Scottish Court of Session Decisions

OUTER HOUSE, COURT OF SESSION

[2016] CSOH 161

P256/16

OPINION OF LORD MALCOLM

In the petition of

EXPERIENCE INDIA LIMITED

Petitioner

against

THE SECRETARY OF STATE FOR THE HOME DEPARTMENT

Respondents

Petitioner:  Bryce;  Drummond Miller LLP

Respondent:  MacIver;  Office of the Advocate General

11 November 2016

[1]        Experience India Limited (the petitioner) operates a group of restaurants under the name “Cook and Indi’s World Buffet”.  This application for judicial review concerns a decision made on behalf of the Secretary of State for the Home Department  to revoke the petitioner’s tier 2 licence to employ overseas workers.

[2]        Since November 2008, any employer wanting to employ non‑EEA nationals in the United Kingdom has to obtain a sponsorship licence from the Home Office.  This replaces the previous system of work permits.  It is not subject to legislation, but rather to departmental guidance.  A sponsor is entitled to allocate Certificates of Sponsorship (CoS) to sponsored overseas workers according to job descriptions specified in a standard occupation code (SOC), such as quality control manager, duty manager, IT consultant, and so on.

[3]        Officers on behalf of the Secretary of State undertook unannounced compliance inspections of the petitioner’s business on 6 August 2015.  Three restaurants were visited at which the local managers were questioned.  Thereafter the officers arranged a meeting with the petitioner’s authorising officer to take place on 25 August 2015.  In advance of the meeting he was advised that the officers wished to interview eight sponsored workers.  On 24 August the officers were informed that seven of them were being made redundant with immediate effect.  As a result they were not available for interview.

[4]        On 23 October 2015 an officer on behalf of the Secretary of State wrote to the petitioner suspending its licence and setting out the reasons for doing so.  The petitioner was afforded 20 working days in which to respond.  Certain representations and a number of affidavits were forwarded by the petitioner.  On 8 February 2016 an officer issued a decision letter revoking the licence.  It is that the decision which is the subject of the present challenge. 

[5]        The petition contains considerable detail on the circumstances surrounding the decision.  It is accompanied by a number of productions, including the representations, the affidavits, and correspondence concerning the redundancies, along with other material.  That said, given the way in which the case was ultimately presented on behalf of the petitioner, I consider that, subject to the discussion below, it is not necessary to recount the nature and contents of all this material.

[6]        The petitioner’s complaint raises a number of issues as to the proper approach to the respondent’s guidance concerning such licences and their revocation.  These issues can, in the main, be discussed and resolved at a relatively high level of generality.  Both parties submitted that the law was correctly summarised by Haddon-Cave J in Re (Raj and Knoll) v Secretary of State for the Home Department [2015] EWHC 1329 (Admin) at paragraphs 20-22 and 46.  In summary, the essence of the system is that the Secretary of State places a high degree of trust in those granted licences in implementing and policing immigration policy.  The licence holder’s authority to grant a certificate is a privilege which carries considerable responsibilities, which are to be carried out with rigour and vigilance.  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.  The courts respect the experience and expertise of her officers from the Borders Agency when reaching conclusions as to compliance with the guidance.  Compliance is necessary to ensure that there is effective immigration control.  Haddon‑Cave J referred to observations of McGowan J in London St Andrews College v Secretary of State for the Home Department [2014] EWHC 4328 (Admin) at paragraph 36:

“It must be understood that the grant of (sponsor) status is a fragile gift, constant vigilance about compliance is a minimum standard required for such sponsors.  The burden of playing an active role in support of immigration control is a heavy one.  The SSHD is entitled to review purported compliance with a cynical level of supervision.”

[7]        The decision to revoke the petitioner’s licence was based on seven separate grounds.  For example, in relation to one sponsored worker it was concluded that he did not meet the skill level requirements set out in the guidance;  he had been assigned a CoS for a vacancy which was not genuine;  and the role undertaken by him did not match the job description in the CoS.  In summary, the “genuine vacancy test” was not met.  Similar concerns were expressed in respect of eight other workers ‑ see grounds 2‑ 4.  The fifth ground concerned a number of workers said to be paid less than the rates specified in their CoS.  Ground 6 involved the petitioner’s reporting duties, and in particular a failure to notify that a new head office had been opened at which some of the sponsored workers were placed.  The seventh ground as specified in the suspension letter was not insisted in as a basis for revocation.  The eighth ground concerned a failure of the petitioner to act honestly in his dealings with the Secretary of State, being a reference to the fact that the day before the aforesaid meeting sponsored workers had their employment terminated with immediate effect.  In terms of the relevant guidance, almost all of the above were mandatory grounds for revocation.

Submissions for the Petitioner
[8]        The primary complaint of the petitioner centres on the conclusion that a number of the petitioner’s sponsored workers had not been allocated to genuine vacancies, in the sense of vacancies which could not be filled by a British or EEA worker.  The submission was that, on a proper interpretation of the relevant guidance, the genuine vacancy test cannot be breached by anything short of intentional deception on the part of the licence holder.  It was said that there is no evidence of such in the present case.  The petitioner had retained and exhibited all the documentation which the guidance required.  It was “irrational and unreasonable” to fail the petitioner under the genuine vacancy test on the basis of a failure to produce evidence which the petitioner was neither required nor reasonably expected to possess. 

