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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 >> Raj And Knoll Ltd, R (On the Application Of) v Secretary of State for the Home Department  EWHC 1329 (Admin) (14 May 2015)
Cite as:  EWHC 1329 (Admin)
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QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
| THE QUEEN on the application of
RAJ AND KNOLL LIMITED
|- and -
|SECRETARY OF STATE
FOR THE HOME DEPARTMENT
Ashley Serr (instructed by The Treasury Solicitor) for the Defendant
Hearing dates: 11th & 12th March 2015
Crown Copyright ©
See: Order at bottom of this judgment.
MR JUSTICE HADDON-CAVE:
UKBA visit on 30th September 2013
Suspension letter dated 15th May 2014
(1) A failure to retain the required evidence to confirm that an RLMT had been undertaken in accordance with the Guidance (paragraph 2).
(2) The fact that Mrs Patel had told the compliance officer that the Claimant did not retain any copies of qualifications, shortlists or interview records relating to the recruitment of sponsored workers (paragraphs 3-5).
(3) The fact that the Claimant did not provide any evidence of the right to work in the UK of a Mr Vija Chakkalakkal Joy and Home Office Records showed that he did not have the right to work or remain in the UK; and as a result the Claimant was employing Mr Joy when he had no valid leave to remain or work in the UK (paragraphs 6-7).
(4) The fact that the Claimant did not include a Mr Arthur Fortes on the spreadsheet used by the Claimant to monitor expiry dates (paragraph 8).
(5) The fact that all the CoS assigned by the Claimant showed "79 Hythe Road" as the working address but Mrs Patel admitted that the Claimant had never worked at that address and, anyway, that business had been sold in 2013.
"12. To give you the opportunity to explain the above before we begin the revocation action, we are allowing you 20 working days to make representations, including submitting evidence, in response to the issues raised in this letter. If you fail to make representations or to adequately address the issues within this time, your licence will be revoked and you will no longer be able to sponsor employees." (emphasis added)
Revocation letter – 16th June 2014
"Dear Mrs Patel,
REMOVAL FROM THE TIER 2 REGISTER OF LICENSED SPONSORS:
RAJ AND KNOLL LTD
1. I refer to previous correspondence of 15 May informing you that your sponsor license had been suspended as a result of issues identified during a visit to your premises on 18 March.
2. You were given 20 working days to make representation against this decision, which you responded to on 30 May.
3. Having considered all the available evidence along with the accompanying documents you have submitted, we have decided to revoke the sponsor licence for the reasons listed below:
Failure to retain evidence of Resident Labour Market Test (RLMT)
11. We are not satisfied that you have adequately demonstrated compliance with the RLMT. Annex 5 ac) states we will revoke your licence if:
If we have asked you to send us any documents or information and you do not send the documents or information within the give time limit.
Failure to report change of business and location of employee
17. We are not satisfied that you have adequately addressed the reason for not reporting the correct working at address of your sponsored workers. Annex 6 g) and j) of the Tier 2 and 5 Sponsor Guidance states we may revoke your licence if:
g) You fail to comply with any or all of your sponsor duties
j) As a result of information available to our compliance officers, we are not satisfied that you are using the processes or procedures necessary to fully comply with your sponsor duties.
20. In light of the above, we are not satisfied that you have adequately addressed to sponsor employees or issue further CoS. Section 3 paragraphs 19.9 – 19.14 of the Sponsor Guidance provide information relating to your existing sponsored employees."
"You have now been given a third opportunity to address all our concerns. You have submitted no additional evidence to demonstrate [the Claimant] has addressed all the issues identified in our letter of 16 June, therefore the issues contained in this letter and the decision still apply."
The Legislative and Policy Framework
The Tier 2 Scheme
"What is sponsorship?
1.1 Sponsorship is based on two principles;
a) Those who benefit most directly from migration (employers, education providers or other bodies who are bringing in migrants) should play their part in ensuring the system is not abused.
b) We need to make sure that those applying to come to the UK for work or study are eligible and that a reputable employer or education provider genuinely wishes to take them on.
1.3 Sponsorship plays two main roles in a migrant's application for permission to come to, or remain in the UK to work or study:
a) It provides evidence that the migrant will fill a genuine vacancy that can't be filled with a suitable qualified or skilled settled worker, or that they will be studying for an approved qualification.
b) It involves a pledge from the sponsor that it accepts all of the duties expected when sponsoring the migrant.
