This judgment was handed down remotely at 10.30am on 11 March 2025 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
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LORD JUSTICE BAKER :
- The principal issue in these two appeals is whether the Secretary of State for the Home Department ("SSHD"), when deciding whether to revoke a Tier 2 sponsorship licence, is under a duty to carry out an assessment of the impact of revocation on the sponsor, its employees, service users and the wider community. In the first case, reported as R (Prestwick Care Limited) v SSHD [2023] EWHC 3193 (Admin), the deputy judge, when dismissing a claim for judicial review of the revocation decision, answered that question in the negative. In the second case, reported as R (Supporting Care Ltd) v SSHD [2024] EWHC 68 (Admin), another deputy judge answered in the affirmative.
- For the reasons set out below, I have concluded that the judge in the Prestwick case was right to conclude that the SSHD is under no such duty and that the appeal in that case should be dismissed. But although it follows that the judge in the SCL case was wrong on that issue, I have concluded that his order quashing the revocation decision should be upheld on other grounds.
- This judgment is structured as follows.
(1) The legal framework and Guidance
(2) Case law
(3) The Prestwick appeal: (a) background; (b) the Administrative Court judgment; (c) grounds of appeal
(4) The SCL appeal: (a) background; (b) the Administrative Court judgment; (c) grounds of appeal
(5) The common issue: submissions, discussion and conclusion
(6) Prestwick: other grounds of appeal
(7) SCL respondent's notice: submissions, discussion and conclusion
The Legal Framework and Guidance
- Under the Immigration Rules, made under powers vested in the SSHD by s.3(2) of the Immigration Act 1971, foreign nationals may enter the United Kingdom as workers if sponsored by an employer. The SSHD is responsible for awarding licences to employers who may then grant certificates of sponsorship to workers as permitted by the licence. The scheme provides a way of addressing skill shortages in the labour market and a fast track for entry into the country for those individuals who are sponsored. It plays an important role in the national economy – we were told that there are currently over 115,000 sponsors in the UK including just under 9,000 in the social care sector alone. The scheme is heavily dependent on trust and there is plainly the potential for abuse. The SSHD has to ensure and enforce compliance with the scheme as part of her overall management of immigration.
- The provisions governing the sponsorship scheme are set out in non-statutory guidance, the legal basis for which was described by Lord Sumption in R (New London College) v SSHD [2013] UKSC 51, [2013] 1 WLR 2358 at paragraph 28-29 in these terms:
"28. …. the statutory power of the Secretary of State to administer the system of immigration control must necessarily extend to a range of ancillary and incidental administrative powers not expressly spelt out in the Act, including the vetting of sponsors.
29. The Immigration Act does not prescribe the method of immigration control to be adopted. It leaves the Secretary of State to do that, subject to her laying before Parliament any rules that she prescribes as to the practice to be followed for regulating entry into and stay in the United Kingdom. Different methods of immigration control may call for more or less elaborate administrative infrastructure. It cannot have been Parliament's intention that the Secretary of State should be limited to those methods of immigration control which required no other administrative measures apart from the regulation of entry into or stay in the United Kingdom. If the Secretary of State is entitled (as she plainly is) to prescribe and lay before Parliament rules for the grant of leave to enter or remain in the United Kingdom which depend upon the migrant having a suitable sponsor, then she must be also be entitled to take administrative measures for identifying sponsors who are and remain suitable, even if these measures do not themselves fall within section 3(2) of the Act."
- The "Workers and Temporary Workers: guidance for sponsors" in force at the relevant time ("the Guidance") consisted of four parts – "Part 1: Apply for a licence" provided information for employers and other organisations on how to apply for authorisation ("a licence") to sponsor an overseas national on the Worker and Temporary Worker immigration routes. "Part 2: Sponsor a worker: general information" provided information for licensed sponsors on how to sponsor a person on those routes. "Part 3: Sponsor duties and compliance" provided guidance for employers and organisations who held a sponsor licence under the routes. This part "tells you how to meet your sponsor duties and the action we will take if you breach, or are suspected of breaching, these duties". The worker routes included "skilled worker". Part 4, headed "Sponsor a skilled worker", was not relevant to the issues arising in these appeals. All parts of the Guidance included a sentence substantially in these terms: "You should read all parts of the guidance to ensure that you understand your duties and responsibilities as a licensed sponsor".
- The guiding principles were set out in Part 1 at paragraphs L2.1 to L2.3. Paragraph L2.1 provided, in terms reiterated at other points in the guidance:
"Sponsorship is based on two main principles:
- sponsorship is a privilege, not a right – this means that those who benefit most directly from employing migrant workers must:
- play their part in ensuring the immigration system is not abused
- not behave in a manner that is not conducive to the public good
- overseas nationals who apply for permission to enter or stay in the UK to work are eligible, and a trustworthy and licensed employer genuinely wishes to employ and sponsor them".
- Paragraph L2.3. provided:
"We have a duty to ensure all sponsors discharge these responsibilities, and we will take compliance action when it is considered that a sponsor has failed to do so, or otherwise poses a risk to immigration control. Part 3: Sponsor duties and compliance contains detailed guidance on your duties as a licensed sponsor and the compliance action we can take if you fail to meet those duties."
- An employer or organisation to whom a licence was granted was entitled to assign a certificate of sponsorship to a worker from overseas. Before a worker could make a successful immigration application, the sponsor had to assign them a valid certificate of sponsorship ("CoS"). Paragraph S3.5 in Part 2 set out the information which the sponsor had to include on the CoS, including details of the worker's job and the appropriate 4-digit "occupation code". Paragraph 3.29 stated that the sponsor was responsible for choosing the correct occupation code. Paragraph 3.30 provided:
"It is essential that you select the correct occupation code. If you use the wrong occupation code when assigning a CoS or applying for a Skilled Worker Defined CoS, this could lead to an application being delayed or refused. If you have provided false, misleading or otherwise incorrect information about the skill or salary level of the job on a CoS – for example, to enable the worker to score points on the Skilled Worker or GBM routes – we will take compliance action against you. This could include revoking your sponsor licence. For further information, see Part 3: Sponsor duties and compliance."
Paragraph S3.36 provided that the sponsor must withdraw a CoS and assign a new one if they had made a significant error, such as entering the wrong occupation code.
- Section S of Part 2 of the Guidance also included an obligation, when assigning a CoS to a worker, to give prescribed information about their salary and subsequently to inform the SSHD of any reduction in their salary.
- Much of the focus in the present cases was on Part 3: Sponsor duties and compliance. Under the heading "Complying with our immigration laws", paragraph C1.38 stated "You must comply with our immigration laws and all parts of the Worker and Temporary Worker sponsor guidance." A list of specific obligations included the following:
"you must … not assign a CoS where there is no genuine vacancy or for a role which does not meet the specific eligibility criteria for the route – if you do, we reserve the right to suspend your licence, pending further investigation, which may result in your licence being revoked."
- Under the heading "Genuine vacancy: definition", paragraph C1.44 provided:
"A genuine vacancy is one which:
• requires the jobholder to perform the specific duties and responsibilities for the job and meets all of the requirements of the relevant route
• does not include dissimilar and/or predominantly lower-skilled duties
• is appropriate to the business in light of its business model, business plan and scale."
Paragraph C1.46 provided (so far as relevant to this appeal):
"Examples of vacancies that are not considered to be genuine include, but are not limited to:
• a role that does not actually exist
• one which contains an exaggerated or incorrect job description to deliberately make it appear to meet the requirements of the route when it does not, or is otherwise a sham
• a job or role that was created primarily to enable an overseas national to come to, or stay in, the UK …."
- Section C9 in Part 3 was headed "Suspending your licence". Under the heading "How we decide whether to suspend your licence", it provided:
"C9.7. If any of the circumstances listed in Annex C1 arise, we will either revoke your licence immediately or suspend your licence pending further investigation or consideration.
