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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 >> Sivayogam, R (on the application of) v Secretary of State for the Home Department [2017] EWHC 2575 (Admin) (25 October 2017)
URL: http://www.bailii.org/ew/cases/EWHC/Admin/2017/2575.html
Cite as: [2017] EWHC 2575 (Admin)
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QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Strand, London, WC2A 2LL |
||
B e f o r e :
(Sitting as a Deputy Judge of the High Court)
____________________
| THE QUEEN (on the application of SIVAYOGAM) |
Claimant |
|
| - and - |
||
| SECRETARY OF STATE FOR THE HOME DEPARTMENT |
Defendant |
____________________
Mr William Hansen (instructed by Government Legal Department) for the Defendant
Hearing date: 12 October 2017
____________________
Crown Copyright ©
- The Claimant seeks permission to apply for judicial review of the decision of the Defendant dated 7th March 2017 revoking the Claimant's sponsor licence under Tiers 2 and 5 of the Defendant's points based system. The Claimant relies on two grounds:
- The Claimant is a religious charity, serving Hindu and Tamil communities in the London area and elsewhere. It operates two temples in the Hindu Saiva tradition in Wembley and Croydon including deities not found elsewhere in Europe and the UK. The Croydon temple had been moved from Tooting in 2012. It provides community services including humanitarian and related work. The Claimant explained that finding priests in the UK and Europe has proved to be extremely difficult so that it has to sponsor workers in the temples from outside the UK and Europe.
- On that basis in 2009 the Claimant was granted a Tier 2 and Tier 5 sponsor licence under the Defendant's points based immigration scheme, introduced on 31st March 2009. Under that system any migrant seeking to come to the UK for work is required to have a sponsor, evidenced by a certificate of sponsorship (CoS). Central to the scheme is that sponsors with a sponsor licence are responsible for sponsoring workers migrating to the UK to work in their business. To obtain and hold a licence sponsors have to meet the duties and conditions under the scheme on an ongoing basis. These are set out in detail in the Guidance, which prevailed at the time of the decision in this case, but it is agreed that in substance its terms did not materially differ from earlier versions of that guidance. I refer to its detailed provisions so far as relevant later in this judgement.
- To become a sponsor, the sponsor has to nominate a number of key personnel to take responsibility for overseeing the sponsor process. That includes issuing CoS, keeping records and reporting migrant activity. The personnel included the authorising officer (AO), who was ultimately responsible for the licence and any non-compliance, and the level 1 user, who was responsible for updating changes to the licence and migrant reporting using the Defendant's central sponsor management system (SMS). CoS could only be issued by a nominated Level 1 or Level 2 user.
- Since 2009 the Claimant had sponsored 27 priests to work in its temples and at the relevant time had three working in the temples, who had leave to remain on the basis of the issued CoS. The Claimant had moved into premises at 2a Elmwood Road, Croydon in 2012 and then moved from there to Aurelia Road, Croydon in February 2017.
- As part of the monitoring of the scheme the Defendant's compliance officers would visit sponsor premises to ensure that there was compliance. Compliance visits had been made to the Claimant's premises in 2010 and 2013 without any identified enforcement steps being required.
- On 14th December 2016 there was a further compliance visit, during which Shankar Swaminathan, the Claimant's priest in charge of administration, was interviewed. Mr Swaminathan explained in the interview that Mr Sivaruban Rajendran was the AO. Following the visit the compliance officer made a report to the Defendant's enforcement team dated 22nd and 23rd December 2017, identifying a number of breaches and recommending 'suspension/revocation' of the licence.
- On 6th February 2017 the Defendant's Sponsor Compliance Team officer wrote to Mr Rajendran as the AO for the Claimant. The letter set out two alleged breaches under Annex 5 to the Guidance (mandatory revocation) and a number of others in Annex 6 (possible revocation). The letter explained that the licence would be suspended before revocation action began to give the Claimant the opportunity to explain the issues set out in the letter and that the Claimant had 20 working days to make representations including submitting evidence in response to the letter. The letter also required the submission with any response of a hierarchy chart showing all managers and staff as well as the P60s for the previous financial year. The letter concluded that if the Claimant failed to adequately address the issues in the letter the licence would be revoked.
- On 20th February 2017 Mr Nagendram Seevaratnam responded to the letter as executive officer on behalf of the Claimant. The letter explained that he was the executive officer of the Claimant. He apologised for the 'numerous breaches' of the Guidance. He explained that they were not deliberate and that the Claimant's trustees took this very seriously. The letter set out proposed changes by nominating a level 1 and level 2 user, applying for the premises at Aurelia Road, which were subject to contract, as the new branch for the Claimant and taking steps to deal with the remuneration of its workers, together with regular future reviews to monitor compliance. The letter also explained the move to Elmwood Road. The letter sought feedback from the Defendant as to whether the proposals were sufficient. The letter attached a hierarchy of workers as requested and the P60s for the Claimant's workers as well as other documents including a letter from Mr Rajendran. In his letter Mr Rajendran apologised for the breaches and took full responsibility for the breaches. He explained that he had not kept himself appraised of the guidelines and had sought to help the Claimant by managing the sponsorship of priests and religious workers as a volunteer.
- On 7th March 2017 the Defendant's compliance manager responded. The letter went through each of the alleged breaches in the suspension letter dated 6th February 2017 together with the response from the Claimant. In some cases it accepted the explanation, but mostly it concluded that there had been a breach, including two Annex 5 mandatory revocation breaches. It also concluded that there had been an mandatory revocation breach in what was said to be the failure to provide the hierarchy of workers as requested. The letter said that, given the findings, the Claimant posed a threat to immigration control and that downgrading the licence was not appropriate due to the seriousness of the non-compliance with the sponsor duties. The letter concluded that as a result the licence was revoked with immediate effect.
- On 7th April 2017 Mr Seevaratnam responded to the revocation letter in what was headed 'a plea for mercy'. The letter explained that the Claimant had not misused the system and wanted to work with the Defendant. The letter made various points on the grounds for revocation, including reference to the 2013 compliance visit. It also explained that the full hierarchy had been provided, contrary to what had been suggested in the revocation letter. The letter concluded:
- On 10th April 2017 the Defendant's officer responded by email. She explained that the Defendant would not undertake a review of the decision based on representations or new evidence that should have been made available at the time of the visit or the response to the suspension letter. The email concluded that no further correspondence would be entered into relating to this matter.
- A pre-action protocol letter was sent by the Claimant to the Defendant on 16th May 2017, to which the Defendant responded on 25th May 2017. The claim was issued on 7th June 2017.
- Neither the email dated 10th April 2017 nor the response to the pre-action protocol letter specifically addressed the fact that the workers' hierarchy had been provided, contrary to what had been asserted in the revocation letter. It is now accepted by the Defendant that it had been provided and that the decision letter was in error to that extent.
- The Guidance was published on 24th November 2016. It is detailed and carefully structured. For the purposes of this judgement it is convenient to deal with its structure and general provisions at this stage before considering the more detailed requirements in respect of the specific alleged breaches later in the judgement.
- The Guidance explains that it is for those who want to apply for a sponsor licence and tells the applicant what the Defendant expects of a licence holder, the processes to be followed and how to meet the duties and responsibilities of a licence holder. It explains that the guidance is subject to change and the sponsor must check to make sure that it is the latest version.
- At paragraph 2.9 it explains that a sponsor licence is rated A or B and that a B-rated sponsor must comply with a time limited action plan setting out steps to be met to gain A-rated status. The Claimant was A-rated.
- Section 4 deals with Tier 2 specific applicants, including:
- is a registered, excepted or exempt UK charity according to the charity legislation in force in your part of the UK, or is an ecclesiastical corporation, either corporation sole or body corporate, set up for charitable purposes;
- is the structure for a faith-based community with a common system of belief and spiritual goals, codes of behaviour and religious practice, which exists to support and/or propagate common beliefs and practices and where beliefs:
- include any religious belief or similar philosophical belief in something transcendental, metaphysical or ultimate and
- leave out any philosophical or political belief concerned with man, unless that belief is similar to religious belief
- receives financial and material support for your core religious ministry from your congregation or community on a voluntary basis, without promise or coercion '.
- The Guidance sets out in detail the range of obligations for a sponsor including its structure and reporting processes.
