of a Mr Vija Chakkalakkal Joy and Home Office Records showed that he did not have the right to work or remain in the UK; and as a result the Claimant was employing Mr Joy when he had no valid leave to remain or work in the UK (paragraphs 6-7).
(4) The fact that the Claimant did not include a Mr Arthur Fortes on the spreadsheet used by the Claimant to monitor expiry dates (paragraph 8).
(5) The fact that all the CoS assigned by the Claimant showed "79 Hythe Road" as the working address but Mrs Patel admitted that the Claimant had never worked at that address and, anyway, that business had been sold in 2013.
"12. To give you the opportunity to explain the above before we begin the revocation action, we are allowing you 20 working days to make representations, including submitting evidence, in response to the issues raised in this letter. If you fail to make representations or to adequately address the issues within this time, your licence will be revoked and you will no longer be able to sponsor employees." (emphasis added)
Revocation letter – 16th June 2014
"Dear Mrs Patel,
REMOVAL FROM THE TIER 2 REGISTER OF LICENSED SPONSORS:
RAJ AND KNOLL LTD
1. I refer to previous correspondence of 15 May informing you that your sponsor license had been suspended as a result of issues identified during a visit to your premises on 18 March.
2. You were given 20 working days to make representation against this decision, which you responded to on 30 May.
3. Having considered all the available evidence along with the accompanying documents you have submitted, we have decided to revoke the sponsor licence for the reasons listed below:
Failure to retain evidence of Resident Labour Market Test (RLMT)
…
11. We are not satisfied that you have adequately demonstrated compliance with the RLMT. Annex 5 ac) states we will revoke your licence if:
If we have asked you to send us any documents or information and you do not send the documents or information within the give time limit.
Failure to report change of business and location of employee
…
17. We are not satisfied that you have adequately addressed the reason for not reporting the correct working at address of your sponsored workers. Annex 6 g) and j) of the Tier 2 and 5 Sponsor Guidance states we may revoke your licence if:
g) You fail to comply with any or all of your sponsor duties
j) As a result of information available to our compliance officers, we are not satisfied that you are using the processes or procedures necessary to fully comply with your sponsor duties.
…
20. In light of the above, we are not satisfied that you have adequately addressed to sponsor employees or issue further CoS. Section 3 paragraphs 19.9 – 19.14 of the Sponsor Guidance provide information relating to your existing sponsored employees."
"You have now been given a third opportunity to address all our concerns. You have submitted no additional evidence to demonstrate [the Claimant] has addressed all the issues identified in our letter of 16 June, therefore the issues contained in this letter and the decision still apply."
The Legislative and Policy Framework
The Tier 2 Scheme
The Guidance
"What is sponsorship?
1.1 Sponsorship is based on two principles;
a) Those who benefit most directly from migration (employers, education providers or other bodies who are bringing in migrants) should play their part in ensuring the system is not abused.
b) We need to make sure that those applying to come to the UK for work or study are eligible and that a reputable employer or education provider genuinely wishes to take them on.
…
1.3 Sponsorship plays two main roles in a migrant's application for permission to come to, or remain in the UK to work or study:
a) It provides evidence that the migrant will fill a genuine vacancy that can't be filled with a suitable qualified or skilled settled worker, or that they will be studying for an approved qualification.
b) It involves a pledge from the sponsor that it accepts all of the duties expected when sponsoring the migrant.
…
2.8 We will monitor your ability and willingness to always comply with your duties. We will:
a) set a limit on the number of certificates of sponsorship (CoS) you can assign
b) visit you, to check you are complying with your duties
c) refer cases for civil penalty action, or possible prosecution if we find evidence that you may have employed migrants illegally.
For more information on sponsor duties, please see sponsor duties.
2.9 Throughout the validity period of your license we will 'rate' you as either A or B according to our assessment of your ability to comply with your sponsor duties. If you are B-rated you must meet a time-limited sponsorship action plan, which you must pay for and which will set out the steps you need to take to gain or regain an A-rating. If you do not meet the requirements of your action plan we will revoke your licence. For more information on ratings, please see rating sponsors.
