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Employment Law

Legal guidance - compliance - software

Veale Wasborough Vizards , 05 AUG 2016

Protect your Tier 2 Sponsor Licence: Compliance with the Sponsor Guidance

Protect your Tier 2 Sponsor Licence: Compliance with the Sponsor Guidance

Judith Hockin
Veale Wasbrough Vizards

Datamatics UK Ltd v Secretary of State for the Home Department is a useful reminder of the importance of complying with your duties as a Tier 2 and 5 Sponsor Licence Holder.

The facts

Datamatics UK Ltd (Datamatics) held licences under Tiers 2 and 5 of the Points Based Sponsor Guidance, which were issued by the Secretary of State for the Home Department (the Defendant), which allowed Datamatics to sponsor non-EEA nationals to work in the UK.

The Defendant's compliance officers visited Datamatics' premises and interviewed Mr Ghandi, the director of the company, and four employees to whom Datamatics had issued Certificates of Sponsorship (CoS).

When asked how Datamatics sends its consultants to third parties the Director replied, "Some clients ask for job roles, some ask for projects to be completed and others just ask for staff numbers to be sent." Furthermore one of the employees, Mr Ghosh, who was yet to be allocated work also indicated in interview that once he found work with one of Datamatics' clients, he would be deployed to that client's premises and the client would direct his duties.

Based on the information gathered in the interviews and after reviewing copies of Datamatics' contracts with clients, the Defendant concluded that Datamatics' was in breach of the Sponsor Guidance by:

  • operating as an employment agency/business and supplying migrants that the company was sponsoring to third parties as labour;
  • assigning Mr Ghosh a CoS for a role that was not genuine and providing false information in this respect; and
  • breaching its sponsor duties by making a number of failures to report in respect of specific sponsored workers.

Datamatics' sponsor licence was suspended with immediate effect. They made representations, including stating there was a misunderstanding, although admitting Datamatics had made errors in reporting. The Defendant revoked Datamatics' Tier 2 sponsor licence and Datamatics applied for judicial review.

The High Court's decision

Datamatics argued that the decision to categorise Mr Ghosh as an agency worker was wrong in law. The High Court dismissed this argument and concluded that this question involved a high degree of judgment from the Defendant and was not a matter for the Court to determine.

Datamatics also failed to convince the Court that the test of who is an agency worker under the Sponsorship Guidance is the same as the test under regulation 3 of the Agency Worker Regulations 2010.

The Court concluded that the Defendant's decision that there was a breach of the Sponsor Guidance was lawful. Based on the evidence before it and the lack of evidence that Mr Ghosh would be working on specific projects under the control of Datamatics, the Defendant's conclusions "were in no way unreasonable and entirely justified".

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The Court also rejected the argument that the Sponsorship Guidance is in breach of section 55 of the Borders, Citizenship and Immigration Act 2009 for failing to impose a duty on the Defendant to consider the effects of a decision on children. The Court stated that section 55 is an overarching duty and there would be limited circumstances where this issue would arise in the context of the Sponsorship Guidance and the impacts or effects of a decision on children were not brought to the Defendant's attention by Datamatics in its representations.

The High Court therefore dismissed Datamatics' claim.

Best practice

Employers with sponsor licences should ensure compliance with the Sponsor Guidance. The sponsor must be whoever has full responsibility for the duties, function and outcomes or outputs of the job.

Any job offered to a Tier 2 migrant must exist and be genuine when the Tier 2 Sponsor assigns a CoS for that job. Falsifying information is also a breach of the Sponsor Guidance which can lead to the revocation of a licence.