- In section 17 it deals with compliance, including the following:
- In section 18 the Guidance deals with downgrading including the following:
- Section 19 deals with revoking a licence, including:
- Section 20 deals with suspending a licence, including:
- In R (oao Raj and Knoll Ltd) v SSHD [2016] EWCA Civ 770, which was a Tier 2 and 5 sponsor case, Tomlinson LJ referred to principles stated by Haddon-Cave J at first instance in that case as follows:
- At paragraph 24 Tomlinson LJ referred to the judge's decision below, including:
- My attention was also drawn to the judgement of Silber J in R (oao Westech College) v SSHD 2011 EWHC 1484 (Admin) (a Tier 4 case), where at paragraph 67 he commented in respect of the obligation to have planning permission:
- As I have noted, there were three Annex 5 breaches relied upon by the Defendant in making the revocation decision. I will deal with each of these in turn, including the failure to provide the requested hierarchy, in respect of which the Defendant now accepts that there was in fact no breach.
- Paragraph 15.13 of the Guidance provided:
- hold suitable planning permission or Local Planning Authority consent to run your type/class of business at your trading address (where this is a Local Authority requirement).'
- In the investigation report the compliance officer reported that he had been advised that the Elmwood Road premises included on the first floor a former office and storage area that had been converted into three bedrooms. He reported that he had consulted the planning register, which showed that a planning application for the conversion had been made on 30th June 2016 which had been refused, and concluded that, as the Claimant had been occupying the premises since July 2012, it had evidently been doing so without planning permission in breach of paragraph 15.13 of the Guidance.
- The suspension letter dated 6th February 2017 referred to the visit on 14th December 2016 and said that 'the officer had identified a number of issues which have led us to suspend your sponsor licence.' It continued at paragraph 3:
- In the response letter dated 20th February 2017, having apologised for the numerous breaches of the Guidance, Mr Seevaratnam referred to the proposed move to Aurelia Road, which he said was 'much better suited to house both the charity and its sponsored workers. The charity is in the process of purchasing this property freehold and have already exchanged contracts'. The letter went on to explain:
- In the revocation letter dated 7th March 2017 the Defendant said that the representations had been considered and that the decision had been taken to revoke the licence. In respect of planning permission it rehearsed the matters set out in the suspension letter and summarised the representations, including at paragraph 11`:
- In the Claimant's further response dated 7th April 2017 it was said that the property at Elmwood Road has 'D1' planning permission and so fulfilled the requirement in paragraph 15.13 of the Guidance. At paragraph 10 the letter stated in this respect:
- I should explain that D1 planning permission is a reference to class D1 of the Use Classes Order, which covers 'non-residential institutions' and includes 'any use not including a residential use (h) for or in connection with public worship or religious instruction '.
- Mr Edward Grieves, who appears for the Claimant, submits that there was no breach of paragraph 15.13 or within Annex 5(x) because the D1 permission would have provided for the use as a temple and the residential accommodation for the priests was not part of running the specific type/class of business at the trading address for the purpose of paragraph 15.13 or Annex 5(x). He submits that this should have been clear to the compliance officer and the Defendant, given the layout of the premises with the temple on the ground floor and the residential accommodation upstairs. The Defendant had failed to carry out any sufficient investigations as to the extent of the planning permission. In any event it should have been obvious that the residential use was not part of the Tier specific type or class of business as a religious organisation.
- Mr William Hansen, who appears for the Defendant, submits that this is not properly a case of precedent fact. The issue is whether on the material before the Defendant she acted irrationally in concluding that there had been a breach of paragraph 15.13 and Annex 5(x). The suspension letter had put the Claimant on notice as to the grounds for the Defendant's belief that there had been a breach of that obligation, with which the Claimant was required to comply as an Annex 5 requirement. The argument now advanced was not raised at all in the response letter dated 20th February 2017. On the contrary throughout the Claimant had not denied the breaches as alleged. Even in the plea for mercy dated 7th April 2017, while reference was made to D1 permission, it was not explained why that would be sufficient to meet the requirement for planning permission in respect of the residential accommodation. In any event no planning permission has been produced or other basis for permission advanced. The provision of accommodation for the priests or other religious workers was clearly an integral part of the activities of the running of the Claimant's business as a religious institution on the premises at Elmwood Road.
- Under the Guidance it was for the Claimant to ensure that it had the appropriate planning permission for running its business as a religious institution on the premises at Elmwood Road. The suspension letter set out the basis for the Defendant not being satisfied that the premises were complying with the planning regulations, that is that planning permission for change to residential use had been refused. In the response dated 20 February 2017 there was a general acceptance of the breaches and no explanation was given as to the existence of any planning permission or other compliance with that requirement. In the circumstances in my judgement the Defendant was fully entitled to conclude in her letter dated 7 March 2017 that the Claimant had acted in breach of paragraph 15.13 and Annex 5(x) in this respect.
- I should add that there is no challenge to the refusal to reconsider the decision in the light of the plea for mercy in the further response dated 7th April 2017. However there was nothing in that letter even at that post-decision stage to alert the Defendant to the contention that there was in fact planning permission for the residential use or as it is now put, that that was not part of the running of this business. In any event there is no clear evidence before this court as to the extent of any planning permission for the use or other basis for the contention or whether in fact that would have enabled separate use of the ground floor for D1 purposes. So far as it is material, I would not accept on the material before the court that in the circumstances the provision of the accommodation for the priests was not an integral part of running this residential institution for the purposes of the Guidance. I note that elsewhere in the response letter dated 20th February 2017 it was claimed that the workers were exempt from the national minimum wage as people living and working in a religious community. For all these reasons this ground is not made out.
- Paragraph 31.19 of the Guidance requires :
- Paragraph 31.23 provides:
- Annex 5(t) provides:
- In the interview it was noted that Mr Swaminathan explained that the donations from the public go into a box and at the end of the week the donations in the box are split between the priests and religious workers. There was no specific reference in the compliance officer's report to the amount paid or the conditions in relation to what was stated in CoS.
- In the suspension letter dated 6th February 2017 paragraph 22 set out the payments for the sponsored workers in their CoS. In each case it included a gross salary figure, of which a stated amount was allowances including a goodwill payment of £500. It continued at paragraph 23:
- The letter then set out the relevant parts of the Guidance and concluded that the Defendant believed that this was in breach of Annex 5(t).
- I have been shown one of the relevant CoS, which gave in that case £1800 as the gross salary including £1200 gross allowances and guaranteed bonuses described as 'Following are provided in lieu of allowances: furnished accommodation, food and clothing. Utility bills and council tax are borne by the employer. He will receive an estimated sum of £500 monthly as goodwill payments from devotees.'
- The Claimant's response dated 20th February 2017 explained that a fully enumerated compensation package was proposed. It went on to say:
- In the revocation letter dated 7th March 2017 from paragraph 33 the relevant parts of the suspension letter and the Guidance were set out. The representations were summarised in paragraph 38 that it was proposed to provide the sponsored workers with a fully enumerated compensation package and that all contracts, sponsorship applications and payslips will fully account for monetary allowances. Further the workers were exempt from the National Minimum Wage requirement.
- At paragraph 39 the letter continued:
- In the further response letter dated 7th April 2017 in the second paragraph numbered 11 it is said:
- Mr Grieves submits that, contrary to what is asserted in paragraph 39 of the revocation letter, the Defendant had evidence that the workers were receiving full pay and conditions at least equal to that stated in the CoS in that Mr Swaminathan had confirmed to the compliance officer that that was the case. Moreover this was repeated in the further response letter dated 7th April 2017. The payslips showed the salary payments, as did the P60s, and it should have been obvious, as had been accepted in 2008 and 2013, that the living allowance was paid in kind by provision of accommodation and other support, which the Claimant paid for. The goodwill payment of £500 was an approximate figure, reflecting the donations from devotees, which would obviously not be reflected in the payslips. This was made clear in the CoS, which described the goodwill payment as 'an estimated sum of £500 monthly as goodwill payments from devotees'. In any event the Defendant had all the material she needed to confirm that the payments were being paid in full and the conditions of employment fully discharged. If she had any doubt, she could and should have interviewed the sponsored workers, who had been made available for interview at the time of the compliance inspection, as had been requested. This would be in accord with the Defendant's guidance for compliance visits. On this evidence it was perverse for the Defendant to say that she was not satisfied that the issue under paragraph 31.19 and Annex 5(t) had been addressed and to conclude that there was a breach of that requirement.