C9.8. If any of the circumstances listed in Annex C2 or Annex C3 arise, we will first consider downgrading your licence. However, we may decide to suspend your licence without first downgrading it. This could be where there has been sustained non-compliance over a period of time, or where there have been a number of breaches which are minor in themselves but, taken together, indicate a more serious or systematic failing."
- Under the heading "The process we will follow", it provided (so far as relevant to this appeal):
"C9.9. Where we are satisfied that we have enough evidence to suspend your licence without further investigation, we will write to you giving reasons for the suspension.
C9.10. Where we have evidence that justifies your licence being suspended pending a full investigation, we will write to you giving our initial reasons for suspension and telling you that an investigation will take place. It may not be possible to say how long the investigation will take, but we will update you on our progress at regular intervals. During this period, you can make any written statements to respond, including sending evidence. Any statement or evidence will be taken into account during the investigation.
C9.11. You have 20 working days from the date of the written notification to respond to our letter. This is your opportunity to seek a review of our decision and to set out any mitigating arguments you believe exist. Your response to us must be in writing and set out, with any relevant supporting evidence, which grounds you believe to be incorrect and why. We may give you more time to respond if we are satisfied there are exceptional circumstances. We will not hold an oral hearing."
- Section 10 of Part 3 was headed "Revoking your licence". Under the heading "How we decide whether to revoke your licence", it identified three categories of circumstances which would or might lead to revocation of a licence. It provided:
"C10.4. Annex C1 of this document sets out the circumstances in which we will revoke your licence – these are known as 'mandatory' grounds of revocation. If any of these circumstances arise, we may revoke your licence immediately and without warning. If we do not revoke your licence immediately, we will suspend your licence pending further investigation.
C10.5. Annex C2 of this document sets out the circumstances in which we will normally revoke your licence, unless there are exceptional circumstances.
C10.6. We cannot define in which exceptional circumstances we may not revoke your sponsor licence but, when one of the circumstances listed in Annex C2 of this guidance applies, we view this as a serious matter. We will look for evidence you have adequate processes and procedures in place and have taken all reasonable steps to verify information you are required to obtain and hold in connection with your duties under this guidance, as well as any information that you send to us.
C10.7. Annex C3 of this document sets out the circumstances in which we may revoke your licence …."
- Annex C1 included under "(s)":
"The role undertaken by a worker you have sponsored does not match one or both of the following:
• the occupation code stated on the CoS you assigned to them
• the job description on the CoS you assigned to them."
It further included, under "(z)":
"We have reasonable grounds to believe the role for which you have assigned a CoS is not genuine – for example, because it:
• does not exist
• is a sham (including but not limited to where the CoS contains an exaggerated or incorrect job description to deliberately make it appear to meet the requirements of the route you assigned it under when it does not); or
- has been created mainly so the worker can apply for entry clearance or permission to stay."
It also included, under "(aa)":
"You pay a sponsored worker less than you said you would on the worker's CoS, and
- You have not notified us of the change in salary; or
- The reduction is not otherwise permitted by the Immigration Rules or [the Guidance]."
- Under the heading "How revocation affects your sponsored workers", the Guidance provided that in that event "we may cancel (or shorten) the permission of any workers you are currently sponsoring on the Worker and Temporary Worker routes." In the case of a worker who "was not actively or knowingly involved (complicit) in the reasons for revocation", it stated:
"We will normally cancel (shorten) their permission so they have only 60 calendar days' left …. the worker will have to leave the UK or face enforced removal if, at the end of the 60 calendar days (or by the time their permission expires if it was not shortened), they have not made an application for permission to stay on a route for which they qualify."
- Paragraph C10.16 provided that, once the licence had been revoked, the sponsor could not make a further application for a sponsor licence for 12 months after the date on which they were notified of the revocation.
Case law – (1) The sponsorship scheme
- The legal principles governing the system of sponsorship and its review by the Courts are established in a series of cases, some of which relate to the Tier 2 scheme (sponsorhip of skilled workers) and others to the similar sponsor scheme under Tier 4 (for colleges who sponsor students). It is well established that the same principles apply to both Tiers: R (on the application of St Andrew's College) v Secretary of State for the Home Department [2018] EWCA Civ 2496 ("St Andrew's College"), paragraph 29 (considered below).
- The sponsorship scheme is entirely voluntary. A care home can, if it chooses, engage only staff who already have leave to remain in this country. A sponsorship licence gives a care provider a business advantage through access to a wider labour market. But to enjoy that advantage the provider must comply with the rules of the scheme. In R (New London College) v SSHD, supra, Lord Sumption JSC said, at paragraph 29:
"There are substantial advantages for sponsors in participating [in the Tier 4 Scheme] but they are not obliged to do so. The Rules contained in the Tier 4 Guidance for determining whether applicants are suitable to be sponsoring institutions, are in reality conditions of participation, and sponsors seeking the advantages of a licence cannot complain if they are required to adhere to them."
- In St Andrew's College, at paragraph 29, Haddon-Cave LJ reiterated a summary of the principles he had articulated in R (Raj and Knoll Limited) v Secretary of State for the Home Department [2015] EWHC 1329 (Admin) ("Raj and Knoll"), at paragraph 21, which had been approved by this Court on appeal at [2016] EWCA Civ 770. For the purposes of these appeals they can be expressed as follows:
"(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 [under the Tier 4 scheme] Confirmation of Acceptance ("CAS")....
(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" …
(3) The Sponsor "must maintain its own records with assiduity" ….
(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 [2012] UKSC 33, reported at [2012] 1 WLR 2208 at paragraph 42).
(5) The [certificate] is very significant: the possession by a migrant of a requisite CAS [or CoS] 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 ….
(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 ….
(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 ….
(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 …."
- In the following paragraph (30) in St Andrew's College, Haddon-Cave LJ endorsed the following four further principles which he derived from the judgment of Silber J in R (Westech College) v Secretary of State for the Home Department [2011] EWHC 1484 (Admin):
"(1) The SSHD has stringent powers to suspend or revoke a sponsor's licence if the SSHD becomes concerned that a sponsor is not complying with its obligations and must be sensitive to any factors which might suggest the possibility of any breaches of immigration control having occurred or being about to occur because of lapses or omissions committed by a sponsor….
(2) There is a clear need in some circumstances for the SSHD to invoke the SSHD's powers where there is a risk that the sponsor might not be complying with its duties provided of course that UKBA complies with its public law duties….
(3) The expertise and experience of the SSHD and UKBA in being able to detect the possibility that a sponsor might not be or be at risk of not complying with its duties is something that the court must and does respect because, unlike the SSHD, courts do not have this critically important experience or expertise….
(4) An entity which holds a sponsor licence has substantial duties to ensure that the rules relating to immigration control are adhered to strictly and properly, such that if the SSHD were concerned that a sponsor is not complying with those duties, it would entitle, if not oblige, UKBA to prevent that sponsor from either granting more [certificates] or revoking its licence …."
- In Raj and Knoll in the Court of Appeal, Tomlinson LJ said (at paragraph 32)
"I was not … immediately impressed by the submission that the supervision of this scheme by the SSHD attracts an enhanced standard of judicial scrutiny. The mere fact that the decision-making in this area may have serious commercial consequences for licensed sponsors is not of itself a reason to impose heightened scrutiny. The circumstance that the SSHD has special expertise in and experience of decision-making in this field, and that the court possesses no particular institutional competence and can claim no special constitutional legitimacy militates against that submission …. It is also clear that the exercise in which the SSHD is engaged involves no fundamental right of the Appellant but on the contrary a right contingent upon adherence to the rules:…."
- These principles have since been applied in a number of first instance cases, including, in respect of Tier 2 licences, R (Birds Hill Nursing Home) v SSHD [2015] EWHC 2241 (Admin) and R (Operation Holdings t/a Goldcare Homes) v SSHD [2019] EWHC 3884 (Admin) ("Goldcare"). In the latter case, the deputy judge, Alison Foster QC (as she then was), observed:
"21. It is clear that sponsorship is based on two fundamental principles:
(i) Those who benefit most directly from migration, that is to say employers, education providers or other bodies who bring in migrants, must play their part in ensuring that the system is not abused; and
(ii) The Home Office needs to be sure that those applying to come to the UK to undertake work or to study are indeed eligible to do so and if a reputable employer or education provider genuinely wishes to take them on.
