Sponsor Licence – Duties, Responsibilities and Corporate Structural Change

From 6 April 2024, Sponsor Licence holders are no longer required to make a renewal application every four years or pay a renewal fee.  Instead, the expiry date of all sponsor licences has been automatically extended by the Home Office to expire in 10 years’ time. This change applies to all sponsor licences that are due to expire on or after 6 April 2024, and not only to new licences obtained after this date.

Sponsors should, however, be aware that the Home Office is continuing to conduct compliance audits on an announced and unannounced basis. If UKVI compliance officers have any concerns about your actions as a sponsor then they may downgrade or revoke your licence.

Compliance: your duty to report

Your responsibility to comply with the duties of a licensed sponsor will start on the day your licence is granted and continue until you surrender your licence, it is made dormant or it has been revoked. Your responsibility for each worker will start on the day a Certificate of Sponsorship (CoS) is assigned

These considerations must take place before any corporate transactions are completed, as the reporting duties of any ownership structure change must be made within 20 days of any change occurring and must be recorded on the Sponsorship Management System (SMS).

Under such a tight timescale, the requisite evidence of corporate transactions must be prepared and submitted to the Home Office. Failing to undertake this task in advance runs the risk of not having the required evidence in time to submit within the 20 days, subsequently causing further delays for the Home Office’s decision.

Know your reporting duties

You have an obligation to use the online SMS to report some events within 10 working days. These include:

• If a sponsored worker fails to report for work;
• If a sponsored worker is absent for more than 10 consecutive days without permission;
• If a sponsored worker no longer works for you;
• Significant changes to employment;
• If there is any change to the size or charitable status of the company;
• The worker is working for the same employer and in the same employment but different sponsor;
• Where employment is affected by TUPE or similar protection.

For some events, you must report within 20 working days.  These include:

• If the company changes its name;
• If all or part of the business is sold;
• If the company ceases to trade;
• If the business is taken over;

Record Keeping

One of your duties as a sponsor of foreign national workers includes keeping records for each worker. Appendix D contains a number of specified documents you must keep and information on how long you need to retain them. You must also keep the documents you provided in support of your sponsor licence application.

It is advisable to maintain an up-to-date record of the contact details for each sponsor worker and ensure that Right to Work checks are being carried out correctly.

Corporate structure change – is the Sponsor Licence transferable?

If your organisation holds a sponsorship licence, it is important to be aware of the different events that fall within the ambit of being unable to transfer the licence. These include:

• Direct change of ownership
• Share sale (part of, or the controlling number of shares i.e. 51% or more)
• Mergers/Takeover (wholly or partly)
• Organisation split to create new organisations (de-mergers)

Depending on the type of ownership or structure change listed above, specialist advice will need to be sought to provide tailored directions on how to overcome this change in ownership in respect of the sponsor licence held, and how to navigate compliance with the reporting and recording duties throughout this.

TUPE

Throughout the corporate change, if Transfer of Undertakings (Protection of Employment) Regulations 2006 (as amended) (‘TUPE’) is engaged, the transfer of all employees, including the overseas workers, will remain on the same terms and conditions. However, as like the previous corporate structure changes listed above, different circumstances can impact the duties of those involved in the transfer, with some circumstances resulting in a simple notification and others resulting in a new sponsor licence application, regardless of whether TUPE has been triggered.

Gilson Gray – advice & assistance

Failing to comply with sponsor licence duties may have serious consequences including having your Licence downgraded, suspended or revoked. A failure to comply with sponsor duties may affect the sponsored worker’s permission to stay in the UK. If you are found to be employing workers illegally, you may be faced with penalties such as being issued with a civil penalty or being prosecuted.

For expert advice and assistance with a Skilled Worker Sponsor Licence application or compliance with sponsorship duties, contact our business immigration solicitors who would be happy to provide a free immigration health check.

Find out more about our Immigration services here.