- Mr Hansen submits that there was nothing in the response from the Claimant dated 20th February 2017 which addressed the issue about the past receipt of full pay and conditions equal to that stated in the CoS. It only referred to what were the proposals for the future. Moreover it accepted that the alleged breaches had taken place. In the circumstances on the evidence before the Defendant she was fully entitled to note that the issue had not been addressed in the letter dated 20th February 2017 and that there had been a breach for the purposes of Annex 5(t). Indeed, even in the further response letter dated 7th April 2017 there was nothing more than the unsupported assertion that the living allowance was provided in kind and paid for by the trustees, as had been accepted in 2008 and 2013. It was not for the Defendant to carry out an investigation whether the requirement had been met when the payslips and P60s did not demonstrate that this was the case and the Claimant had failed to provide any evidence to support their assertions, such as they were, as to compliance. This was again not a question of precedent fact, but a question whether the Defendant's decision was supported on the evidence before her or irrational. The assertions in the further response dated 7th April 2017 took the position no further forward. This ground was effectively unarguable as the deputy judge concluded in considering the application on the papers.
- In the CoS for the sponsored worker the gross salary was set out as including a salary as well as an allowance provided in the form of 'furnished accommodation, food and clothing' and 'an estimated sum of £500 monthly as goodwill payments from devotees'. In the interview it was explained that the donations from devotees were divided up at the end of the week. The allowances and donations included on the CoS as part of the gross salary were not reflected on the payslips or any other documentation that Mr Swaminathan had been able to provide at the time of the compliance visit and interview. The suspension letter at paragraph 23 drew attention to this and that Mr Swaminathan was not able to provide any other evidence to demonstrate that the workers were receiving their 'listed allowance payments', which in context referred to both the allowance for accommodation and other support as well as the goodwill payments. The purpose of seeking that evidence was obviously to demonstrate that the requirement in paragraph 31.19 and Annex 5(t) was being met. The letter expressly gave the opportunity to explain that issue including the submission of evidence.
- As a matter of fact the response letter from the Claimant did not address the past payments at all, simply proposing that in future the payslips would 'now' fully account for all allowances in monetary terms. In those circumstances in my judgement it was open to the Defendant to conclude, as she did in the revocation letter dated 7th March 2017, that the Claimant had provided no evidence to show that the sponsored workers were receiving their listed allowance payments and were being compensated at the total rate outlined in their CoS. On a fair reading that was clearly referring to the absence of any further supporting evidence beyond the assertion by Mr Swaminathan to demonstrate compliance with the Guidance requirements as set out in paragraph 34 of the letter. The response letter had not addressed at all the concern that this requirement had not been met save for the acceptance of the breaches set out in the suspension letter with an apology. The response was limited to setting out the proposal that in future the payslips and other documents would fully account for all allowances in monetary terms.
- In that respect the Defendant observed that the statement that in future the sponsored workers will fully receive their allowances was wholly insufficient and that this only served to reaffirm her belief that the workers had not been paid their listed allowance payments and therefore the total amount outlined in the CoS. In fact the response letter had only said that the payslips and other documents would fully account for all the allowances in monetary terms. However, taken overall, I do not consider that that undermines the Defendant's conclusion in that paragraph that she was not satisfied that this had been addressed. Moreover, as she concluded in paragraph 51, the P60s showed total payments significantly less than the salary stated on the CoS, which included the allowances. Therefore she could not be satisfied that the Claimant was paying its sponsored workers the wage detailed on their CoS.
- On that basis in my judgement she was entitled to conclude that there had been a breach of the obligation in paragraph 31.19 and within Annex 5(t). It was not incumbent on her to go beyond her initial investigation and inspection of the payslips and the P60s together with seeking an explanation and evidence from the Claimant to demonstrate that the requirement had been met. She was entitled to draw the inference which she did from the absence of any explanation or evidence in response to the suspension letter.
- As to the further response in the letter dated 7th April 2017, the fact that no point was raised on this in 2008 or 2013 is not a justification for the non-compliance identified in the suspension letter. The explanation that board, utility and food bills are paid for by the Claimant does not address at all the issue as to whether the value received was at least equivalent to that shown in the CoS or indeed the question of the goodwill payments. In my judgement the conclusion that there was a breach of Annex 5(t) was open to the Defendant on the evidence before her and that conclusion was not perverse.
- Paragraph 15.2 of the Guidance provides:
- Annex 5(ee) includes as a circumstance for mandatory revocation:
- As I have noted earlier in this judgement, the suspension letter asked for the provision of a hierarchy of all managers and staff and this was provided with the response letter dated 20th February 2017. In the decision letter dated 7th March 2017 at paragraph 49 it was incorrectly noted that the Claimant had failed to provide a hierarchy chart as they had not detailed their volunteers and had omitted three sponsored workers. On that basis the letter concluded that there had been a breach within Annex 5(ee). In the further response letter dated 7th April 2017 it was explained at paragraph 13 that the request was to provide a hierarchy of staff and managers and that was why the hierarchy provided did not include volunteers. Furthermore it was explained in respect of the three named workers said to have been omitted that one was no longer sponsored and had left the country and that the other two had not obtained visas and so had never become workers in this country. The Defendant's email dated 10th April 2017 did not expressly comment on that explanation.
- It is now accepted that the conclusion in the revocation letter in that respect was in error. In his witness statement dated 7th September 2017 Richard Newsome, a member of the Defendant's Tier 2 and 5 sponsor compliance team, accepted at paragraph 18 that the Claimant had provided an appropriate hierarchy. However, he continued:
- In the circumstances the Defendant's conclusion that there had been a breach of the mandatory revocation requirement in Annex 5(ee) was clearly not supported on the evidence and cannot stand. However the claim is in respect of the decision to revoke the licence and the relief sought is for quashing of that decision.
- The finding as to the breach within Annex 5(ee) was expressly relied on in the revocation letter as a ground for the Defendant's conclusion that the Claimant posed a threat to immigration control and that downgrading the licence would not be appropriate due to the seriousness of the Claimant's noncompliance with the sponsor duties and in concluding that the licence should be revoked. Accordingly the question is whether for the purposes of section 31(2A) of the Senior Courts Act 1981 it appears to the court to be highly likely that the outcome for the Claimant would not have been substantially different if the error had not occurred. In my judgement that question should be addressed in the light of my conclusions on the other issues in this case and in particular the second main ground of challenge, that is the decision not to downgrade the licence, to which I now turn. I will then consider the question under section 31(2A) of the 1981 Act.
- I have set out above the general guidance in respect of downgrading and the specific duties in respect of the Annex 5 breaches. In addition the Defendant found that there had been breaches which fell within Annex 6 of the Guidance. The relevant duties were as follows:
- I have dealt with the relevant facts so far as the Annex 5 breaches are concerned above. The facts in respect of the Annex 6 breaches are essentially not in dispute. The breaches were admitted at the time and are not challenged as part of this claim.
- Taking them in turn:
- In the light of the above the revocation letter concluded overall at paragraph 53 and following:
- So far as relevant, I have set out above the detailed and general responses in the Claimant's further response dated 7 April 2017 and the Defendant's reply dated 10th April 2017.
- Mr Grieves submits that as a matter of approach in the light of the Guidance the Defendant's discretion should be exercised as a straightforward exercise of discretion taking into account all the material considerations. To approach the decision as one where downgrading would only be adopted in place of revocation exceptionally would be an error of law. In particular, the Tier 4 cases were different in that post September 2011 the relevant guidance did not allow for downgrading as an option, while for Tier 2 and 5 cases it is expressly included. Thus the Defendant has approached the exercise of her discretion in this respect incorrectly if, as contended in the detailed grounds of defence, she did so on the basis that, where there are discretionary grounds for the revocation of a licence, revocation can be expected in all but exceptional circumstances.
- In respect of the relevant approach in the Guidance the starting point is Annex 4, which sets out circumstances in which the Defendant may downgrade a licence, which include 'where you fail to comply with any of your sponsorship duties.' That is, he submits, the corollary to Annex 6, which sets out circumstances in which the Defendant may revoke a licence, including the same circumstance as in Annex 4 where '(f) you fail to comply with any of your sponsorship duties.' Annex 5 provides for mandatory revocation but still leaves the Defendant with a discretion to be exercised in the particular circumstances of the case.
- He submits that paragraph 17.19 of the Guidance sets out a range of options depending on the nature of the breach. It does not suggest that these options are subject to an exceptional circumstances test. Moreover in paragraph 20.6 the Guidance makes clear that, where any of the Annex 6 circumstances apply, the Defendant will first consider downgrading the licence. Again that does not suggest that the Defendant will only downgrade in exceptional circumstances. He submits that it is only after considering downgrading the licence that suspension and/or revocation should be pursued. The same approach is found in paragraph 18.6 which deals with downgrading in any of the Annex 4 circumstances including any non-compliance with the sponsorship duties. The decision is to be taken as to what action should be taken in the light of all the facts. That would include having regard to how the licence holder has performed in other areas.