22. This provides the context for the application of the scheme, and reflects, as was said by McGowan J [at first instance] in London St. Andrew's College v SSHD [2014] EWHC 4328 (Admin) at [13], that the obligation of a sponsor is to carry out its responsibilities "with all the rigour and vigilance of the immigration control authorities". This approach is found throughout the case law …."
Case law – (2) Material considerations
- Next, I address case law relevant to how a decision-maker decides what factors need to be taken into account when reaching a decision. This line of authorities was not cited in the skeleton arguments filed on these appeals, but raised by Singh LJ in the course of the hearing and then addressed by counsel in oral submissions.
- In R v Somerset County Council, Ex p Fewings [1995] EWCA Civ 24, [1995] 1 WLR 1037, Simon Brown LJ observed (at page 1049 in the WLR report):
"It is important to bear in mind … that there are in fact three categories of consideration. First, those clearly (whether expressly or impliedly) identified by the statute as considerations to which regard must be had. Second, those clearly identified by the statute as considerations to which regard must not be had. Third, those to which the decision-maker may have regard if in his judgment and discretion he thinks it right to do so. There is, in short, a margin of appreciation within which the decision-maker may decide just what considerations should play a part in his reasoning process."
- This passage was described as "a useful summation of the law" by Lord Hodge DPSC and Lord Sales JSC at paragraph 116 of their judgment in R (Friends of the Earth Ltd and another) v Secretary of State for Transport [2020] UKSC 52 ("Friends of the Earth"). At paragraphs 120-1, they continued:
"120. It is possible to subdivide the third category of consideration into two types of case. First, a decision-maker may not advert at all to a particular consideration falling within that category. In such a case, unless the consideration is obviously material according to the Wednesbury irrationality test, the decision is not affected by any unlawfulness. Lord Bingham deals with such a case in R (Corner House Research) v Director of the Serious Fraud Office [2008[ UKHL 60, [2009] 1 AC 756, at para 40. There is no obligation on a decision-maker to work through every consideration which might conceivably be regarded as potentially relevant to the decision they have to take and positively decide to discount it in the exercise of their discretion.
121. Secondly, a decision-maker may in fact turn their mind to a particular consideration falling within the third category, but decide to give the consideration no weight …. The question again is whether the decision-maker acts rationally in doing so…. This shades into a cognate principle of public law, that in normal circumstances the weight to be given to a particular consideration is a matter for the decision-maker, and this includes that a decision-maker might (subject to the test of rationality) lawfully decide to give a consideration no weight…."
Case law – (3) Procedural fairness
- In R v Secretary of State for the Home Department, Ex p Doody [1994] 1 AC 531, Lord Mustill at page 560 summarised the requirements of procedural fairness as established in earlier authorities:
"From them, I derive that (1) where an Act of Parliament confers an administrative power there is a presumption that it will be exercised in a manner which is fair in all the circumstances. (2) The standards of fairness are not immutable. They may change with the passage of time, both in the general and in their application to decisions of a particular type. (3) The principles of fairness are not to be applied by rote identically in every situation. What fairness demands is dependent on the context of the decision, and this is to be taken into account in all its aspects. (4) An essential feature of the context is the statute which creates the discretion, as regards both its language and the shape of the legal and administrative system within which the decision is taken. (5) Fairness will very often require that a person who may be adversely affected by the decision will have an opportunity to make representations on his own behalf either before the decision is taken with a view to producing a favourable result; or after it is taken, with a view to procuring its modification; or both. (6) Since the person affected usually cannot make worthwhile representations without knowing what factors may weigh against his interests fairness will very often require that he is informed of the gist of the case which he has to answer."
- In Bank Mellat v HM Treasury (No 2)[2013] UKSC 39, [2014] AC 700, Lord Neuberger of Abbotsbury PSC, after citing that passage from Ex p Doody, said, at paragraph 179:
"In my view, the rule is that, before a statutory power is exercised, any person who foreseeably would be significantly detrimentally affected by the exercise should be given the opportunity to make representations in advance, unless (i) the statutory provisions concerned expressly or impliedly provide otherwise or (ii) the circumstances in which the power is to be exercised would render it impossible, impractical or pointless to afford such an opportunity."
- These principles apply in immigration cases: see Balajigari v Secretary of State for the Home Department [2019] EWCA Civ 673 [2019] 1 WLR 4647 ("Balajigari") at paragraphs 45 to 61. Balajigari involved a series of appeals in proceedings for the judicial review of decisions under paragraph 322(5) of the Immigration Rules to refuse indefinite leave to remain on grounds of a dishonest discrepancy between the applicants' actual earnings and the earnings declared to the revenue. Paragraph 322(5) involved a two-stage process, the first stage being to decide whether it was "undesirable" to grant leave in the light of the specified matters and the second to decide as a matter of discretion whether leave should be refused on the basis of such undesirability.
- At paragraph 42, this Court addressed the question of how the SSHD should proceed in a case involving an apparent dishonest discrepancy:
"42. …A discrepancy between the earnings declared to HMRC and to the Home Office may justifiably give rise to a suspicion that it is the result of dishonesty but it does not by itself justify a conclusion to that effect. What it does is to call for an explanation. If an explanation once sought is not forthcoming, or is unconvincing, it may at that point be legitimate for the Secretary of State to infer dishonesty; but even in that case the position is not that there is a legal burden on the applicant to disprove dishonesty. The Secretary of State must simply decide, considering the discrepancy in the light of the explanation (or lack of it), whether he is satisfied that the applicant has been dishonest.
43. ….we consider … that the concept of standard of proof is not inappropriate in the present context. This is because what is being asserted by the Secretary of State is that an applicant for ILR has been dishonest. That is a serious allegation, carrying with it serious consequences. Accordingly, … the Secretary of State must be satisfied that dishonesty has occurred, the standard of proof being the balance of probabilities but bearing in mind the serious nature of the allegation and the serious consequences which follow from such a finding of dishonesty."
- At paragraph 55, this Court stated:
"we have come to the conclusion that where the Secretary of State is minded to refuse ILR on the basis of paragraph 322(5) on the basis of the applicant's dishonesty, or other reprehensible conduct, he is required as a matter of procedural fairness to indicate clearly to the applicant that he has that suspicion; to give the applicant an opportunity to respond, both as regards the conduct itself and as regards any other reasons relied on as regards "undesirability" and the exercise of the second-stage assessment; and then to take that response into account before drawing the conclusion that there has been such conduct."
Having cited the passage from Bank Mellat v HM Treasury (No 2) quoted above, the Court continued (at paragraph 60):
"This leads to the proposition that, unless the circumstances of a particular case make this impracticable, the ability to make representations only after a decision has been taken will usually be insufficient to satisfy the demands of common law procedural fairness. The rationale for this proposition lies in the underlying reasons for having procedural fairness in the first place. It is conducive to better decision-making because it ensures that the decision-maker is fully informed at a point when a decision is still at a formative stage. It also shows respect for the individual whose interests are affected, who will know that they have had the opportunity to influence a decision before it is made. Another rationale is no doubt that, if a decision has already been made, human nature being what it is, the decision-maker may unconsciously and in good faith tend to be defensive over the decision to which he or she has previously come."
The Prestwick case – (a) background
- Prestwick is a group of three companies trading under the name "Prestwick Care" which operates 15 care homes. On 27 November 2008, it was granted a skilled worker sponsor licence. Over the following years, it issued certificates of sponsorship to a number of workers from overseas. At the appeal hearing, we were informed that at the date of the decision to revoke it employed 857 staff, of whom 219 were foreign nationals permitted to enter the country and work under a CoS.
- In October 2022, the SSHD's compliance team attended at PCL's care homes to assess adherence to the guidance. The team concluded that Prestwick was in breach of a number of requirements under the guidance.