2.10 You have a duty to act honestly in any dealings with us. This includes, for example, not making false statements and ensuring all essential information is disclosed when either applying for a sponsor licence or assigning or applying for a certificate of sponsorship (CoS).
2.11 If we believe you have not complied with your duties, have been dishonest or pose a threat to immigration control, we will take action against you. The action can result in your licence being revoked, suspended or downgraded to a B-rating and/or a reduction in the number of certificates of sponsorship (CoS) you can assign. For more information on the action we may take and the processes we will follow in such cases, please see what will happen if I don't comply with my sponsor duties.
….
14. Sponsor duties
What are my duties as a licensed sponsor?
14.1 As a licensed sponsor you will benefit directly from migration and we expect you to play your part in ensuring that the system is not abused. This means that you must fulfil certain duties. Some of these duties apply to all sponsors, whilst others are specific to those licensed under certain tiers or categories. The objectives of these duties are to:
a) prevent abuse of assessment procedures
b) capture early, any patterns of migrant behaviour that may cause concern
c) address possible weaknesses in process which can cause those patterns
d) monitor compliance with Immigration Rules.
…
15. Duties that apply to sponsors in all tiers
Record keeping duties
15.1 You must keep the following records or documents, and make them available to us on request: (See also, Appendix D – record keeping)
….
15.2 You must give us, when asked, any documents relating to your sponsored migrants or the running of your organisation that we consider relevant to assessing your compliance with your duties as a sponsor. We might, for example, ask for details of your recruitment practices so that we can make sure that a resident labour market test was carried out correctly.
…
Reporting duties
15.6 You must report certain information or events to us using the Sponsor Management System (SMS), within any time limit set. For more information on the SMS, please see what is the sponsor management system. Any information reported about a migrant's non-attendance, non-compliance or disappearance will be used to take enforcement action against them. If you are reporting any of the events in paragraphs a), b) or c) below, you must include the last recorded residential address and contact telephone number for the migrant, and any personal email addresses you have for them.
15.7 You must report the following within 10 working days:
…
d) If there are any significant changes in the sponsored migrant's circumstances, for example:
…
What will happen if I don't comply with my sponsor duties?
17.17 The majority of those who employ overseas workers are honest and willing to comply with their duties. Because sponsorship transfers a significant amount of responsibility for selecting migrants to sponsors, we have a duty to ensure that we deal appropriately with the minority who do not comply with their duties.
17.18 We have measures to make sure that we enforce sponsors' duties and identify dishonest or incompetent sponsors early. This could result in your licence being revoked, suspended, or downgraded to a B-rating, and/or a reduction in the number of CoS you are allowed to assign. We may issue a civil penalty if you have broken the rules on illegal working. More information on the penalties for employing illegal workers is available on our pages on the GOV.UK website at www.gov.uk/government/publications/prevent-illegal-working-in-the-uk.
…
18. Downgrading your licence rating
18.1 If we believe you are not complying with your duties, have been dishonest or pose a threat to immigration control, we may revoke your licence or downgrade it to a B-rating.
…
Process we will follow in deciding what (if any) action to take
18.6 Unless revocation of a licence is mandatory, we will take all the facts of the case into account when deciding what action to take against you under one or more of the circumstances outlined in Annexes 3 and 4. No two cases are alike and we can't list all the circumstances in which we will revoke your licence, suspend your licence, downgrade your licence, limit the number of CoS you are allowed to assign or take no action. We consider:
a) The seriousness of your actions and harm done. We will treat seriously anything you have done or failed to do that resulted in migrants going missing.
b) Whether your actions are part of a consistent or sustained record of non -compliance or poor compliance, or are a single event.
c) Any action you have taken to minimise the consequences of what you have done or failed to do. For example, it may help if you tell us quickly that migrants you are sponsoring have stopped turning up for work. If an individual member of your staff is responsible for the problem, we will take into account any action you have taken against that person. We will treat the situation more seriously if you were involved in the actions of your staff or you deliberately ignored what they were doing.
d) Any civil penalties you have been issued with for an "offence" listed in Appendix C unless we withdrew the penalty or cancelled it on appeal.
