When a business has been acquired, undergone a merger, or has been restructured, the process of maintaining compliance with UK immigration law becomes a top priority, especially if your workforce includes sponsored migrant workers.
In this blog, we will outline the key steps and timelines for managing your Sponsor Licence after a company takeover.
1. Understand the impact of the takeover on your Sponsor Licence
When company undergoes restructuring or sale/purchase, the sponsorship duties do not automatically transfer to the new owner and/or new legal entity.
The action points you need to consider would depend on the structure of the transaction. Some pointers are listed below:
- Same Business Entity: If your business remains the same legal entity after the takeover or merger, you can simply update your existing sponsor licence by reporting the change.
- New Business Entity: If the takeover creates a new legal entity (for example, after a full acquisition), the new company will need to apply for a new sponsor licence to continue sponsoring migrant workers.
- TUPE Transfer (Transfer of Undertakings – Protection of Employment): If employees from the acquired company are being transferred under TUPE, the new employer will likely need to take over sponsorship duties for migrant workers.
2. Notify the Home Office Within 20 working days
When there are significant changes to the business (such as a takeover, merger or restructuring), the Sponsor must notify the Home Office via the Sponsor Management System (SMS) within 20 working days. This includes changes to the company’s structure or legal entity. Failing to meet this deadline can lead to non-compliance issues. Failing to notify the Home Office promptly can lead to serious consequences, including fines, penalties or even revocation of your sponsor licence. The new owner/legal entity either applies for a new Sponsor Licence or, if already holding a licence – reports a change within 20 working days.
3. Manage your sponsored employees
If your business inherits sponsored employees from the previous company, you need to ensure a smooth transition for them.
If the new company holds a sponsor licence, they must assume sponsorship duties for any existing workers to avoid breaching immigration rules.
If the new company does not have a licence, they must act quickly to apply for a new one. Any delay in the process could impact your ability to sponsor migrant workers, so early planning is crucial.
If the employees are transferring to the new company under TUPE, you must notify the Home Office and transfer their sponsorship to the new licence (if applicable) by making the necessary reports on each organisation’s licence within 10 working days of the change.
Provided their duties remain the same, the new employer does not need to assign a new Certificate of Sponsorship to the employee, and they do not need to submit a Change of Employment application to the Home Office.
Conclusion
When your business is acquired, the sponsor licence process becomes a critical factor in managing your workforce, especially for migrant employees. Always consider seeking professional advice if you are unsure about the process or want to streamline your application.
How Gherson can assist
Gherson’s Immigration Team are highly experienced in advising on UK visa matters. If you have any questions arising from this blog, please do not hesitate to contact us for advice, send us an e-mail, or, alternatively, follow us on X, Facebook, Instagram, or LinkedIn to stay-up-to-date.
The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Gherson accepts no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please do not hesitate to contact Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.
©Gherson 2024