- On 6 December 2022, the SSHD sent a letter to Prestwick suspending the licence and setting out the alleged breaches. The letter stated:
"To give you the opportunity to explain the above issues before we begin revocation action, we have suspended your licence with immediate effect. You have 20 working days from the date of this letter to make representations including, submitting evidence, in response to this letter."
- On 22 December 2022, Prestwick submitted representations by letter responding to the specific allegations of breach. It made no reference to any wider considerations, such as the impact of revocation on its business or on the provision of social care in the community.
- On 3 February 2023, a senior caseworker in the SSHD's compliance team sent a letter to Prestwick saying "We have considered your representations and have taken the decision to revoke your sponsor licence with immediate effect." She set out her analysis and conclusions that there had been seven breaches of sponsor duties, two of which were mandatory grounds for revocation, the remaining five being breaches which would "normally" lead the SSHD to revoke under the guidance (which were not addressed in the appeal before us). The two mandatory grounds were that:
(1) under Annex C1(s), in respect of five workers, the role undertaken by each worker did not match the job description on the respective CoS; and
(2) under Annex C1(aa), in respect of two workers, the salary paid was not in line with the respective CoS.
In setting out her analysis, she referred to the various representations made by Prestwick.
- The letter concluded with the following paragraphs under the heading "Decision":
"95. We always take into consideration the potential impact revocation may have on a sponsor and consideration is always given to re-rating a sponsor licence to allow a sponsor to demonstrate full compliance with their sponsor duties if appropriate.
96. We have considered the possibility of downgrading your licence and issuing you with an action plan. However, we will only downgrade a licence and issue an action plan where there is scope to rectify shortcomings or omissions in systems or retained documents.
97. As already stated, you have acted in contravention Annex C1 (s), (aa), and Annex C2 (a), (b), (q) [the non-mandatory grounds] of the Workers and Temporary Workers: guidance for sponsors part 3. Downgrading your licence is not appropriate due to the seriousness of your non-compliance with your sponsor duties.
98. We believe the issues described above constitute a failure to comply with your sponsor duties.
99. Paragraph C10.4 of the Workers and Temporary Workers: guidance for sponsors part 3 states: Annex C1 of this document sets out the circumstances in which we will revoke your licence – these are known as 'mandatory' grounds of revocation. If any of these circumstances arise, we may revoke your licence immediately and without warning.
100. As a result, your sponsor licence has been revoked. There is no right of appeal against this decision."
- On 7 February 2023 Prestwick issued judicial review proceedings and on the same date was granted an injunction preventing the decision taking effect until the permission decision or further order.
- Separately, and outside this claim, on 8 March 2023, Prestwick asked the SSHD to reconsider the revocation decision in light of matters it had subsequently raised. On 23 March 2023, the SSHD replied that there would be no review of the decision.
- On 21 April 2023, Prestwick was granted permission to apply for judicial review of the revocation decision by Fordham J. On the same date, Prestwick issued a second claim for judicial review seeking to challenge "the ongoing refusal to review decisions to suspend and then revoke the Claimant's sponsor licence in light of fresh material served by the Claimant." That claim was stayed pending the decision in the first judicial review claim.
- Within the first judicial review claim, evidence was filed on behalf of the company seeking to demonstrate that the loss of the sponsor licence would cause it to be unable to employ staff, which would have a serious adverse effect on its users and local authorities who rely on the company to provide care. This included an email exhibited to a statement in which an officer of one local authority (Gateshead Council) wrote:
"The implication of removal of over 200 staff as a result of revocation of your licence would undoubtedly result in closure of several units and with hospitals currently overflowing; this will have a devastating impact in Gateshead where we would have no place to transfer such clients. As you are aware, these movements are extremely detriment to the welfare and safety of vulnerable clients and can lead to potential loss of life."
- In reply, the SSHD filed a statement from Daniel Magee, a higher executive officer in the Sponsor Compliance Unit. Having set out evidence about the specific investigation, he said, under the heading "Impact":
"We are aware of the impact that a sponsor licence revocation can have on a company. However, ultimately, sponsorship involves a pledge from that company that it accepts all of the duties set out by the Home Office in the aforementioned guidance."
The statement continued:
"A revocation of a sponsor's licence does not result in the immediate termination of their sponsored worker's leave in the UK. From the date of revocation, sponsored workers are normally provided with a 60-calendar day grace period in which they can seek alternative ways to regulate their stay in the UK - including gaining employment and sponsorship with other sponsors …. Alternate companies with sponsor licences can easily be identified, as the Home Office publishes a register of licensed sponsors online on the gov.uk website…. Since October 2022, the Sponsor Compliance Team have also been actively engaging with the Department for Health and Social Care (DHSC) informing upon action taken against sponsors who operate within the Health & Social Care setting. This has allowed DHSC to identify any risks to the disruption of care provided to end service users, by that company. Working alongside DHSC and the Local Authorities, the Home Office has been able to apply discretion in cases, by arranging for visa cancellation action to be paused for a limited period, allowing for continuity of care, until alternative sources of care are arranged. DHSC were made aware of the suspension of Prestwick Care's sponsor licence on 6 December 2022. No communications regarding Prestwick Care were received from the DHSC or Local Authorities before the revocation decision was made. I am aware of an email titled 'Staffing Challenges – Gateshead Carehomes', dated 7 February 2023, and addressed to Prestwick Care from Barry Norman of Gateshead Council. The email confirms the impact of the revocation on Prestwick Care's Gateshead nursing homes, of which we were already aware of and acknowledge."
- The first judicial review claim was heard before HHJ Kramer (sitting as a judge of the High Court) on 12, 13 and 17 July 2023. On 14 November 2023, judgment was handed down dismissing the claim for judicial review and refusing permission to appeal.
- On 7 November 2023, Prestwick filed a notice of appeal against the order. Initially, on 28 November, Arnold LJ refused permission to appeal. On 1 February 2024, Prestwick filed an application under CPR 52.30 asking the Court to re-open the application for permission to appeal following the judgment at first instance in the SCL case summarised below in which the judge had reached a decision which appeared to be in conflict with the decision in the Prestwick case. On 21 June 2024, Arnold LJ (having granted permission to appeal in the SCL case as described below) allowed the application to re-open and granted permission to appeal. He did so unaware of the fact that the SSHD had filed a response to the application. On 6 September 2024, having reconsidered the matter afresh in the light of that response, Arnold LJ confirmed his decision to grant permission to appeal and directed that the two appeals should be heard together.
- Meanwhile, on 18 December 2023, another judge had refused Prestwick permission to bring the second judicial review claim. Prestwick initially sought to renew that application at an oral hearing, but in the event withdrew their claim, by consent, before the hearing.
The Prestwick case – (b) the Administrative Court judgment
- HHJ Kramer began by setting out the background in some detail. Having complained that the claimant's pleading of its case failed to comply with the Administrative Court Judicial Review Guide, he distilled the claimant's case into four grounds:
(1) There was an unfair failure to invite representations regarding matters relied upon as the basis for the decision.
(2) The defendant failed to approach the decision with an open mind.
(3) The decision was based on an irrational conclusion that the claimant had been dishonest.
(4) The decision failed to take into account relevant considerations.
- Having set out the relevant provisions of the Guidance, the judge cited relevant case law, in particular the principles concerning the enforcement of the guidance in sponsorship cases set out by Haddon-Cave LJ in St Andrew's College at paragraph 29. Judge Kramer continued (paragraph 21):
"It is common ground that the common law duty of fairness must be observed by the defendant in the process of investigating and sanctioning the claimant and that the question as to whether a fair procedure has been followed is for the court to decide. It does not defer to the decision of the defendant on this issue. Where the parties differ is that Mr Southey [the applicant's counsel] argues that in a case such as this fairness requires that the defendant exercise a high standard of procedural fairness because (a) the implications of the decision to revoke are potentially grave to the claimant's business and the provision of residential care in the areas of its operation, (b) what is in issue is the removal of a benefit that has been enjoyed for a considerable period, (c) there is no appeal against the revocation of a sponsorship licence, with the result that there is no opportunity for a court to correct a factually incorrect decision and (d) it is the sponsor who has to satisfy the defendant that the scheme is and will be properly applied."