…
Can my licence be revoked after it has been granted?
19.1 Certain circumstances can lead to your licence being revoked. If this happens it will be revoked in all the tiers, categories and sub-categories which you are licensed under.
19.2 If we revoke your licence and you are an endorsing body under the Tier 1 (Graduate Entrepreneur) scheme, we will withdraw you from that scheme. Any migrant you are endorsing will have their leave reduced to 60 days. This is to allow them to seek another route under which they can remain in the UK. If they have been unable to do this after the 60 days they must leave the UK or face enforced removal.
19.3 For information on the circumstances in which we will revoke your sponsor licence, see annex 5.
19.4 If any circumstances in annex 5 arise, we will revoke your licence straight away. We will write to you to tell you that your licence has been revoked. There is no right of appeal and you won't be allowed to apply again for a sponsor licence for a period of six months from the date your licence is revoked.
19.5 For information on the circumstances in which we may revoke your sponsor licence, see annex 6.
19.6 We can't define in which exceptional circumstances we may not revoke your sponsor licence but when one of the circumstances listed in annex 6 applies, we view this as a serious and will look for evidence that you were either not responsible for what happened or, if you were, you took prompt action to remedy the situation.
For example:
a) one of your employees was wholly responsible for the dishonesty and was dismissed when it came to light; or
b) a migrant was paid the wrong salary because of a problem with your payroll system but this was put right as soon as possible.
…
What happens to my sponsored migrants if my licence is revoked?
19.9 If we revoke your licence, we will:
a) Immediately end (curtail) the permission to stay in the UK, or worker authorisation of any migrants whom we believe were actively involved (complicit) in any dishonesty (for example, if the migrant agreed that you would arrange a non-existent job for them so they could come to the UK)
b) reduce the length of the worker authorisation, or permission to stay in the UK of any other migrants (those who were not actively involved) to 60 calendar days. This is to give them a chance to find a new sponsor. If the migrant has less than 60 days of their leave or worker authorisation remaining, we won't reduce it.
…
If my licence is revoked, can I apply again?
19.15 Once your licence has been revoked you can't make a further application for a sponsor licence for a period of six months from the date your licence was revoked. If you do make an application before that six month period has passed, it will be refused. The only exception to this is if your licence was revoked in error. If this happens we will contact you to make arrangements for it to be reinstated.
…
28. Resident labour market test
Resident labour market test - Tier 2 (General)
28.1 The resident labour market test is there to protect the settled workforce and means that you must advertise the job you want to recruit for to give settled workers a chance to apply. You can only recruit a migrant if:
a) you have completed a resident labour market test and can show that no suitable settled worker is available to fill the job, or
b) the job is exempt from the resident labour market test.
…
How to carry out the resident labour market test - Tier 2 (General)
28.16 Unless an exemption applies all jobs must be advertised to settled workers for 28 calendar days. For more information on exemptions, please see exemptions from the resident labour market test. You can advertise jobs in two ways:
a) Advertise the vacancy for a single continuous period, with a minimum closing date of 28 calendar days from the date the advertisement first appeared.
b) Advertise the vacancy in two stages, with each stage being advertised for no less than 7 calendar days but where both stages total a minimum of 28 calendar days. For example, you could at first advertise the vacancy for 14 calendar days and appoint any suitable settled worker who applies. If no suitable settled worker applies, you can't appoint a migrant worker at this stage as you must advertise the vacancy for a further 14 calendar days, making 28 calendar days in total. If no suitable worker settled applies during either the first or second stage, then the resident labour market test has been passed and you can appoint a Tier 2 migrant.
28.17 You must place two advertisements using the methods set out in this guidance. In many cases, one of those will be an online advertisement using the Jobcentre Plus Universal Jobmatch service or Jobcentre Online for jobs in Northern Ireland. This is mandatory for certain jobs. For more information on advertisement methods, please see resident labour market test Tier 2 (General) advertising methods.