[9]        The guidance presupposes an exercise of discretion by a licence holder.  Unless it can be shown to have acted dishonestly, it cannot be in breach of the genuine vacancy test.  The selection of an SOC code is “an art, not a science”.  Paragraph 15.14 of the guidance suggests a need for intentional conduct, carried out knowing that the terms of the licence were being breached.  It could not be any other way, since judgment and discretion is required in the marrying up of the job to the specific SOC.  A malicious purpose is required;  in other words deliberate conduct making it appear that the requirements are met when they are not, all to enable a migrant to come to the UK for a non‑existent position, or to tailor job requirements to exclude resident workers.

[10]      It was submitted that there cannot be a breach of the genuine vacancy test simply because the respondent, upon inspection, concludes that in her opinion the job carried out by the sponsored worker does not correspond to the code in the CoS.  Paragraph 15.18 of the guidance requires that a sponsor “guarantee” that the job is a genuine vacancy.  However no sponsor can guarantee that his assessment of the match between a job and an SOC will be the same as that of some unknown future compliance officer.  All he can guarantee is the absence of an intention to deceive.  Where such intent is absent, or not established, the respondent has tools other than revocation for policing the SOC boundaries, such as producing good practice guidance.  It is irrational and unreasonable to draw adverse inferences from an inability to produce documentation which does not require to be created or kept.

The Respondent’s Submissions
[11]      The petitioner is wrong in asserting that dishonesty is a requirement for revocation, regardless of which ground is founded upon.  There are a number of grounds of mandatory revocation as per annex 5 of the guidance.  Only some of them relate to deception.  At paragraph 17.18 the guidance is clear that incompetence is sufficient for revocation.  The sponsor guarantees the matters at paragraph 15.18, including that the jobs for which it issues a CoS are genuine vacancies within the meaning of the guidance.  The word “guarantee” demonstrates that dishonesty is not a requirement of revocation.  It is a mandatory ground of revocation if a sponsored worker is allocated a position which does not meet the genuine vacancy test.  That is a question of fact.  The court should be slow to interfere with such decisions.  The petitioner was not being penalised for a failure to produce documents. 

Analysis
[12]      In my opinion the Secretary of State’s submissions are to be preferred.  It would place too high a burden on her if deliberate dishonesty had to be established.  While no doubt often there will be at least an inference of dishonourable conduct, in my view revocation is not only available, but mandated, so long as the decision‑maker is satisfied as to an annex 5 ground.  For example, if a sponsored worker is allocated a job which is not a genuine vacancy, there has been a breach of the guarantee undertaken by the licence holder.  The respondent does not have to show that this was caused by deliberate dishonesty, as opposed to carelessness, incompetence, or some other reason. 

[13]      This is consistent with the main theme of Haddon-Cave J’s remarks mentioned earlier.  The licence holder is trusted to and undertakes to comply with the guidance, including that sponsored workers are only allocated to genuine vacancies.  The guarantee is not limited to an absence of dishonesty or bad faith.  The “light trigger” referred to earlier reflects the right to take action once the Secretary of State is satisfied that the licence holder’s responsibilities are not being carried out with the necessary rigour and vigilance.  The decision‑maker is the Secretary of State.  However, the implication of the petitioner’s submission is that a bona fide disagreement on the merits of the issue would be a defence.  

[14]      By way of elaboration, and turning to the guidance, to ensure compliance with immigration laws a licence holder must not assign a CoS where there is no genuine vacancy or role which meets the tier 2 criteria (see paragraphs 15.12/13).  A genuine vacancy is one where the duties and responsibilities for the job meet the requirements of the tier and category, and do not include dissimilar and/or lower skilled duties.  Annex 5(ag) makes it clear that revocation will follow if the role undertaken by the migrant does not match the job description in the relevant SOC or in the assigned CoS.  None of this affords a licence holder a defence if the respondent does not make a specific finding of dishonesty.  In a sense it is “an offence” of strict liability.  The licence holder has guaranteed certain things, and it “must” fulfil them in order that immigration law is met.  It is true that examples are given in the guidance which clearly involve an element of deliberate deception, but these are not exhaustive, nor do they expressly or impliedly circumscribe the respondent’s powers.

[15]      The reasons for the revocation of the petitioner’s licence were fully set out in the decision letter of 8 February 2016.  It is not necessary to rehearse its terms in any detail.  By way of illustration, ground 1 related to a sponsored worker, Mr T.  The job description in his CoS was set out, as was the evidence submitted as to his work duties.  A comparison of the two resulted in the conclusion that the role undertaken by him was not a genuine vacancy.  It was not necessary for there to be a further deliberation as to the reasons for this, and in particular whether it was or was not the result of deliberate dishonesty on the part of the petitioner.