He considered reported cases cited by Mr Southey in support of those propositions, but was unable to see how they supported the assertion that a heightened standard of fairness was required in a case such as this where "what constitutes fairness … is highly context dependent", as illustrated by the decision in Goldcare and cases cited therein. Having quoted passages from those cases, he concluded (paragraph 28):
"In the light of these authorities, the four factors put forward by the claimant … do not support a heightened standard of fairness. On the contrary, as was the case in Goldcare, the enforcement procedure set out in the guidance is a fair one given the context."
- Dealing first with Mr Southey's points (b) to (d), he said (ibid):
"The fact that the revocation involves the removal of a benefit previously enjoyed is not relevant as the enforcement procedure involves no fundamental right of the sponsor but one contingent on adherence to the rules…. The absence of an appeal and the fact that the sponsor has to satisfy the defendant that the scheme is, and will be, properly applied does not assist the claimant's argument given the precarious nature of the licence as a privilege not a right, one which can be removed where there are reasonable grounds for suspecting a breach, i.e. at a fairly low threshold, where deference is given to the defendant's substantive decision and the enjoyment of which is based on a high level of trust placed in the sponsor. It would run contradictory to the reason as to why possession of the licence is precarious if the fact that it was imported more rigorous safeguards at the enforcement stage."
- Turning to Mr Southey's point (a), the judge said, first, as to the implications of the decision to revoke for the provision of residential care in the area (paragraph 29):
"Mr Southey's reliance upon the impact of the provision upon local care as a reason for heightened scrutiny is also misplaced. He argued that the defendant must enquire about the impact upon such provision before taking a decision to revoke. He said this is required as a matter of democratic accountability. As he put it, if the Secretary of State wishes to prioritise compliance with immigration controls over the provision of healthcare for the elderly she must come out and say so in order to make the decision subject to democratic accountability. My first observation is that this is a political point and not one that goes to the lawfulness of the decision on revocation. The second is that Mr Magee's evidence is to the effect that there is a system in place for mitigations, such as pausing the cancellation of visas for a limited period to allow continuity of care so there is no need for the level of scrutiny suggested by Mr Southey in order to safeguard healthcare. The third is that I do not accept, particularly in the light of the available mitigations, that the balance suggested by Mr Southey, immigration control v health care, is one which the defendant is required to undertake. That being the case, there is no requirement on the defendant to make enquiries of such impact in relation to the decision to revoke, albeit that she liaises with the relevant health authority to mitigate the impact."
He was unpersuaded that there was any authority for the proposition that the SSHD must balance the risk that there may be a lapse in the provision of health care when deciding to revoke a sponsorship licence. Furthermore, (paragraph 320):
"Quite apart from the absence of supportive authority, the essence of the sponsorship system is that the defendant trusts the sponsor to carry out a function which would otherwise be carried out by her department, hence the high level of trust involved. If Mr Southey was correct in his argument, the defendant could be compelled, by the demand for care home places, to continue to trust the claimant to operate the system properly when that trust has gone. The defendant cannot be expected to do so: see Birds Hill Nursing Home & another v SOSHD [2015] EWHC 2241 (Admin) per Nicol J at [44] and St Andrews College per Haddon-Cave LJ at [35]."
- He accepted the SSHD's submission that she could accept what she was told by the company's staff and there was no obligation to request further information. Equally, she had not been asked in the claimant's response to consider the implication of a decision to revoke on the claimant's business or the provision of social care and was not obliged to inform herself about those matters. These had not been raised as issues for consideration in the company's response to the letter of suspension. Similarly, the requirements of fairness did not require the SSHD to ask for further information to fill in the lack of detail about what the employees were doing.
- In respect of the second ground – that the defendant failed to approach the decision with an open mind – the judge concluded (paragraph 73):
"It is to be remembered that the defendant should take steps to suspend or revoke if she has reasonable suspicion of a breach of immigration control, is entitled to maintain a high index of suspicion and a "light trigger" in deciding when and with what level of firmness she should act; see St Andrew's College at [29 (6) and (7)]. In the light of these principles and the facts as set out above, I cannot conclude that the defendant did not approach the job description issue with an open mind."
- On the third ground – that the decision was based on an irrational conclusion that the claimant had been dishonest – the judge concluded (in contrast to the conclusion arrived at in the SCL case as discussed below) that there had in fact been no finding of dishonesty.
- On the fourth ground, he rejected the argument that there had been a failure to take account of relevant considerations. He had already concluded that there was no requirement to take into account the impact on local health care provision or on the sponsor's business and thus there was no duty of sufficient enquiry under Secretary of State for Education and Science v Tameside MBC [1997] AC 1014 ("Tameside"). He added that, in addition
"there are good reasons why the defendant ought not be drawn into taking into account the commercial impact on the business and the effect on local care and health services."
As the SSHD's expertise was in immigration control, it was
"unrealistic to expect her to evaluate the economic viability of the many and disparate businesses which rely upon the use of sponsored labour."
She could never be confident that she has the whole picture. Ultimately, however, these matters were not relevant:
"neither the commercial viability or healthcare provision issues should need addressing because they are not relevant to the central question, namely, can I trust this sponsor to comply with the Guidance?"
- Finally, the judge recorded that, in the event that he found any of the claimant's grounds to be made out, the SSHD had invited him to exercise the obligation under s.31(2A) of the Senior Courts Act 1981, which provides (so far as relevant):
"The High Court … must refuse to grant relief on an application for judicial review …if it appears to the court to be highly likely that the outcome for the applicant would not have been substantially different if the conduct complained of had not occurred."
He concluded (paragraph 97):
"On one view there is no scope for the operation of the section as I have not found any of the pleaded challenges made out. For completeness, however, if the claimant had relied upon the failure to notify the claimant as to the issue it was expected to address in relation to SSP, I would have had no hesitation in reaching the conclusion that the defendant was highly likely to have reached the same conclusion as to revocation."
The Prestwick case – (c) Grounds of Appeal to this Court
- Four grounds of appeal were put forward on behalf of Prestwick against the refusal to quash the revocation decision.
(1) The court erred when it concluded that there was no requirement to consider the impact of the decision challenged on health and social care.
(2) The court erred in rejecting Prestwick's arguments based on the Tameside duty of sufficient inquiry.
(3) The court erred when it found that there was no heightened standard of fairness.
(4) The court erred in concluding that Prestwick was given sufficient notice of the matters that it needed to address.
A fifth ground was not pursued at the appeal hearing. In his skeleton argument, Mr Southey identified the first ground as the principal issue. The other grounds would only arise for consideration if this Court accepted his arguments about impact.
The SCL case – (a) background
- In view of the issues raised in the second appeal – particularly those raised in SCL's respondent's notice – it is necessary to set out the facts in a little more detail.
- SCL is a domiciliary care provider (incorporated 2011) providing care across Westminster, Camden, Tower Hamlets, Newham and Enfield. In May 2021, it applied for a skilled worker sponsor licence ("the licence") which was granted on 13 July 2021. The licence permitted SCL to recruit up to 68 skilled migrants. At the time of the events under consideration in this appeal the company employed 162 workers in total.
- On 8 February 2022, a CoS was assigned to an employee from Bangladesh called Mahdia Rima. The summary of her job description in the CoS was as follows:
- "working together with the care team ensure that all residents care needs [sic]
- be aware of and deliver the physical care appropriate to each resident whilst at all times ensuring dignity, privacy and choice
- to be aware of and deliver and meet the emotional and psychological needs of each resident whilst at all times ensuring dignity, privacy and choice
- to participate in the keyworker system as directed by the Home Manager
- to undertake some administrative duties e.g. care plans
- to exercise responsibilities under H&S at work and to monitor residence condition by regularly taking temperatures, pulse, BP, & weight
- to communicate adequately through both verbal and written means with other members of the care team
- to ensure that all residents care needs are catered for by liaising with team managers and carrying out care plans for residents, and also be responsible for shifts and rotas
- to escort residents as necessary."