28.18 When conducting the resident labour market test, you can only use the advertising methods set out in this guidance. The job advertisement must be in English, or Welsh if based in Wales, and it must include:
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Annex 3 - Circumstances in which we will downgrade your licence to a B-rating
We will downgrade your licence if:
a) You have certified that a migrant won't claim state benefits, and that migrant then does claim benefits, with your knowledge.
b) You fail to provide any documents listed in Appendix D of this guidance, to a
compliance officer within the specified time limit.
c) As a result of information available to our compliance officers, we are not satisfied that you are using the processes or procedures necessary to fully comply with your sponsor duties.
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Annex 4 - C ircumstances in which we may downgrade your licence to a B-rating
We may downgrade your licence to a B-rating if:
a) You sponsor more than five migrants in the Tier 2 (ICT – Graduate Trainee) category with start dates in the same financial year.
b) You fail to keep any of the documents specified in Appendix D of this guidance.
c) You fail to comply with any of your sponsor duties.
Annex 5 - Circumstances in which we will revoke your licence
We will revoke your licence if:
a) We find, after your licence has been granted, that you gave false information on your sponsor licence application, or in support of your sponsor licence application, and had you given the correct information we would have refused your application.
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ac) If we have asked you to send us any documents or information and you do not send the documents or information within the given time limit.
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Annex 6 - Circumstances in which we may revoke your licence
We may revoke your licence if:
g) You fail to comply with any or all of your sponsor duties.
h) We find that you have no level 1 user in place that meets the requirements set out in level 1 user.
i) You have no SMS users in place.
j) As a result of information available to our compliance officers, we are not satisfied that you are using the processes or procedures necessary to fully comply with your sponsor duties
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TIER 2, TIER 4 AND TIER 5 OF THE POINTS BASED SYSTEM – GUIDANCE FOR SPONSORS APPENDIX D – KEEPING DOCUMENTS
The following documents can either be kept as paper copies or in an electronic format. There is no prescribed method for storing the documents, but you must be able to make them available to us on request.
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TIER 2, TIER 4 AND TIER 5 OF THE POINTS BASED SYSTEM – GUIDANCE FOR SPONSORS APPENDIX D – KEEPING DOCUMENTS
Resident Labour Market Test Tier 2 and Tier 5
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Where the vacancy was advertised on the internet, including where it is advertised on your own website (where this is permitted), you must keep a screen shot from the website hosting the advertisement, on the day the vacancy is first advertised, which clearly shows:
• the name of the website; and
• the contents of the advert; and
• the date and the URL; and
• the closing date for applications.
N.B if the website clearly shows the date the vacancy was first advertised, the screen shot can be taken at any point during the period the vacancy is advertised.
Where the advertisement is not on your own website and does not show your name, a copy of a letter or invoice from the website will be required, to prove that an advertisement was placed.
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If the recruitment was done using a recruitment agency, you must keep the following:
• a copy of the contract between you and the recruitment agent;
• a copy of the invoice; and
• copies of any adverts placed which clearly show the title of the publication, the date(s) and the advert as it appeared."
The Legal Principles
(1) The essence of the system is that the Secretary of State imposes "a high degree of trust" in sponsors granted ('Tier 2' or 'Tier 4') licences in implementing and policing immigration policy in respect of migrants to whom it grants Certificate of Sponsorship ("CoS") or Confirmation of Acceptance ("CAS") (per McGowan J in London St Andrews College v Secretary of State for the Home Department (supra) (2014) EWHC 4328 (Admin) at [12]) (and see Silber J in R (Westech College) v Secretary of State for the Home Department (2011) EWHC 1484 (Admin)).
(2) The authority to grant a certificate (CoS or CAS) is a privilege which carries great responsibility: the sponsor is expected to carry out its responsibilities "with all the rigour and vigilance of the immigration control authorities" (per McGowan J in London St Andrews College v Secretary of State for the Home Department (supra) at [13]).
(3) The Sponsor "must maintain its own records with assiduity" (per McGowan J in London St Andrews College v Secretary of State for the Home Department (supra) per McGowan J at [13]).