2.8 We will monitor your ability and willingness to always comply with your duties. We will:
a) set a limit on the number of certificates of sponsorship (CoS) you can assign
b) visit you, to check you are complying with your duties
c) refer cases for civil penalty action, or possible prosecution if we find evidence that you may have employed migrants illegally.
For more information on sponsor duties, please see sponsor duties.
2.9 Throughout the validity period of your license we will 'rate' you as either A or B according to our assessment of your ability to comply with your sponsor duties. If you are B-rated you must meet a time-limited sponsorship action plan, which you must pay for and which will set out the steps you need to take to gain or regain an A-rating. If you do not meet the requirements of your action plan we will revoke your licence. For more information on ratings, please see rating sponsors.
2.10 You have a duty to act honestly in any dealings with us. This includes, for example, not making false statements and ensuring all essential information is disclosed when either applying for a sponsor licence or assigning or applying for a certificate of sponsorship (CoS).
2.11 If we believe you have not complied with your duties, have been dishonest or pose a threat to immigration control, we will take action against you. The action can 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 can assign. For more information on the action we may take and the processes we will follow in such cases, please see what will happen if I don't comply with my sponsor duties.
14. Sponsor duties
What are my duties as a licensed sponsor?
14.1 As a licensed sponsor you will benefit directly from migration and we expect you to play your part in ensuring that the system is not abused. This means that you must fulfil certain duties. Some of these duties apply to all sponsors, whilst others are specific to those licensed under certain tiers or categories. The objectives of these duties are to:
a) prevent abuse of assessment procedures
b) capture early, any patterns of migrant behaviour that may cause concern
c) address possible weaknesses in process which can cause those patterns
d) monitor compliance with Immigration Rules.
15. Duties that apply to sponsors in all tiers
Record keeping duties
15.1 You must keep the following records or documents, and make them available to us on request: (See also, Appendix D – record keeping)
15.2 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.
15.6 You must report certain information or events to us using the Sponsor Management System (SMS), within any time limit set. For more information on the SMS, please see what is the sponsor management system. Any information reported about a migrant's non-attendance, non-compliance or disappearance will be used to take enforcement action against them. If you are reporting any of the events in paragraphs a), b) or c) below, you must include the last recorded residential address and contact telephone number for the migrant, and any personal email addresses you have for them.
15.7 You must report the following within 10 working days:
d) If there are any significant changes in the sponsored migrant's circumstances, for example:
- a promotion or change in job title, or core duties, other than those which need a change of employment application; For more information, please see change of employment;
- a change of salary from the level stated on the CoS, other than changes due to annual increments or bonuses;
- a change of salary from that stated on the CoS due to maternity, paternity or adoption leave, or a period of long-term sick leave lasting one month or longer;
- the location they are employed at changes (including where a sports player moves on loan).
What will happen if I don't 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.
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 CoS you are allowed to assign. We may issue a civil penalty if you have broken the rules on illegal working. More information on the penalties for employing illegal workers is available on our pages on the GOV.UK website at www.gov.uk/government/publications/prevent-illegal-working-in-the-uk.
18. Downgrading your licence rating
18.1 If we believe you are not complying with your duties, have been dishonest or pose a threat to immigration control, we may revoke your licence or downgrade it to a B-rating.
Process we will follow in deciding what (if any) action to take
18.6 Unless revocation 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 Annexes 3 and 4. No two cases are alike and we can't list all the circumstances in which we will revoke your licence, suspend your licence, downgrade your licence, limit the number of CoS you are allowed to assign or take no action. We consider:
a) The seriousness of your actions and harm done. We will treat seriously anything you have done or failed to do that resulted in migrants going missing.
b) Whether your actions are part of a consistent or sustained record of non -compliance or poor compliance, or are a single event.
c) Any action you have taken to minimise the consequences of what you have done or failed to do. For example, it may help if you tell us quickly that migrants you are sponsoring have stopped turning up for work. If an individual member of your staff is responsible for the problem, we will take into account any action you have taken against that person. We will treat the situation more seriously if you were involved in the actions of your staff or you deliberately ignored what they were doing.
d) Any civil penalties you have been issued with for an "offence" listed in Appendix C unless we withdrew the penalty or cancelled it on appeal.
Can my licence be revoked after it has been granted?
19.1 Certain circumstances can lead to your licence being revoked. If this happens it will be revoked in all the tiers, categories and sub-categories which you are licensed under.