- On 4 April 2023, the SSHD's compliance team carried out a visit to check SCL's compliance with its sponsor obligations. In the course of the visit, interviews were conducted with the managing director, Mr Abu Taher, and several employees, including Ms Rima and another worker.
- Following the visit, on 11 May 2023, the SSHD sent a letter to SCL suspending its licence. The SSHD contended that SCL was in breach of the guidance in several respects, including their employment of Ms Rima and another named employee. The letter recited the job duties in Ms Rima's and the other named employee's CoS and summarised what each had stated their job roles were in their interviews. The letter continued:
"Both Ms Rima and [the other named employee] are employed as senior carers however from their interviews it is clear that they are not undertaking any senior or supervisory duties. Therefore we are not satisfied that the role of senior carer undertaken by Ms Rima and [the other named employee] represent genuine vacancies within your organisation."
The letter proceeded to recite paragraphs C1.38, C1.44, C1.46 and Annexes C1(s) and (z) but did not give any further particulars as to the basis on which the SSHD was alleging that the company was in breach of the Guidance.
- The letter then set out further allegations which were subsequently resolved and therefore do not arise on this appeal. It concluded by inviting SCL to make representations in precisely the same terms as found in the letter revoking Prestwick's licence i.e.
"To give you the opportunity to explain the above issues before we begin revocation action, we have suspended your licence with immediate effect. You have 20 working days from the date of this letter to make representations including, submitting evidence, in response to this letter."
- On 5 June 2023, SCL submitted its representations and accompanying documents in response to the suspension. The letter contained a detailed response to the various alleged breaches of the Guidance, and included a "statement of facts" signed by Ms Rima. In the letter, the company also stated that:
- "Services are provided to older people and younger disabled adults, with the company currently supporting around 210 people…."
- "The organisation works with local councils and NHS trusts to support vulnerable people. Without these roles the organisation would be unable to support the 210 people currently being cared by the organisation and its employees. Some of whom are extremely vulnerable."
- "[SCL] kindly request the reinstating of the sponsor licence to allow for the organisation to continue to work towards the fundamental role the organisation plays in the lives of over 210 individual's, across various London boroughs. The organisation has built a strong reputation amongst local councils, NHS and private individuals' in providing the high standard of domiciliary care and hope to continue to provide such services to the community."
- On 26 June, a senior caseworker in the SSHD's compliance team sent a letter to Mr Taher saying "We have considered your representations and have taken the decision to revoke your sponsor licence with immediate effect." In the letter, she set out findings of breaches relating to several employees, including Ms Rima. In particular, she noted that Ms Rima was employed as a senior carer and that duties as stated in the certificate of sponsorship included "to undertake some administrative duties e.g. care plans" and "to ensure that all residents' care needs are catered for by liaising with team managers and carrying out care plans for residents, and be responsible for shifts and rotas". The case worker stated that it was clear from the interviews of Ms Rima and another named employee that they were not undertaking any senior or supervisory duties and that "therefore we are not satisfied that the role of senior carer undertaken by Ms Rima and [the other named employee] represent genuine vacancies within your organisation".
- Having recited paragraphs C1.38, C1.44 and C1.46 from the Guidance, the caseworker under the heading "Consideration" set out the decision and reasons, including an assessment of the representations made by SCL in response to the suspension letter. Because of an error by the compliance team, she indicated that they were no longer relying on issues relating to the other named employee. She continued:
"15. However, regarding Ms Rima, you explained that she has undergone a senior level of training, including PEG feeding training which you state is only relevant to a senior care worker position or higher. You have provided evidence of Ms Rima's training certificates including her PEG feeding certificate.
16. You have provided a 'Statement of Facts' confirming her duties include the following:
- Working collectively with the care team to ensure all residents care needs are met
- Deliver the physical care appropriate to each resident.
- Participate in the keyworker system as directed by the Home Manager
- Monitor residents health condition by regularly taking temperatures, BP and weight
- Liaise with team managers and carry out care plans for residents
- Undertake some administrative duties.
17. However, the only attributable evidence you have provided, to demonstrate the work undertaken by Ms Rima, is a screen shot of a care report showing Ms Rima had prompted a client to take medication. You have provided no evidence to corroborate Ms Rima's statement that she allocates shifts and rotas nor any examples of the administrative duties she fulfils. It is important to note that the onus is on you and your sponsored workers to substantiate statements with evidence when claims are made.
18. You further state:
'It is imperative to point out that the interviews were conducted on the basis of incorrect facts around the positions held by the interviewed staff members. If Ms Rima was questioned about her tasks overall, she would have responded with all tasks she carries out as part of her role as a Senior Care Worker. As she was not questioned clearly, an assumption has been made around her job roles and duties.'
19. Ms Rima was interviewed as a Senior Care Worker under SOC code 6146 as stated on her CoS. Our record shows Ms Rima was asked what position she holds and what she does day to day. She was then given the opportunity to provide additional information and comments at the end of the interview before signing the declaration that the information provided 'is a full and accurate description of the conditions of employment being undertaken'."
The case worker stated that a time sheet for Ms Rima produced by SCL did not provide evidence of the work she had undertaken. The letter continued (at paragraph 21):
"you have failed to provide evidence to support your claim that Ms Rima is fulfilling the full range of duties outlined on her CoS. We continue to believe that the role of senior carer undertaken by Ms Rima does not represent a genuine vacancy within your organisation and has been exaggerated in order to facilitate her stay in the UK. Therefore, this issue has not been addressed."
The letter then recited Annex C1 (s) and (z) set out above.
- Having addressed other matters which have not featured in this judicial review claim, the letter concluded (in very similar terms to the revocation letter in the Prestwick appeal) with the ultimate decision:
"79. We believe the issues described above constitute a failure by you to comply with your sponsor duties.
80. We always take into consideration the potential impact revocation may have on a sponsor and consideration is always given to re-rating a sponsor licence to allow a sponsor to demonstrate full compliance with their sponsor duties if appropriate.
81. We have considered the possibility of downgrading your licence and issuing you with an action plan. However, we will only downgrade a licence and issue an action plan where there is scope to rectify shortcomings or omissions in systems or retained documents.82. As already stated, you have acted in contravention of Annex C1 s) and z) …. Downgrading your licence is not appropriate due to the seriousness of your non-compliance with your sponsor duties."
After reciting paragraph C10.4 of the Guidance, the letter continued:
"As a result, your sponsor licence has been revoked. There is no right of appeal against this decision."
- On 5 July, SCL sent a pre-action protocol letter challenging the decision to revoke. For the first time, under the heading "Global assessment of all factors", the company raised the issue of impact of revocation, in particular on its other employees, but made no reference to any impact on service users or the wider community. On 18 July, the SSHD responded, declining to withdraw the decision. On 27 July, SCL issued judicial review proceedings challenging the revocation decision on four grounds and served supporting evidence, in the form of witness statements from SCL's managing director and various other employees.
- On 24 August 2023, SCL was granted permission to apply for judicial review. Within the proceedings, the company filed a number of statements, including a statement by Mr Taher giving evidence as to the impact of revocation on the company, its employees and service users.
- On 15 November 2023, the claim was heard by HHJ Siddique (sitting as a judge of the High Court). On 19 January 2024, he handed down his judgment. The judicial review claim was allowed on one ground – SCL's fourth ground – that the SSHD had failed to conduct an adequately reasoned global assessment of all relevant considerations in deciding whether to revoke or downgrade the sponsor licence. An order was therefore made for the SSHD's decision to be quashed.
- On 9 February 2024, the SSHD filed a notice of appeal against the order. On 21 June, Arnold LJ granted permission to appeal. On 8 July, SCL filed a respondent's notice inviting this Court to uphold the Administrative Court's decision for the reasons given, and/or alternatively on additional grounds set out in the notice.