- In that context it can be seen that the advice in paragraph 19.6 that the Defendant could 'not define in which exceptional circumstances we may not revoke your licence' is only engaged once the other options have been rejected in line with the other guidance and it has been decided to follow the revocation process. If applied on that basis, the policy is fair and proportionate, allowing all the options to be considered in a balanced way, taking into account all the material circumstances including the nature of the particular non-compliance.
- Turning to the particular breaches, even if there was a technical failure to obtain planning permission for the residential use of the Elmwood Road premises, this had been the case since before the 2013 inspection and now the Claimant was intending to move to new premises in any event. It was an innocent mistake and could not on any view pose a threat to immigration control. On any rational basis it would not justify revoking the licence, particularly given here the serious implications for the continuance of the Claimant's activities as a religious institution.
- In truth, he submits, the emotional language used in the revocation letter in this respect was driven by the Defendant's flawed belief that the Claimant was lying. Mr Newsome explained the basis for the Defendant's decision in this respect in paragraph 15 of his witness statement, where he asserts that the Claimant's claim that it did not know that planning permission was required contradicts the fact that it made the application for the relevant change of use which was refused in 2016. The same assertion was made in paragraph 26 of the detailed grounds of defence. In fact, as can be seen from the extract from the planning register, the planning application was not made by the Claimant or anyone forming part of its organisation. Thus the Defendant was fundamentally mistaken in this unfair conclusion adverse to the Claimant and this clearly coloured the approach to the exercise of her discretion. Indeed it would undermine the decision as a whole.
- Moreover it is clear that the Defendant misunderstood the representations which had been made in the letter dated 20th February 2017 in stating that she was 'deeply concerned that you are clearly unaware of the requirement to hold the appropriate local planning regulations', when the representations were plainly referring to the requirement for its notification as a branch on the SMS. The suggestion that it was 'astounding' that the Claimant had not even attempted to remedy the breach was hardly fair when it had only been raised in the suspension letter and it was proposing to move to new premises in any event.
- As to the breach in respect of the salary payments, he submits that it should have been obvious from the CoS that the allowance for food and accommodation was paid in kind. Thus there was no payment to be made to the sponsored workers. Equally the CoS made clear, as indeed Mr Swaminathan explained to the compliance officer, that the goodwill payments were from donations from devotees and hence would not form part of the salary payment. This had been accepted in 2013. There was no reason for the Defendant to disbelieve what Mr Swaminathan had told the compliance officer. If there was any doubt in this respect, the compliance officer could and should have interviewed the three sponsored workers, who had been made available for interview at the time of the inspection. If there was a breach, it was highly technical and could not constitute any threat to immigration control or rationally support revocation.
- The final Annex 5 breach was the asserted failure to provide the hierarchy, which the Defendant now accepted was an error. However, it was expressly relied upon as one of the three mandatory breaches supporting revocation. While Mr Newsome asserts that the decision would have been the same, his judgement was also on the basis that the Claimant had been lying in respect of not knowing that planning permission was required. Hence his evidence is itself unsafe in this respect. This went to the heart of the decision process in exercising the discretion and it is not possible to conclude that it is highly unlikely that if the mistake had not been made and there was no breach for the purpose of Annex 5(ee) the decision would not have been substantially different, particularly given the technical nature of the other Annex 5 breaches and indeed all of the Annex 6 breaches.
- Turning then to the Annex 6 breaches, the failure to enter the Elmwood branch in the correct box in the SMS was on any view a highly technical point. The premises were in any event on the system as a nominated workplace for the sponsored workers. This was not raised in 2013 when the compliance officer visited the premises and was only first raised in the suspension letter. In the circumstances it was again disproportionate and unfair for the Defendant in paragraph 12 of the revocation letter to describe the failure to update the SMS after five years as 'incredulous' when the Claimant did not know of the error until it received the suspension letter following which as a result of the suspension it had no officer authorised to enter the SMS, at least without the agreement of the Defendant in response to their proposals in the letter dated 20th February 2017.
- The failure to notify an AO or a level 1 user was again technical. In the first place the reason why Mr Rajendran ceased to qualify as an AO or indeed as a level 1 user was simply because he had ceased to be a trustee and was helping the Claimant with the SMS on a voluntary basis. The application to register Mr Seevaratnam as the level 1 user was only rejected because it was on the wrong form. The failure to renew the application on the correct form was a simple oversight. No point was taken on this in 2013. It was on any view a technical breach which was the result of an honest mistake. It could and would be readily put right as proposed by the Claimant in their letter dated 20th February 2017 and could not rationally justify revocation of the licence.
- On the failure to pay the sponsored workers salaries direct into their personal bank accounts he submits that in fact here the cheques were paid by the Claimant direct into the bank accounts and not handed to the workers. Thus there was no breach, as the Defendant would have been able to find out if the workers had been interviewed. In any event it was a technical matter because, as explained in the response letter from the Defendant dated 7th April 2017, there was careful control of the cheque payments which ensured that the payments were correctly made. Again this could not rationally justify revocation.
- Overall, he submits, the Defendant was required to exercise her discretion in this case with regard to her own guidance in paragraph 17.19 that she will in most cases support downgrading and an action plan 'where the breach is a minor issue, you are willing and able to correct it and pose no threat to immigration control.' In this case all of the breaches were minor if they were breaches at all. In each case the Claimant was willing and able to correct the breaches and the Claimant on any view posed no continuing threat to immigration control.
- He submits that in the revocation letter there was no examination of this advice or its application to the facts of the present case. The Defendant simply asserted at paragraph 53 that, given all of the above, the Claimant posed a threat to immigration control without explaining at all the basis for that conclusion. That was despite the fact that there had been no reported incidents of any of its sponsored workers being in breach of immigration control. In the light of the technical nature of the breaches the conclusion was perverse.
- In paragraph 54 the suggestion that the Defendant will only downgrade a licence and issue an action plan where there is scope to rectify shortcomings or omissions in systems or retained documents is not supported in the Guidance, which explains how the Defendant's discretion will be exercised. As a basis for the decision in this respect it was flawed.
- Finally the conclusion that downgrading is not appropriate 'due to the seriousness of your noncompliance with the sponsor duties' is unexplained and irrational given the actual nature of the breaches in this case. This again demonstrates that the Defendant had failed to have proper regard to the actual nature of the breaches and has taken into account matters that were factually incorrect and/or misunderstood. Accordingly he submits that the decision was therefore unlawful and irrational and should be quashed.
- Mr Hansen accepts the principles set out in Raj and Knoll Ltd as modified by the Court of Appeal in that case. He particularly relies on principles 1 (trust placed in sponsors), 2 (great responsibility imposed on sponsors), 4 (emphasis on certainty), 7 (primary judgement about the appropriate response to breaches for the Defendant) and 8 (respect for the experience and expertise of UKBA when reaching a conclusion as to compliance).
- He submits that on the basis of paragraphs 24(2) and 39 of the judgement of Tomlinson LJ in Raj the approach under the Guidance should be applied on the basis that under Annex 6 revocation is generally to be expected in the absence of exceptional circumstances. Paragraph 19.6 of the Guidance is clear in that respect. The paragraph goes on to advise that the Defendant 'will look for evidence that you have robust processes and procedures in place '. In this case it was manifest that the Claimant did not have robust processes or procedures in place to ensure compliance with the requirements.
- The explanation for the breaches was that the Claimant had simply not been paying attention to the requirements for sponsors in the Guidance. That was expressly admitted in Mr Rajendran's letter enclosed with the response of the Claimant dated 20th February 2017.
- Mr Hansen submits that here the discretion of the Defendant in determining the response to the breaches was a wide one and is only reviewable on a rationality challenge for that he referred to judgement of Hickinbottom J in R (oao Central College of London Ltd) v SSHD [2012] EWHC 1273 (Admin) at paragraphs 42 -44).
- In his submission the starting point under the Guidance is properly the Annex 5 breaches which require revocation because of the risk to immigration control. While all options were open to the Defendant, it was clear that revocation was amply supported.
- Even if the breaches were confined to the Annex 6 breaches, Richard Newsome confirmed at paragraph 22 that these 'were considered very serious and justified revocation on their own'.