19.2 If we revoke your licence and you are an endorsing body under the Tier 1 (Graduate Entrepreneur) scheme, we will withdraw you from that scheme. Any migrant you are endorsing will have their leave reduced to 60 days. This is to allow them to seek another route under which they can remain in the UK. If they have been unable to do this after the 60 days they must leave the UK or face enforced removal.
19.3 For information on the circumstances in which we will revoke your sponsor licence, see annex 5.
19.4 If any circumstances in annex 5 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 won't be allowed to apply again for a sponsor licence for a period of six months 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.
19.6 We can't define in which exceptional circumstances we may not revoke your sponsor licence but when one of the circumstances listed in annex 6 applies, we view this as a serious and will look for evidence that you were either not responsible for what happened or, if you were, you took prompt action to remedy the situation.
a) one of your employees was wholly responsible for the dishonesty and was dismissed when it came to light; or
b) a migrant was paid the wrong salary because of a problem with your payroll system but this was put right as soon as possible.
What happens to my sponsored migrants if my licence is revoked?
19.9 If we revoke your licence, we will:
a) Immediately end (curtail) the permission to stay in the UK, or worker authorisation of any migrants whom we believe were actively involved (complicit) in any dishonesty (for example, if the migrant agreed that you would arrange a non-existent job for them so they could come to the UK)
b) reduce the length of the worker authorisation, or permission to stay in the UK of any other migrants (those who were not actively involved) to 60 calendar days. This is to give them a chance to find a new sponsor. If the migrant has less than 60 days of their leave or worker authorisation remaining, we won't reduce it.
If my licence is revoked, can I apply again?
19.15 Once your licence has been revoked you can't make a further application for a sponsor licence for a period of six months from the date your licence was revoked. If you do make an application before that six month period has passed, it will be refused. The only exception to this is if your licence was revoked in error. If this happens we will contact you to make arrangements for it to be reinstated.
28. Resident labour market test
Resident labour market test - Tier 2 (General)
28.1 The resident labour market test is there to protect the settled workforce and means that you must advertise the job you want to recruit for to give settled workers a chance to apply. You can only recruit a migrant if:
a) you have completed a resident labour market test and can show that no suitable settled worker is available to fill the job, or
b) the job is exempt from the resident labour market test.
How to carry out the resident labour market test - Tier 2 (General)
28.16 Unless an exemption applies all jobs must be advertised to settled workers for 28 calendar days. For more information on exemptions, please see exemptions from the resident labour market test. You can advertise jobs in two ways:
a) Advertise the vacancy for a single continuous period, with a minimum closing date of 28 calendar days from the date the advertisement first appeared.
b) Advertise the vacancy in two stages, with each stage being advertised for no less than 7 calendar days but where both stages total a minimum of 28 calendar days. For example, you could at first advertise the vacancy for 14 calendar days and appoint any suitable settled worker who applies. If no suitable settled worker applies, you can't appoint a migrant worker at this stage as you must advertise the vacancy for a further 14 calendar days, making 28 calendar days in total. If no suitable worker settled applies during either the first or second stage, then the resident labour market test has been passed and you can appoint a Tier 2 migrant.
28.17 You must place two advertisements using the methods set out in this guidance. In many cases, one of those will be an online advertisement using the Jobcentre Plus Universal Jobmatch service or Jobcentre Online for jobs in Northern Ireland. This is mandatory for certain jobs. For more information on advertisement methods, please see resident labour market test Tier 2 (General) advertising methods.
28.18 When conducting the resident labour market test, you can only use the advertising methods set out in this guidance. The job advertisement must be in English, or Welsh if based in Wales, and it must include:
Annex 3 - Circumstances in which we will downgrade your licence to a B-rating
We will downgrade your licence if:
a) You have certified that a migrant won't claim state benefits, and that migrant then does claim benefits, with your knowledge.
b) You fail to provide any documents listed in Appendix D of this guidance, to a
compliance officer within the specified time limit.
c) As a result of information available to our compliance officers, we are not satisfied that you are using the processes or procedures necessary to fully comply with your sponsor duties.
Annex 4 - C ircumstances in which we may downgrade your licence to a B-rating
We may downgrade your licence to a B-rating if:
a) You sponsor more than five migrants in the Tier 2 (ICT – Graduate Trainee) category with start dates in the same financial year.
b) You fail to keep any of the documents specified in Appendix D of this guidance.
c) You fail to comply with any of your sponsor duties.