The SCL case – (b) the Administrative Court judgment
- Having set out the background, the judge summarised the grounds of judicial review advanced on behalf of SCL, namely that the SSHD
(1) acted in a procedurally unfair manner in relation to the interviews of Ms Rima and Mr Taher;
(2) failed to ask herself the correct question or make reasoned findings on material issues;
(3) misconstrued the guidance and certificate of sponsorship description, and arrived at an irrational or inadequately reasoned conclusion;
(4) failed to conduct an adequately reasoned global assessment of all relevant considerations in deciding whether to revoke or downgrade the sponsor licence.
- Under the first ground, the judge recorded the claimant's argument that a fair process required the serious allegations of dishonesty to be put to Ms Rima in interview. Had that happened, the claimant would have been able to demonstrate that her role was genuine and her duties matched the CoS job description, on which issue the claimant had filed a number of witness statements in support. The judge found that these submissions missed the mark. Although it might be said that Ms Rima and others had not been asked specific questions comparing her role with the CoS job description, the interview record showed that she had been asked questions about her duties. The allegations only arose after the interview and were fully put in the suspension letter. SCL was entitled to submit representations and evidence in response. That was the point when the eight witness statements filed in the judicial review proceedings could and should have been provided. The judge rejected an argument by Mr Malik KC for the claimant that the terms of the suspension letter indicated that the SSHD's mind was fixed. He held it was clear from the letter that the licence had only been suspended and the claimant was entitled to make further representations before the final decision.
- Under the second ground, the claimant argued that the SSHD had failed to ask or determine whether the "exaggeration" referred to in paragraph 21 of the letter was deliberate. The judge held (at paragraph 30 of his judgment) that a proper construction of the decision letter was that the SSHD decided that Ms Rima's role did not represent a genuine vacancy, that it had been deliberately exaggerated and that this amounted to a finding of dishonesty. It was further argued for the claimant that the fact that Ms Rima was performing six out of the eight duties listed in the CoS demonstrated that her role existed and that, in the absence of other evidence, it was irrational to conclude that there was dishonesty merely because she was not performing all of the duties. The judge concluded that, given the discrepancy between Ms Rima's interview and the duties listed in the CoS, an explanation was called for. Although it was not difficult to think of stronger cases of dishonesty, it was not unreasonable, given the claimant's "minimal" response, that the SSHD remained unconvinced and inferred dishonesty. He held that such an approach was consistent with the decision of this Court in Balajigari at paragraph 42.
- Under the third ground, it was argued that, in determining whether the role undertaken by Ms Rima matched the CoS job description, the case worker should have adopted a broad interpretation. The judge concluded that, given the serious consequences of revoking a licence, a purely literal and strict approach under which a licence could be revoked for very minor discrepancies may be considered unjust. On the other hand, "an interpretation that was too broad and allowed for substantial or significant variances would fail to meet the underlying principle behind a scheme based around trust and an expectation that those holding a sponsor licence will act in a manner that maintains proper immigration control". In this case, he held that "an objectively undertaken qualitative assessment" of the duties on the CoS list that Ms Rima was not carrying out "could not realistically conclude that they are very minor or meaningless".
- Under the fourth ground, the judge cited the legal principles governing the revocation of licences in Raj and Knoll, supra. At paragraph 50, he found:
"An analysis of the decision letter of 26 June 2023 indicates that there is no reference by the Secretary of State to the impact of the decision to revoke the sponsor licence on the Claimant's 68 migrant workers and families, the vulnerable individuals under their care or to the adverse impact to the Claimant's services and the wider industry if it becomes unable to fulfil its contracts. Instead, the Secretary of State adopted a holistic approach…."
The judge then cited paragraphs 80 and 81 of the decision letter. He accepted Mr Malik's submission that it was not enough for the SSHD to make a "general passing comment" that she always considers the potential impact of revocation. Although she was entitled to take a firm approach, she was not absolved from engaging with the facts of the case and explaining why it was reasonable and proportionate to revoke the licence.
- At paragraph 55 of his judgment, he then set out his reasons for allowing the application for judicial review on the fourth ground:
"The content of the decision letter and indeed the pre-action protocol response from the Secretary of State indicates that the principal, if not only, reason why the licence was revoked was because the policy stated revocation was mandatory in the circumstances. There was no actual or at least demonstrable engagement with any other consideration such as the impact of revocation upon the other 67 migrant workers and their families, the vulnerable individuals under care or to adverse impact to the Claimant and the wider industry. There was similarly no engagement with the question of whether revocation in such circumstances is reasonable and proportionate when a finding in relation to dishonesty related only to the role of a single employee from a workforce of 162 workers, including 68 skilled migrant workers. In those circumstances, I find that on the balance of probabilities the Claimant has demonstrated that the Secretary of State failed to conduct an adequately reasoned global assessment of all relevant considerations in deciding whether to revoke or downgrade the sponsor licence. I therefore allow this fourth ground of judicial review."
On that ground, the revocation decision dated 26 June 2023 was quashed.
The SCL case – (c) Grounds of Appeal
- The SSHD advanced the following grounds of appeal against the decision of the Administrative Court:
(1) The judge materially erred in concluding that, where a mandatory ground for revocation was established, the SSHD was required to go on and (i) assess the potential impact of the revocation on the Claimant's business, its employees, those who receive care services and the wider care industry, and (ii) provide reasons setting out the proportionality of the assessment undertaken by reference to these factors and the competing public interest militating in favour of revocation.
(2) In considering the extent of any obligation the SSHD had to give reasons relating to the exercise of its residual discretion, the judge erred in failing to consider the fact that the claimant had (i) made no submissions relating to the potential impact of the revocation on its business/employees/wider industry/service users and (ii) not provided any evidence in relation to those matters, prior to the decision to revoke the sponsorship licence.
(3) The judge materially erred in finding that the SSHD had failed to properly consider the impact of the revocation.
(4) The judge materially erred in failing to consider, by reference to the limited information available at the date of the hearing, how any failure to give reasons amounted to a material error of law.
(5) Alternatively, the judge materially erred in failing to consider s.31(2A) of the Senior Courts Act 1981 and conclude that it was highly likely that, having regard to the limited information available, the defendant would have lawfully come to the same decision.
In the event, the SSHD did not pursue this last ground, recognising that s.31(2A) had not been cited to the judge.
- The additional grounds for quashing the decision set out in the respondent's notice were as follows.
(1) The SSHD had acted in a procedurally unfair manner in relation to the interviews of Ms Rima and Mr Taher.
(2) The SSHD had failed to ask herself the correct question or make reasoned findings on material issues.
(3) The SSHD had misconstrued the guidance and CoS description, and, moreover, arrived at an irrational or inadequately reasoned conclusion.
The common issue - submissions
- The question common to both appeals is whether, where a mandatory ground for revocation of a licence is established, the SSHD is required to assess the potential impact of the revocation on the claimant's business, its employees, those who receive care services and the wider care industry. In the Prestwick judgment, HH Judge Kramer answered the question in the negative. In the SCL judgment, HH Judge Siddique answered it in the affirmative. Before us, the argument for the affirmative was principally presented by Mr Hugh Southey KC, leading Mr David Sellwood, on behalf of Prestwick, the appellant in the first appeal, supported by Mr Zane Malik KC leading Mr Tahir Khan, on behalf of SCL, the respondent in the second appeal. The argument for the negative was presented by Mr David Manknell KC, leading Mr Matthew Hill, on behalf of the Secretary of State, the respondent in the first appeal and the appellant in the second.
- Under the first and primary ground of appeal advanced on behalf of Prestwick, Mr Southey contended that the judge had erred in concluding that there was no requirement to consider the impact of the decision challenged on health and social care. When deciding whether to revoke a licence, the SSHD was required to balance the interests of immigration control with the impact of revocation on health and social care, and the need to promote the provision of health and social care where possible. By including health and social care workers on the list of occupations in respect of which a CoS could be awarded, the SSHD impliedly accepted that the provision of social and health care was a relevant factor when exercising her statutory powers, including the power to revoke a licence.