(4) The introduction of the Points-Based System has created a system of immigration control in which the emphasis is on "certainty in place of discretion, on detail rather than broad guidance" (per Lord Hope in R (Alvi) v Secretary of State for the Home Department [2012] UKSC 33, reported at [2012] 1 WLR 2208 at [42]).
(5) The CAS in the 'Tier 4' scheme (the equivalent of the CoS in the 'Tier 2' scheme) is very significant: the possession by a migrant of a requisite CAS provides strong, but not conclusive, evidence of some of the matters which are relevant upon the migrant's application for leave to enter or remain (Global Vision per Beatson LJ at [12], citing Lord Sumption SCJ in R (New London College Ltd) v Secretary of State for the Home Department [2013] UKSC 51.
(6) There is no need for UKBA to wait until there has been breach of immigration control caused by the acts or omission of a sponsor before suspending or revoking the sponsorship, but it can, and indeed should, take such steps if it has reasonable grounds for suspecting that a breach of immigration control might occur (per Silber J in R (Westech College) v Secretary of State for the Home Department (2011) EWHC 1484 (Admin) at [17-18]).
(7) The primary judgment about the appropriate response to breaches by licence holders is that of the Secretary of State. The role of the Court is simply supervisory. The Secretary of State is entitled to maintain a fairly high index of suspicion and a 'light trigger' in deciding when and with what level of firmness she should act (R (The London Reading College Ltd) v Secretary of State for the Home Department (2010) EWHC 2561 Admin per Neil Garnham QC.
(8) The courts should respect the experience and expertise of UKBA when reaching conclusions as to a sponsor's compliance with the Guidance, which is vitally necessary to ensure that there is effective immigration control ((per Silber J in R (Westech College) v Secretary of State for the Home Department (2011) EWHC 1484 (Admin) at [29(d)]).
The scope of judicial review
"It is essential that in exercising the very important jurisdiction to grant judicial review, the court should not intervene just because the reasons given, if strictly construed, may disclose an error of law. The jurisdiction to quash a decision only exists when there has in fact been an error of law. Moreover, the court should not approach decisions and reasons given by committees of laymen expecting the same accuracy in the use of language which a lawyer might be expected to adopt." (emphasis added)
Submissions
Analysis
Claimant's first argument: Sub-paragraph (ac) of Annex 5
"[W]e will revoke your licence if:…
(ac) we have asked you to send us any documents or information and you do not send the documents or information within the given time limit".
"15.2 You must give us when asked any documents relating to your sponsored migrants that we consider relevant. We might for example ask for details of your recruitment practices so that we can make sure that a resident labour market test was conducted correctly.
16.1 To comply with your duties, you must keep certain documents for each sponsored migrant. Appendix D lists these documents and says how long you must keep them. The documents can be kept in paper or electronic form. If kept electronically, you must make sure that all the relevant parts of the document are visible as described in Appendix D.
16.2 There is no prescribed method for storing the documents, but they must be available to us on request. If you fail to keep any documents specified in Appendix D and/or fail to give us any documents when we ask for them, we will take action against you."
Failure to retain evidence of RMLT
Failure to report change of business and location of employees
"[W]e may revoke your licence if:…
(g) You fail to comply with any or all of your sponsor duties.
(j) As a result of information available to our compliance officers, we are not satisfied that you are using processes or procedures necessary to fully comply with your sponsor duties."
Claimant's second argument – irrationality
Claimant's third argument – failure to appreciate discretion
Conclusion
Postcript
"It must be understood that the grant of [sponsor] status is a fragile gift, constant vigilance about compliance is a minimum standard required for such sponsors. The burden of playing an active role in the support of immigration control is a heavy one. The SSHD is entitled to review purported compliance with a cynical level of supervision."
UPON hearing counsel for the Claimant and counsel for the Defendant,
AND UPON the hearing on 11-12 March 2015 of the Claimant's claim for judicial review of the 16 June 2014 and 4 July 2014 decisions to revoke the Claimant's Tier 2 sponsor licence,
AND UPON having considered the written representations of the Parties in respect of the continuation of interim relief,
IT IS ORDERED THAT:-
14th May 2015
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The Hon. Mr Justice Haddon-Cave