[16]      Some evidence was submitted after the suspension letter, for example from Mr K in respect of ground 2.  It was taken into account, but was not persuasive.  Similar comments can be made regarding the affidavits from Mr G and Mr K as to ground 3.  It was noted that the petitioner had not provided any evidence to support the new statements.  In the case of ground 3, a specific finding of deception and false representations was made (paragraph 60).  In relation to ground 4, the various explanations tendered on behalf of the petitioner were rejected as not being credible.  Reference was made to “scant evidence” to verify the work carried out by Ms R.  “We would expect your client to provide substantive evidence of work undertaken by someone in the role of HR manager since May 2014” (paragraph 91).  Similar comments can be made in respect of the appraisal of Mr S (paragraphs 92/4).

[17]      These are but examples, and, to my mind at least, demonstrate no error on the part of the Secretary of State.  At paragraph 105, in relation to all the workers involved in ground 4, it was stated that “the job descriptions have been inflated in order to make it appear that they meet the requirements of the tier and category when they do not”, and furthermore that the petitioner had “made false representations in the issuance of the CoS for these roles.”  In paragraph 108 mention is made of the provision of “false information in order to circumvent the immigration rules.”  Thus if deliberate conduct is required, it was found to be present in respect of at least some of the complaints. 

[18]      It follows that I do not uphold the submission as to an alleged flaw regarding the Secretary of State’s overall approach.  This is sufficient to dispose of the petition since the other complaints are either subsidiary aspects of the main challenge or do not entrench on the bulk of the grounds of revocation.  However I will make some brief observations upon them.

[19]      It was submitted that it was “irrational and unreasonable” to fail the petitioner on the basis of non‑production of documentary evidence which the petitioner is not specifically required to maintain.  In my view this complaint is based on a false premise.  The absence of documentation in support of the petitioner’s position was commented upon in the context of the reasoning as to why the petitioner’s explanations and responses to the issues set out in the suspension letter were rejected.  It was not the ground of revocation.  The basis of failure was that summarised earlier, all in accordance with the relevant guidance, for example disparities between the CoS and the duties undertaken by sponsored workers.

[20]      With reference to the complaint concerning the redundancy of the workers subject to the interview with compliance officers, it was submitted that there was no basis for any view that the redundancies were not genuine and the timing not coincidental.  However, I agree with the submission of the Secretary of State that the essence of this ground was a failure to deal with her officers in the manner expected of a licence holder, namely in good faith and in a co‑operative manner.  Nothing was done to facilitate the interviews, for example by delaying the redundancies for a day, or by warning that the meetings should be accelerated.  As McGowan J observed (see earlier), the licence holder must play an active role in supporting immigration control.  The reference to dishonesty is to be understood in this context. 

[21]      The petitioner criticised the comment at paragraph 107 of the decision letter that the affidavits were not considered to be evidence of work undertaken.  This requires to be read in its context.  Clearly the affidavits were taken into account and treated as adminicles of evidence put forward by the petitioner.  The meaning of the comment was that, when looked at along with everything else, including the answers given during the inspections and the absence of supporting documentation, the affidavits were not regarded as persuasive rebuttals of the concerns set out in the suspension letter.

[22]      There was a wholly separate submission in relation to one of the grounds of revocation, namely that based upon the underpayment of certain employees.  This allegation was set out in the suspension letter.  The petitioner submitted certain documentary evidence in response.  The revocation decision included certain calculations of the earnings of two of the sponsored workers.  The petitioner criticises these calculations.  Had it been aware of them before revocation, it could have provided alternative calculations based upon hourly rates, as opposed to an annualised apportionment of each worker’s earnings.  In the course of these proceedings the petitioner lodged a written response to the calculations.

[23]      The petitioner pointed to paragraph 20.10 of the guidance which provides that if the Secretary of State identifies any additional reasons for suspension of the licence during the period for responding to an initial suspension letter, the licence holder will be afforded another opportunity to respond.  The petitioner’s complaint is that a failure to allow for a response to the aforesaid calculations is in breach of this guidance and amounts to procedural unfairness which justifies the current challenge.

[24]      In response it was stated that, notwithstanding the revocation letter, the petitioner was given an opportunity to provide any further information on this point, but declined to do so.  Be that as it may, I agree with the submission that this challenge, even if otherwise valid on its merits, would not be a ground for reduction of the decision, since it relates to only one of several grounds, each of which mandated revocation.  In any event it is not obvious to me that the calculations in the decision letter did amount to “additional reasons” within the meaning of paragraph 20.10 of the guidance.  The reason for the challenge remained that of underpayment of certain workers.  Presumably it will be common for the revocation letter to refer to and respond to factual information provided in response to the earlier suspension.  The process cannot be delayed indefinitely by continuing disputes as to the facts.

[25]      For completeness, in the petition reference was made to an alleged breach of Article 1, Protocol 1 of ECHR.  However in the written submissions it was mentioned only in terms of reinforcement of the record‑keeping issue, and was not pressed at the oral hearing.  Standing back, and looking at the overall picture, the petitioner’s position amounts to little more than a disagreement with the decisions taken on behalf of the Secretary of State. 

Decision
[26]      For the above reasons I shall repel the petitioner’s first and second pleas in law, uphold the Secretary of State’s second plea in law, and refuse the application for reduction of the revocation of 8 February 2016.