- By way of example for the key personnel issues the facts were clear and it was accepted that the Claimant was in breach in each respect and had been since at least 2012. The level 1 user was entitled to issue CoS. This was central to the system of immigration control, in which great trust and responsibility was placed on the Claimant. There had been no properly qualified level 1 user from 2011 onwards, but without proper authority the Claimant continued issuing CoS, which were fundamental to the sponsorship system.
- Similarly in the case of the lack of planning permission, this obligation was important to ensure the continuance of availability of the relevant premises but, as pointed out by Silber J in R(oao Westech College) v SSHD [2011] EWHC 1484 (Admin) at paragraph 67, 'the absence of planning permission is relevant to the crucial issue for UKBA which is whether an organisation which is and was entrusted with obligations as important as those imposed on a sponsor like the Claimant has complied, does comply and will comply with its legal obligations'. In this case the fact remained that the Claimant in its representations had simply failed to give any satisfactory explanation for the alleged breach. The past performance of the Claimant as sponsor was crucial in this respect, including its relevance for its likely future operation.
- On the issue of payment to the sponsored workers the Claimant had failed to produce evidence to the Defendant to satisfy her that it had complied with this obligation. The payslips and the P60s showed figures materially below the figures in the CoS and therefore the Defendant was entitled to conclude that there was a breach. This was central to immigration control because it affected the basis for the grant of the CoS by the sponsor.
- The suspension letter had raised two mandatory revocation breaches and 4 discretionary revocation breaches but no explanation had been given to explain or justify the past breaches, which were in fact accepted. Notwithstanding the good work that the Claimant might do, the breaches demonstrated a cavalier attitude to compliance with the Guidance requirements. The representations had not sought to put forward any exceptional circumstances why revocation should not follow. There were no grounds in law to challenge the exercise of the Defendant's discretion in this respect.
- In this case in the light of the compliance investigation and report the decision was taken to follow the suspension route under process 1 in section 20 of the Guidance. There is nothing to indicate that the Defendant did not first consider downgrading in accordance with her guidance in paragraph 20.6 of the Guidance before sending the suspension letter. In my judgement there was ample evidence available to the Defendant to have determined to follow that procedure on the matters before the Defendant at that stage. I accordingly reject the submission by Mr Grieves that the Defendant failed to apply her guidance in that respect.
- In respect of all of the breaches, including the two Annex 5 breaches, there was little or no explanation or justification in respect of the past breaches in the Claimant's response letter. There was an apology for what were described as 'the numerous breaches' and an acknowledgement that this was due in Mr Rajendran's case to his 'improper attention' to the Guidance and that he had not kept himself 'appraised of the guidelines.' That had to be seen against the advice in the Guidance at paragraph 17.17:
- It was made plain to the Defendant that the breaches were not deliberate but had arisen from neglect or oversight. However that indicated that the Claimant had not taken its duties seriously and moreover it demonstrated that there was here a systematic failing. That was reinforced by the absence of any detailed or evidenced response to the suspension letter, which, while it made proposals for the future, largely did not address the past breaches as such other than apologising for them. I consider that the Defendant was entitled to take the view that, notwithstanding the nature of the Claimant's business and the fact that the breaches were not deliberate, the Claimant was a threat to immigration control, given its demonstrated and persistent failure to comply with its requirements in discharging the role of sponsor.
- In my judgement, having determined to follow the process of suspension for investigation whether to revoke the licence, the relevant advice in the Guidance was in section 19. That included that the Annex 5 breaches would indicate mandatory revocation under paragraph 19.4.
- Under paragraph 19.6, when one of the instances in Annex 6 applies, it will be viewed as a serious matter. While the Guidance explains that the Defendant cannot define in which exceptional circumstances she may not revoke the licence, the clear inference is that the Defendant will be looking for exceptional circumstances to justify taking that course. In particular the Defendant explains that she will look for evidence that the sponsor has 'robust processes and procedures in place'. In my judgement, taken overall, in the light of the established breaches in Annexes 5 and 6 there was nothing to suggest that the Claimant had robust processes and procedures in place.
- The threat to immigration control arose because of the absence of those demonstrated processes and procedures as well as the breaches within Annex 5, indicating a failure to ensure compliance with the law or the requirements of the Guidance. As pointed out in the first two principles in Raj and Knoll Ltd, the sponsor licence imposes a high degree of trust in the sponsor in implementing the Defendant's immigration policy and the privilege of granting CoS carries great responsibility which the sponsor is expected to carry out with all the rigour and vigilance of the immigration control authorities themselves. In my judgement it did not require the demonstration of any actual breach of immigration control. The failure to maintain the required processes and procedures to ensure compliance was sufficient to constitute a threat to immigration control. This did not call for any further explanation or reasoning beyond the reference to the earlier parts of the letter as a whole, which established the numerous breaches within Annexes 5 and 6.
- Following that conclusion, the actual reasoning for the Defendant's decision not to downgrade is in paragraph 55 that it was 'not appropriate due to the seriousness of your non-compliance with the sponsor duties'. That judgement has to be seen in the light of the nature of the actual breaches which the Defendant had found had been established as explained in the revocation letter.
- The absence of planning permission was a matter which the Claimant was under a duty to ensure was in place. This had persisted since 2012. While the Claimant may not have known that there was not planning permission in place, it is plain that it took no steps to verify the position. The fact that the 2013 inspection did not pick it up did not excuse the failure. It cannot be dismissed as a mere technicality.
- Payment of the full salary shown on the CoS is clearly central to the basis for the grant of the CoS for the sponsored migrant. It was for the Claimant to demonstrate that it had complied with this requirement. In this case the Claimant simply failed to provide any supporting evidence to show that this requirement had been met. It cannot be dismissed as a mere technicality. It was no mitigation that it was not picked up in the 2013 inspection or that the evidence could have been discovered by the Defendant carrying out her own investigations. The issue having arisen on the basis of the discrepancy on the face of the payslips and the absence of any other supporting evidence at the time of the inspection, the onus was reasonably on the Claimant to demonstrate compliance.
- In my judgement the failures to notify personnel as AO or level 1 user was not a technicality. They were key personnel, who were central to the administration of the SMS and the issuing of CoS, matters of fundamental importance in the exercise of immigration control in this respect. In this case the Claimant had effectively ignored the relevant requirements for the period since 2012 and yet continued to manage the SMS and issue CoS. On any view that was a breach of substance and one that was not consistent with a body that took its responsibilities as sponsor seriously.
- The issue of payment of the salary into the personal accounts of the sponsored workers is important to be sure that the payments are actually made to the worker concerned. On the representations made the Defendant was entitled to take the view here that not only had cheque payments been made in the past to the workers but that it was intended to continue this into the future. The representations did not contain any suggestion that is now advanced in submission that in fact the payments were made by cheque directly into the personal accounts of the workers. On the evidence before her I consider that the Defendant was entitled to conclude that this was a breach of substance both in itself and in reflecting the Claimant's approach to compliance with the relevant Guidance requirement.
- On the failure to register the Elmwood Road premises Mr Hansen accepts that on its own this might well have been regarded as more of a technicality. However, taken with the other breaches, it reinforces the impression that this was a sponsor whose processes and procedures were neither robust nor effective in ensuring compliance with the Guidance in performing its duties as sponsor as part of the Defendant's system of immigration control.
- I do not consider that this conclusion was flawed by the statement in paragraph 55 that the Defendant would only downgrade a licence and issue an action plan where there is scope to rectify shortcomings or omissions in systems or retained documents. In this case it was manifest that the shortcomings and omissions had taken place over several years and simply could not be rectified in that respect. It was a matter for the Defendant's judgement whether, taken overall, those past breaches were so serious that downgrading would not be appropriate.
- I should also point out that, while I consider that the Defendant was entitled to approach the exercise of her discretion at this point in accordance with paragraph 19.6 of the Guidance and whether there were exceptional circumstances why the licence should not be revoked, the revocation letter does not suggest that the Defendant was determining the issue on the basis of exceptional circumstances. In any event there is nothing to indicate that, leaving aside the error made in respect of the breach under Annex 5(ee) which I consider below, she failed to have regard to any material considerations in making that decision, including the personal matters affecting the Claimant and the difficulties that would be caused by revocation. In my judgement the Defendant was not obliged to say anything more to explain her decision in this respect.
