Employers and Sponsor Licensing - severe consequences of refusal / revocation
On 29 February 2008 the UK Border Agency opened the Register of Licensed Sponsors to employers wishing to issue Certificates of Sponsorship to migrants.
Certificates of Sponsorship will replace the current work permit system in its entirety when Tier 2 of the Points Based System goes live. The Agency currently anticipates that this will be in Autumn 2008. Employers who do not appear on the register will not be able to sponsor migrant workers.
Two months on and the publicly viewable Register has not appeared on the Agency website, the conclusion being that thus far of the 60,000 or so employing entities the Agency is expecting to apply, none have been accepted onto the Register.
The application requirements and processes for the Register can be found at www.bia.homeoffice.gov.uk/employers/points/
Among other things the requirements include the signing of a declaration by the Authorised Officer of the prospective Sponsor agreeing to the following: -
“I understand that if I do not comply with the rules of the sponsor licensing system I may lose my licence and be removed from the Register of Licensed Sponsors, and that this would mean that I could no longer sponsor overseas nationals (other than nationals of the European Economic Area (EEA) and member states) seeking to come to the United Kingdom (UK), to work or study with me. Border & Immigration Agency will also curtail leave of any existing non-EEA migrant workers or students under Tiers 2 to 5 of PBS.”
(The above is a direct quotation from the Agency’s website).
The declaration also authorises the Agency to enter into the employer’s premises unannounced to conduct compliance visits and permits the Agency to share any information provided by the employer with all other government departments.
One of the numerous problems is that presently the “rules of the sponsor licensing system” are not fully available because, whilst the Guide to Sponsor Licensing has been published, the detailed guidance on how to issue a Certificate of Sponsorship has not been. Employers cannot possibly know if they can fully comply with the rules at this time.
Additionally the Guide to Sponsor Licensing states that the Agency will conduct checks on the HR systems to asses if the employer can comply with the rules, including the following requirement to report to the Agency within 10 working days any migrant who: -
• fails to turn up for work, or
• is absent for more than 10 working days without the Sponsor’s reasonably granted permission, or
• has a significant change in job or salary, or
• ceases to be sponsored, or
• causes the employer to suspect that her or she is breaching the conditions attached to their leave.
In theory this means that if a senior manager of a company has an informal chat with a migrant employee / friend over a drink after work and is told by that employee in confidence that he or she is thinking of applying for an HSMP visa in place of their Tier 2 sponsored status to enable them to, for instance, undertake some self employment activity outside office hours, and that senior manager fails to report that discussion to the HR function to trigger a report to the Agency, the employer could, if that conversation subsequently comes to light, lose its licence and be prevented from sponsoring any other migrant, or they could be down graded to a ‘B’ ranking.
The removal of a company from the Register of Licensed Sponsors or the downgrading to a ‘B’ ranking and the associated stigma will have severe consequences not only for the company in terms of share value, damage to reputation and the loss of the ability to attract to the UK the very best graduates and employees from around the world. In addition the perfectly innocent sponsored migrant employees of any company which loses its licence will face having their leave curtailed. If leave is curtailed and the migrant fails to depart from the UK within the specified time-frame, perhaps because he or she has children sitting ‘A’ levels etc, the migrant will be subject to a mandatory ban from returning to the UK of at least 12 months under the General Grounds of Refusal which were also brought out on the 29 February 2008 (see our articles on this topic as follows):
General grounds for refusal - changes in the immigration rules HC321
No return rule - those in UK now not affected if they go home before October
Concession re no return rule - advice is essential
New entry clearance guidance notes cover concession of 17 March 2008
Gherson is aware that employers are having difficulty in persuading senior managers to accept the role of Authorised Officer with overall responsibility for the scheme because of the concerns as to personal liability and risks of prosecution if illegal employees are found to be working at the premises. Senior staff are reporting concerns that no matter how good a company’s HR function is, they cannot guarantee innocent mistakes will not happen and they do not want to be personally responsible if the company incurs a fine of up to £10,000 per illegal employee or if the company loses its licence.
This is happening against the back drop of a dramatic increase in the number of employers being prosecuted for hiring illegal immigrants. As the BBC reported on 5 May 2008, 137 firms have been caught employing staff illegally since the change in the law imposing these penalties was implemented at the end of February 2008. Fines approximating £500,000 have been ordered.
Gherson is presently advising a number of PLCs and employing entities about the scheme, including pre-application employee audit and HR function compliance matters.
Nichola Carter has recently joined Gherson as a partner to head up the corporate and general immigration team and has brought with her over a decade’s experience in advising employees on immigration matters.