Annex 5 - Circumstances in which we will revoke your licence
We will revoke your licence if:
a) We find, after your licence has been granted, that you gave false information on your sponsor licence application, or in support of your sponsor licence application, and had you given the correct information we would have refused your application.
ac) If we have asked you to send us any documents or information and you do not send the documents or information within the given time limit.
Annex 6 - Circumstances in which we may revoke your licence
We may revoke your licence if:
g) You fail to comply with any or all of your sponsor duties.
h) We find that you have no level 1 user in place that meets the requirements set out in level 1 user.
i) You have no SMS users in place.
j) As a result of information available to our compliance officers, we are not satisfied that you are using the processes or procedures necessary to fully comply with your sponsor duties
TIER 2, TIER 4 AND TIER 5 OF THE POINTS BASED SYSTEM – GUIDANCE FOR SPONSORS APPENDIX D – KEEPING DOCUMENTS
The following documents can either be kept as paper copies or in an electronic format. There is no prescribed method for storing the documents, but you must be able to make them available to us on request.
TIER 2, TIER 4 AND TIER 5 OF THE POINTS BASED SYSTEM – GUIDANCE FOR SPONSORS APPENDIX D – KEEPING DOCUMENTS
Resident Labour Market Test Tier 2 and Tier 5
Where the vacancy was advertised on the internet, including where it is advertised on your own website (where this is permitted), you must keep a screen shot from the website hosting the advertisement, on the day the vacancy is first advertised, which clearly shows:
• the name of the website; and
• the contents of the advert; and
• the date and the URL; and
• the closing date for applications.
N.B if the website clearly shows the date the vacancy was first advertised, the screen shot can be taken at any point during the period the vacancy is advertised.
Where the advertisement is not on your own website and does not show your name, a copy of a letter or invoice from the website will be required, to prove that an advertisement was placed.
If the recruitment was done using a recruitment agency, you must keep the following:
• a copy of the contract between you and the recruitment agent;
• a copy of the invoice; and
• copies of any adverts placed which clearly show the title of the publication, the date(s) and the advert as it appeared."
The Legal Principles
(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 ) (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 ).
(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 ).
(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  UKSC 33, reported at  1 WLR 2208 at ).
(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 , citing Lord Sumption SCJ in R (New London College Ltd) v Secretary of State for the Home Department  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 [17-18]).
(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)]).
The scope of judicial review
"It is essential that in exercising the very important jurisdiction to grant judicial review, the court should not intervene just because the reasons given, if strictly construed, may disclose an error of law. The jurisdiction to quash a decision only exists when there has in fact been an error of law. Moreover, the court should not approach decisions and reasons given by committees of laymen expecting the same accuracy in the use of language which a lawyer might be expected to adopt." (emphasis added)
Claimant's first argument: Sub-paragraph (ac) of Annex 5
"[W]e will revoke your licence if:…
(ac) we have asked you to send us any documents or information and you do not send the documents or information within the given time limit".
"15.2 You must give us when asked any documents relating to your sponsored migrants that we consider relevant. We might for example ask for details of your recruitment practices so that we can make sure that a resident labour market test was conducted correctly.
16.1 To comply with your duties, you must keep certain documents for each sponsored migrant. Appendix D lists these documents and says how long you must keep them. The documents can be kept in paper or electronic form. If kept electronically, you must make sure that all the relevant parts of the document are visible as described in Appendix D.
16.2 There is no prescribed method for storing the documents, but they must be available to us on request. If you fail to keep any documents specified in Appendix D and/or fail to give us any documents when we ask for them, we will take action against you."
Failure to retain evidence of RMLT
Failure to report change of business and location of employees
"[W]e may revoke your licence if:…
(g) You fail to comply with any or all of your sponsor duties.
(j) As a result of information available to our compliance officers, we are not satisfied that you are using processes or procedures necessary to fully comply with your sponsor duties."
Claimant's second argument – irrationality
Claimant's third argument – failure to appreciate discretion
"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 the support of immigration control is a heavy one. The SSHD is entitled to review purported compliance with a cynical level of supervision."
UPON hearing counsel for the Claimant and counsel for the Defendant,
AND UPON the hearing on 11-12 March 2015 of the Claimant's claim for judicial review of the 16 June 2014 and 4 July 2014 decisions to revoke the Claimant's Tier 2 sponsor licence,
AND UPON having considered the written representations of the Parties in respect of the continuation of interim relief,
IT IS ORDERED THAT:-
14th May 2015
The Hon. Mr Justice Haddon-Cave