- I do not accept that the Defendant had concluded that Mr Seevaratnam was lying in saying that the Claimant was not aware that planning permission was required for the residential use of the Elmwood Road premises. There is no suggestion to that effect in either the suspension or the revocation letters, both of which refer to the application for planning permission being made without attributing it to the Claimant. It seems to me that this was a mistake on the part of Mr Newsome, which was in turn repeated in the detailed grounds of defence.
- I do not accept that the exercise of this discretion is undermined by what I accept was the apparent misunderstanding of the representations as to the absence of planning permission and the suggestion that the Claimant was unaware of the requirement for planning permission. The substantial point was that the Claimant had not demonstrated that there was planning permission for the residential use of the Elmwood Road premises in breach of the Guidance requirement. It does not seem to me that the gravity of that non-compliance is significantly affected whether it arose from ignorance of the requirement for planning permission or the failure to find out whether in fact there was planning permission notwithstanding that the Claimant was aware that planning permission was required.
- Notwithstanding what may be regarded as the rather extravagant use of the adjective 'incredulous' for the failure to notify the Elmwood Road branch in the correct area in the SMS, that does not affect the fact of the breach which had persisted since 2012 and on any view reflected a failure to ensure compliance with the reporting procedures in the SMS. It does not seem to me that that undermines the decision in the present case.
- For all the above reasons, leaving aside the error in respect of the asserted breach under Annex 5(ee) in the alleged failure to provide the hierarchy or workers, in my judgement the decision of the Defendant to revoke the licence rather than downgrade it was open to her on the material before her and it was not irrational.
- As I have indicated above, the decision contained an admitted error of fact in including a breach for the purposes of Annex 5(ee) in the failure to provide the requested hierarchy of workers, which it is now accepted was in fact fully provided. The breach was specifically included in the breaches set out in paragraph 55 of the revocation letter, leading to the conclusion that the seriousness of that non-compliance meant that downgrading was not appropriate.
- Mr Grieves submits that it is impossible in a weighted judgement of this character to conclude that with the correction of the mistake and the elimination of that Annex 5 breach the revocation decision would have been highly likely not to have been substantially different. Accordingly the claim should be allowed and the revocation decision quashed.
- Mr Hansen relies on the evidence of Mr Newsome that the Defendant would still have revoked the licence on the basis of one or more of the Annex 5 breaches and in any event on the basis of the Annex 6 breaches. He submits that I should refuse relief on the basis of section 31(2A) of the 1981 Act.
- As explained above, it is clear that there was a material error in the matters taken into consideration in the revocation decision and that would prima facie give grounds for judicial review of the decision made on that basis. The question is then whether in this case it appears to me for the purposes of section 31(2A) of the 1981 Act that it is highly likely that the outcome for the Claimant would not have been substantially different if that mistake had not occurred. Applying the Guidance which I have set out above and in the light of the conclusions in respect of the other breaches in the revocation letter, essentially for the reasons set out earlier in this judgment I have concluded that, if there had been no finding that there was a breach within Annex 5(ee), the Defendant would still have been highly likely in this case to have revoked the licence in any event. In coming to that conclusion I have not in the first place relied on the opinion expressed by Mr Newsome. I do however find his evidence supportive of the conclusion to which I have come. I do not consider that his opinions have been coloured in this respect by his error in suggesting that the Claimant had made the application for planning permission in respect of the Elmwood Road premises.
- In the circumstances I conclude that, notwithstanding the error made in concluding that there had been a breach within Annex 5(ee) of the Guidance in the failure to provide the requested hierarchy of workers, relief should be refused on this application for judicial review because I conclude that it is highly likely that the outcome for the Claimant would not have been substantially different if the error had not been made in that the sponsor licence would have been revoked in any event.
Robin Purchas QC :
Introduction
a. That the Defendant erred in law in concluding that the Claimant had breached three obligations under Annex 5 to the Defendant's Tiers 2 and 5: Guidance for Sponsors 2015 (the Guidance); and
b. That in the circumstances the Defendant's decision not instead to downgrade the licence failed to take into account material considerations and/or was irrational.
Permission was granted on the papers on 31st July 2017 with an order for expedition by Roger ter Haar QC sitting as a deputy High Court judge.
Background
'None of this is to excuse or deny the changes that we need to make to our management of the system, but I humbly ask that you reconsider working with us on a performance improvement plan rather than crippling us with this revocation.'
The Guidance
'Tier 2 (Ministers of Religion) and Tier 5 (Temporary Worker) Religious Workers
4.2 To apply for a licence you must be a bona fide religious organisation, which:
'What will happen if I do not 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. We place great weight on the importance of trust in the operation of the sponsorship system, and the need to ensure that sponsors take their duties seriously.
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 certificates of sponsorship (CoS) you are allowed to assign or stop you from assigning CoS and prevent the use of any assigned but unused CoS while we investigate the matter further.
17.19 Where we have reason to believe that you have breached your sponsorship duties, we will consider the nature of the suspected breach.
Where the breach is a minor issue, you are willing and able to correct it, and pose no continuing threat to immigration control, we will in most cases support you in making the relevant improvements by issuing an action plan, which sets out the steps you must take in order to retain your licence.
Where there is a serious breach indicating a significant or systematic failing, you no longer meet the eligibility or suitability requirements for holding a licence, or we consider that you constitute a serious threat to immigration control; we may decide either to suspend your licence and investigate further or to revoke your licence without prior suspension. We may suspend your licence and investigate further when there has been sustained noncompliance over a period of time, or where there have been a number of breaches which are minor in themselves but taken together indicate a serious or systematic failing. If we have grounds to believe that you constitute a serious threat to immigration control, we may revoke your licence without prior suspension.'
'Process we will follow in deciding what (if any) action to take
18.6 Unless downgrading 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 Annex 4 of this guidance. No two cases are alike and we cannot list all the circumstances in which we may downgrade your licence, limit the number of certificates of sponsorship (CoS) you are allowed to assign or take no action.'
Annex 3 sets out circumstances in which the Defendant 'will downgrade your licence to B rating, including where the Defendant is not satisfied that 'you are using a process or procedure necessary to fully comply with your sponsor duties' and where you do not send to the Defendant any requested document or information within the given time limit. Annex 4 sets out circumstances in which the Defendant 'may downgrade the licence to a B rating' including failure to comply 'with any of your sponsor duties.'
'19.3 For information on the circumstances in which we will revoke your sponsor licence, see Annex 5 of this guidance.
19.4 If any circumstances in Annex 5 of this guidance 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 will not be allowed to apply again for a sponsor licence until the end of the appropriate cooling off period 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 of this guidance.
19.6 We cannot define in which exceptional circumstances we may not revoke your sponsor licence but, when one of the circumstances listed in Annex 6 of this guidance applies, we view this as a serious matter. We will look for evidence that you have robust processes and procedures in place and have taken all reasonable steps to verify information that you are required to obtain and hold in connection with your duties under this guidance, as well as any information that you send to us.
19.7 If the circumstances in Annex 6 of this guidance arise and we believe that the evidence we have shows that you are breaching your duties and/or pose a threat to immigration control, we will suspend your licence. For more information, please see suspending a licence.
19.8 If any circumstances in Annex 4 of this guidance arise and we do not believe it is necessary to suspend your licence, we may downgrade it to a B-rating. The 'Downgrading to a B-rating' section has more information.'
Annex 5 sets out circumstances in which the Defendant 'will revoke your licence'. Annex 6 sets out circumstances in which she 'may revoke your licence.'
'Process we will follow in deciding what (if any) action to take
20.6 Where any of the criteria arise listed in Annex 6 as those which 'may' result in revocation of your licence, we will first consider downgrading your licence. However, we may decide to suspend your licence without first downgrading it. For more information, please see downgrading to a B-rating.
20.7 If we suspend your licence, the process will then continue in one of the following ways:
Process 1
20.8 Where we are satisfied that we have enough evidence to suspend your licence without further investigation, we will write to you giving reasons for the suspension.
20.9 You have 20 working days from the date of the written notification, to respond to our letter. This is your opportunity to seek a review of our decision and to set out any mitigating arguments you believe exist. Your response to us must be made in writing and set out, with supporting evidence, which grounds you believe to be incorrect and why.
20.12 Appropriate action may be to re-instate your licence with either an A-rating or a B-Rating, and/or stop you from assigning CoS and prevent the use of any assigned but unused CoS, or to revoke your licence.'
Legal authorities
'23 After summarising the facts and setting out the relevant provisions from the Guidance the judge observed that the principles applicable to the Tier 2 and Tier 4 Points Based Systems are similar and that the watchword for both is trust. He continued:
"21. The following common principles can be derived from the recent case law:
(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 [1718]).
(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)])."
'(2) The Appellant's failures to report its change of business address, and the working address of its employees, were breaches of its sponsor duties and matters giving rise to serious disquiet, not de minimis. The Guidance at Annex 6 sub-paragraphs (g) and (j) makes clear that the SSHD may in such circumstances revoke and I would for my part add that paragraph 19.6 of the Guidance likewise makes clear that it will only be in exceptional circumstances that the SSHD will not exercise the power to revoke. The evidence disclosed no exceptional circumstances. The judge concluded that the SSHD's reliance on these matters as justifying revocation was not irrational.'
He also observed at paragraph 39:
'So far as Annex 6 is concerned, revocation where that is engaged is generally to be expected in the absence of exceptional circumstances see paragraph 19.6 of the Guidance. I do not consider that it was incumbent upon the Respondent to spell out that, as was obvious, exceptional circumstances were neither relied upon nor present.'
'In addition, the absence of planning permission is relevant to the crucial issue for UKBA, which is whether an organisation, which is and was entrusted with obligations as important as those imposed on a sponsor like the Claimant, has complied, does comply and will comply with its legal obligations.'
The Annex 5 breaches
(a) Lack of planning permission
The sponsor duties
'Complying with the law
15.13 To make sure you are complying with our immigration laws, you must:
Annex 5(x) includes as a mandatory revocation circumstance:
'You do not hold, or you stop holding appropriate planning permission or Local Planning Authority consent to operate your type/class of business at your trading address (where this is a Local Authority requirement).'
Background facts
' In addition checks by our officer with Croydon Council found that a planning application made 30th March 2016 for 2A Elmwood Road to allow for the conversion of the premises to sleeping accommodation had been refused. We are therefore not satisfied that your Croydon branch is complying with the appropriate local planning regulations'
The letter then set out the provisions of paragraph 15.13 of and Annex 5(x) to the Guidance.
'In 2012 the trust was forced to move out of the Tooting premises and took up temporary residence on Elmwood Road, Croydon. We were told by the owner that it had suitable accommodation for the priests and believed him as there were (and are) residents living in that building. We saw it as a change of location of the Tooting premises rather than the opening of a new branch and as such didn't realise that further permission was required to move there.'
I would comment that in context this last sentence was probably intending to refer to the requirement to register a change in branch premises on the SMS and not to an application for planning permission and so did not directly bear on that issue.
The attached contract for the purchase of the Aurelia Road premises provided for a completion date two years from the date of exchange, which was 15th February 2017. No date was given in the letter for the proposed move to those premises.
' You state that you were informed by the owner that it had suitable accommodation and you therefore saw this as a change of location rather than a branch and were unaware that permission was required to move there. You add that you will make the relevant application for permission once you have received our feedback'
I would note that this appears to have been a misunderstanding of the response in so far as it was in fact referring to the requirement for registration of the premises on the SMS as a branch and not to planning permission.
The revocation letter continued:
'12 It is deeply concerning that you are clearly unaware of the requirement to hold the appropriate local planning regulations, further the fact that you have not even attempted to rectify this breach is astounding. Simply apologising for such a fundamental failing is unacceptable as is providing a copy of a contract for an entirely different property. Therefore we are not satisfied that this issue has been addressed.'
'There also seems to be a misunderstanding about the application that the trustees intended to make. We have already exchanged contracts to purchase 128 Aurelia Road and have applied for pre-planning meeting with the Council. The approval we were speaking of in our representations to you was for the Aurelia Road property to be put in place of the Elmwood Road (originally in Tooting).'
Submissions
Discussion
(b) Salary stated in the CoS different from the amount paid
The sponsor duties
'All migrants sponsored under Tier 2 (Minister of Religion) or Tier 5 (Temporary Worker) Religious Workers, must receive pay and conditions at least equal to those given to settled workers in the same role. This may be a traditional salary, stipend, customary offering, board and lodgings or a combination of these, but must comply or be exempt from the National Minimum Wage regulations.'
'The gross salary figure on the CoS must represent what you will pay to the migrant, gross of any tax paid (whether paid in the UK or overseas) and must include any permissible allowances and guaranteed bonuses. The total of all allowances and guaranteed bonuses paid, and included in that figure, should be entered in the 'gross allowances' box on the CoS, then broken down and detailed in the free text box that follows.'
'You assign a Tier 2 or Tier 5 CoS to a migrant and the salary stated on that CoS is different from the amount paid (including any allowances) to that migrant taking into account the salary stated on any sponsor note you have added to it.'
Background facts
'Mr Swaminathan provided our officer with copies of payslips which showed salary payments for your sponsored workers as well as the corresponding copies of your business bank statements to confirm these payments. However a review of these payslips found they did not provide any declaration of the allowance or goodwill payments that should have been received by your sponsored workers. Mr Swaminathan was not able to provide any other evidence to demonstrate that your sponsored workers were receiving their listed allowance payments and so that they were being compensated at the total rate outlined on their CoS. Furthermore as we are only able to account for the salary payments of your sponsored workers which were between £600 - £1000 per month we were unable to confirm that they were being paid in line with the National minimum wage.'
'The workers contracts, sponsorship applications and payslips will now fully account for all allowances (food, bills, accommodation etc.) in monetary terms. While the trust is exempt from the National Minimum Wage, as its workers qualify as people living and working in a religious community the value of their allowances in combination with their pay brings them above this requirement.'
'Whilst we accept that your sponsored workers are exempt from the National Minimum Wage requirement due to living and working in a religious community, you have provided no evidence to show that your sponsored workers are receiving their listed allowance payments and are being compensated at the total rate outlined on their CoS. Merely stating that your sponsored workers will fully receive their allowances is wholly insufficient and only serves to reaffirm our belief that they have not been paid their listed allowance payments and therefore the total rate outlined on their CoS. We are therefore not satisfied that this issue has been addressed.'
The letter continued at paragraph 51:
'51 We further note that the total payment figures detailed on the P60s provided for your sponsored workers are significantly less than the salary stated on their CoS. Therefore we cannot be satisfied that you are paying your sponsored workers the wage detailed on their CoS.
52 We therefore believe this is in breach of Annex 5(t) of the (Guidance) as stated above.'
'Board, utility bills and food for our religious workers were paid for by the trust but not shown in the payslips. This was not raised as an issue during your visits, neither in 2013 nor in 2008. However, in the light of the feedback provided in the suspension letter and to avoid any future confusion, all listed allowances and payments will be shown in payslips for April something that we can only really show as proof when they are issued towards the end of this month.'
Submissions
Discussion
(c) Failure to provide a hierarchy of workers
The sponsor duties
'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.'
'If we have asked you to send us a document or information and you do not send the document or information within the given time limit.'
Background facts
'However this has no effect on the overall conclusion. I can confirm that we would still have revoked the licence on the basis of one or more of the mandatory breaches and in any event on the basis of the admitted breaches which gave grounds for discretionary revocation.'
Interim observations
The decision not to downgrade the licence
The sponsor duties
a. In respect of the Elmwood Road premises paragraph 12.2 of the Guidance required:
'Your level 1 user must use your SMS account 'request changes to sponsor details' function to:
tell us about changes to your structure, such as more branches or sites, or new linked entities in the UK or overseas if you are licensed under Tier 2 '.
b. In respect of the AO section 6 included the following requirements:
'6.3 Each of your key personnel must: be a paid member of your staff or engaged by you as an office holder ....
6.8 You must give contact details for your key personnel both when applying for a licence and when changing any key personnel or adding new ones after we have granted a licence. The contact address given for each of your key personnel must be either your main address or that of any branch or head office you are including in, or have subsequently added to your licence. All email addresses you provide for all of your key personnel must be secure, personal to and only accessible by the named individual. You must also provide their National Insurance number if they have one.
6.15 When applying for a licence, you must appoint an authorising officer. The person you nominate to this role must be your most senior person responsible for the recruitment of all migrant workers and ensuring that all of your sponsor duties are met. If you do not recruit the migrants you sponsor, this role must be filled by the most senior person responsible for your activity as a licensed sponsor. If there is more than one person who could fill this role, you must decide who to nominate. You are responsible for the actions of your authorising officer so we advise that you ensure you are confident that they fully understand the importance of this role.
6.18 You must have an authorising officer in place throughout the life of your licence. The nominated person must always meet the requirements set out in this guidance. If you fail to have an authorising officer in place who meets our requirements, or fail to tell us of a change in authorising officer, we will take action against you.'
Annex 6(q) identified the following specific circumstance for possible revocation:
'You have no authorising officer in place that meets the requirements set out this guidance.'
c. In respect of the level 1 user section 6 included the following requirement:
'6.23 You must always have a level 1 user in place who is able to undertake your day to day sponsorship activities. If we find you do not have a level 1 user in place, we will take action against you. From 6 November 2014, new sponsors must ensure that you have at least one employee who is a level 1 user to ensure that you have access to the SMS and check activity. This is also best practice for existing sponsors. You may have more than one level 1 user, but at least one must be your employee. We will reject applications where you do not have a level 1 user who is an employee.'
Annex 6(g) identifies the following specific circumstance for possible revocation:
'We find that you have no level 1 user in place that is able to undertake your day to day sponsorship activities, who meets the requirements set out in the level 1 user section.'
d. In respect of the SMS password paragraph 11.6 required:
'SMS users must never give their password to anyone else. If they do, we will take action against you.'
Annex 6(g) identifies the following specific circumstance for possible revocation:
'Any of your level 1 or level 2 users disclose their sponsorship management system (SMS) password to another person.'
e. In respect of payments to sponsored migrants paragraph 24.6 provided:
'All payments you make to migrants that you sponsor under Tier 2 or Tier 5 must be made into their own bank account in the UK or overseas. You must not pay them in cash. Pre-paid cards such as FOREX are acceptable, but you must be able to give evidence that you have made payments onto the migrant's card.'
f. Annex 6 also identified the following general circumstances for possible revocation:
'(f) You fail to comply with any of your sponsor duties'; and
'(i) As a result of information available to us, we are not satisfied that you are using a process or procedure necessary to fully comply with your sponsor duties.'
Background facts
a. In respect of the Elmwood Road premises the suspension letter noted that the Claimant had not included it as a new branch on the SMS so that this was a breach of paragraph 12.2 within Annex 6(f). As set out above, in the response letter the Claimant explained that it had moved to Elmwood Road as a temporary location and as it was a change of location they did not realise that it needed to be included on the SMS. Mr Rajendran believed it to be sufficient that it was included as a work address for the sponsored workers. Paragraph 12 of the revocation letter said:
'We additionally note that you have still failed to update the SMS with details of a branch that by your own admission have been proprietors of since 2012, the fact that you have still after five years failed to make this update is incredulous.'
In the further response dated 7 April 2017 it was stated at paragraph 6:
'The charity has put the Elmwood Road address on sponsorship applications since we relocated there. As mentioned above, the inspector visited the Elmwood property in 2013. If we were trying to hide the location of where it operated that wouldn't have been the case. Mr Rajendran only used the page to add an address perhaps once or twice to add and save the Croydon address and remove the Tooting address. After this it was possible to simply select the name of the address from a dropdown menu on the application page itself and so he wouldn't get the opportunity to see the warning again. This is how a mistake can pass unnoticed for five years, both by the trust and yourselves.'
b. In respect of the AO the suspension letter had noted that Mr Rajendran was no longer an officer of the Claimant and was working as a volunteer. It also stated that the email address provided for the AO was in general use by the Claimant. As a result the requirements were not met so that Annex 6(i) and (q) were engaged. The response letter dated 20th February 2017 does not appear to have directly addressed this breach except to the extent that the proposed level 1 and level 2 officers would each have their own email address to which only that person would have access. Mr Rajendran's letter which was attached explained:
'I must take full responsibility for the breaches of the Sponsor Guidance, which was due to my improper attention to them rather than any malicious intent. Since I ceased to be a trustee of the charity, I have not kept myself appraised of the guidelines, nor did I put in place a handover plan, which was also my duty to do. Instead I sought to continue to help the charity in a limited capacity by continuing to manage the sponsorship of priests and religious workers. I now fully appreciate that I've put the charity in a precarious position, as it needs and will continue to need the ability to bring qualified priests and religious workers to the charity in order to properly serve its congregation.'
The revocation letter noted that no representations had been made in respect of these breaches and concluded that there had been breaches within Annex 6(i) and (q) as set out in the suspension letter. The further response letter dated 7th April 2017 does not appear to have added anything further specific to these breaches.
c. In respect of the level 1 user the suspension letter noted that the licence had one listed level 1 user, Mr Nagenthiram Karunaithy, whom Mr Swaminathan confirmed had stopped acting in the role in 2011. In 2012 the Claimant made an application to amend the level 1 user to Mr Seevaratnam, but this was the wrong type of request. It was refused and the Claimant was advised to submit a further add level 1 user request. This was never done so that the Claimant had no level 1 user in place to meet the licence sponsor duties in breach of paragraph 6.23, to which Annex 6(g) applied. The response letter proposed that Mr Seevaratnam should take over the post of level 1 user. The revocation letter noted the proposal for Mr Seevaratnam but observed that no change had been made. Therefore the Defendant was not satisfied that this issue had been addressed and found that there were breaches within Annex 6(f) and (i). In the further response dated 7th April 2017 Mr Seevaratnam made the point that the Claimant was awaiting feedback before making any changes.
d. In respect of the use of the SMS password the suspension letter pointed out that, as Mr Swaminathan had confirmed, since Mr Karunaithy left the role as the sole level 1 user in 2011, Mr Rajendran had been carrying out the SMS duties such as assigning CoS and reporting and it was therefore evident that they had shared the SMS log in details so that the SMS account was insecure contrary to paragraph 11.6 of the Guidance and subject to Annex 6(o). Apart from the proposal that Mr Seevaratnam become the new level 1 user, the response letter did not specifically address this issue. This was noted in the revocation letter, which confirmed the view that there had been a breach in that respect for the purposes of Annex 5(o). In the further response letter dated 7th April 2017 Mr Seevaratnam explained that the Claimant was awaiting the Defendant's approval to the proposed changes before making them as Mr Karunaithy and Mr Rajendran were not recognised as appropriate users and they did not wish to violate the rules further by their accessing the SMS account. Otherwise the further response does not appear specifically to address this issue.
e. In respect of payments to the sponsored migrants the suspension letter at paragraph 29 noted that, while it was accepted that the workers were not being paid in cash, all salary payments to sponsored workers must be into their personal bank accounts and it was therefore believed that there was a breach of the requirement in paragraph 24.5 within Annex 6(i) of the Guidance. In the response letter dated 20th February 2017 it was explained that all salary payments will be made either by direct bank transfer to the workers accounts or by cheque or prepaid cards with fully documented receipts. The revocation letter noted these representations at paragraph 44 and continued:
'However you have provided no evidence that this has been rectified and that all salary payments are now being made into your sponsored workers personal bank accounts. Further the fact that you say you will still pay your workers via cheque is not acceptable. Therefore we are not satisfied that this issue has been addressed'
The letter concluded that there was a breach for the purposes of Annex 6(f) and (i) in this regard. In the further response letter dated 7th April 2017 at paragraph 12 it was explained that the Claimant had 'resisted opening an online account as cheques provide an extra level of control over outgoing payments. However we have taken steps to open an online account and thereafter we will be able to pay everyone by direct credit into their personal bank accounts'. It is also pointed out that cheque payments had not been raised as an issue during the 2013 inspection.
'53 Given all of the above we believe that you pose a threat to immigration control.
54 We have considered the possibility of down rating your licence and issuing you with an action plan. However we will only downgrade a licence and issue an action plan where there is scope to rectify shortcomings or omissions in systems or retained documents.
55 As already stated, you have acted in contravention of Annex 5(t), Annex 5(x), Annex 5(ee), Annex 6(f), Annex 6(g), Annex 6(i), Annex6(o) and Annex 6(q) of (the Guidance). Downgrading your licence is not appropriate due to the seriousness of your non-compliance with the sponsor duties.
56 We believe that the issues described above constitute a failure to comply with your sponsor duties.
57 This contravenes Annex 6(f) and Annex 6(i) of (the Guidance) as stated above.
58 As a result your sponsor licence has been revoked with immediate effect. There is no right of appeal against this decision.'
Submissions
Discussion
'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. We place great weight on the importance of trust in the operation of the sponsorship system, and the need to ensure that sponsors take their duties seriously.'
The Guidance went onto to set out the consequences of non-compliance, including:
'We may suspend your licence and investigate further when there has been sustained non-compliance over a period of time, or where there have been a number of breaches which are minor in themselves but taken together indicate a serious or systematic failing.'
The Alleged failure to provide the hierarchy of workers
Submissions
Discussion