- Mr Southey further argued that the judge had been wrong to conclude (at paragraphs 92 – 93) that it would not be possible to obtain reliable evidence of impact. In fact, there was uncontested evidence before him to the effect that the revocation of the licence would have a negative impact on the company, its employees and those who depend on its services. The evidence included the email from Gateshead Council quoted at paragraph 42 above, demonstrating that, if Prestwick's licence was revoked, the local authority might be unable to comply with its duties to provide care. Furthermore, the statement of Mr Magee filed in the proceedings confirmed that the SSHD was aware of the impact on the community.
- Mr Southey submitted that the SSHD could be required to exercise her immigration powers to ensure that local authorities were able to comply with their statutory duties. The principle in Padfield v Minister of Agriculture [1968] AC 997 – that statutory powers must be exercised in a manner that promotes the objective of legislation – extended to imposing an obligation to exercise powers under one statute in a manner that is consistent with the objective of another: R (OneSearch Direct Holdings Ltd) v York City Council [2010] PTSR 1481 per Hickinbottom J at paragraph 24.
- Mr Southey also relied on an observation of Chamberlain J in R (ECPAT) v Kent County Council [2023] EWHC 1953 (Admin). That case involved a number of claims for judicial review arising out of the SSHD's response to a local authority's decision to refuse to accommodate more than a certain number of unaccompanied asylum-seeking children, including the SSHD's accommodation of children in hotels. At paragraph 206 Chamberlain J said:
"remedying a breach of duty by one public authority may often require action by another, particularly where the remedy may involve the provision of additional funding."
Mr Southey submitted that this supported the argument that, as a matter of principle, immigration powers had to be exercised in a manner that took account of statutory obligations on local authorities to promote health and social care.
- The statement at paragraph 95 of the revocation letter in Prestwick, repeated at paragraph 80 of the letter in SCL, ("we always take into consideration the potential impact revocation may have on a sponsor") should not be read as confined to the impact on the company. It would be illogical to take account of the narrow impact on the appellant but not take account of the wider impact on the public interest, particularly given the potential impact on the life expectancy of care home residents.
- Mr Southey further submitted that the judge had been wrong to rely on systems of mitigation as meaning that there was no need to take account of the impact of revocation on health and social care. There was no evidence that the systems of mitigation would or could avoid the serious consequences identified in Prestwick's evidence. The judge had been wrong to suggest that this argument meant that the SSHD would be compelled to grant a sponsor licence even when all trust was lost and equally wrong to describe this matter as essentially political. The legal duty requiring her to take account of the impact on health and social care was consistent with political accountability.
- Responding to Prestwick's appeal on behalf of the SSHD, Mr Manknell submitted that the proposition that the SSHD had to consider the impact of revocation before reaching her decision had no basis in either law or under the Guidance. To impose such an obligation would be contrary to the consistent and clear interpretation in the case law, including the decisions of this Court in Raj and Knoll and St. Andrew's College. The result would significantly undermine the regime in the Guidance. A sponsor licence is something that some providers seek, for their own advantage, in order to give themselves potential access to an additional labour market, which they see as having a perceived benefit to them. But they do so on strict terms contained in the Guidance. Their choice to seek a sponsor licence is done in the full knowledge that, if they fail to meet the requirements of the Guidance, then the consequences provided for in that same guidance will apply.
- Mr Manknell pointed out that Prestwick had chosen not to include any representations at all as to the impact of revocation on users, or the ability of local authorities to meet their care obligations. Those matters were raised only after the decision in question had been made. Prestwick's case was tantamount to arguing that the SSHD, being aware in general terms of the impact of revocation, should have given specific consideration to the impact on the care sector of revoking the sponsor licence, and that it was unfair not to do so, notwithstanding that Prestwick had not sought to raise this issue, nor provided any evidence whatsoever of any anticipated impact, prior to the revocation decision. Mr Manknell submitted that the SSHD was under no such obligation.
- In the SCL appeal, Mr Manknell submitted on behalf of the appellant SSHD that, having found that the breach was a deliberate breach of a mandatory ground for revocation, the judge had erred in law by imposing a series of additional requirements on the SSHD before the licence could be revoked, namely an obligation to engage with the impact of revocation on (a) the migrant workers and their families, (b) individuals receiving care from SCL, and (c) SCL's business and the wider industry. In doing so, he failed to have due regard to the context in which the revocation decision was made, and the effect and nature of the Guidance. The Guidance makes it clear that mandatory breaches will result in revocation, and that downgrading will not be appropriate in those cases. The mandatory consequences of a serious breach reflect the SSHD's decision that wider policy considerations relating to effective immigration control and the integrity of the sponsorship system require revocation of the licence irrespective of the impact.
- In line with his submissions responding to the Prestwick appeal, he argued that the additional requirements imposed by the judge had no basis in the Guidance or case law and were in fact contrary to case law as to the nature of the mandatory grounds for revocation. The outcome of the judge's decision in the SCL case was a significant undermining of the regime set out in the Guidance. Strict compliance is "vitally necessary to ensure that there is effective immigration control" and, as such, the SSHD is entitled to have "a 'light trigger' in deciding when and with what level of firmness she should act" (per Haddon-Cave LJ in St Andrew's College). Such a decision is taken in the context of a system of immigration control in which the emphasis is on "certainty in place of discretion, on detail rather than broad guidance". Whilst the SSHD plainly has a residual discretion as a matter of public law, there is no obligation on the decision-maker to address or provide reasons as to the non-exercise of this residual discretion in individual cases, in the absence of a particular reason to exercise it, for a reason that is not already factored into or provided for in the Guidance.
- The first occasion when SCL submitted any evidence as to the potential impact of revocation on services users and the wider community was after the proceedings were issued. Thus, under the SSHD's second ground of appeal, it was argued that the judge had erred in failing to consider the fact that SCL had put forward no case as to potential impact of revocation prior to the revocation decision. In any event, as set out in the third ground, there was no basis for the finding that the SSHD had failed to consider impact. Paragraph 80 of the letter stated: "we always take into consideration the potential impact revocation may have on a sponsor".
- Furthermore, SCL's evidence, even if accurate, did not assert or establish that SCL's business would cease to operate if the licence was revoked, nor did it include any detail as to any adverse impact arising from the revocation on service users, the wider care industry, or on the 67 other skilled migrants sponsored by SCL. Given the SSHD's expertise is in immigration control rather than commercial viability or wider issues of care provision, there was no basis which could legitimately require an exercise of residual discretion in favour of SCL given the serious breach of the Guidance.
- Finally, Mr Manknell drew attention to the fact that, in three cases decided at first instance by deputy High Court judges since the judgments in the two cases under appeal, all three judges had elected to follow the decision in Prestwick rather than SCL: see R (New Hope Care) v SSHD [2024] EWHC 1270 (Admin) (David Pievsky KC), R (One Trees Estates Ltd) v SSHD [2024] EWHC 1644 (Admin) (Margaret Obi) and R (Tendercare Management) v SSHD [2024] EWHC 2154 (Admin) (Richard Kimblin KC).
- Responding to the SSHD's grounds of appeal in SCL, Mr Malik adopted Mr Southey's legal analysis. He submitted that the SSHD has a broad discretion following a finding that a sponsor has breached the terms of the guidance. The dicta in the case law emphasising the reasons for a firm response to a breach of the guidance are of limited assistance in relation to the question of discretion. There was a range of options available to the SSHD – to give formal advice to the company, to issue a warning or reprimand, to construct an action plan, to restrict the sponsor's ability to employ more skilled migrants, to suspend a licence as a sanction for a defined period, to downgrade the licence, to revoke the licence from a future date to allow transition arrangements, or to revoke it with immediate effect. The potential impact of revocation was relevant to the decision as to which option was appropriate.
- Mr Malik refuted the assertion in the SSHD's second ground of appeal – that SCL had put forward no case as to potential impact of revocation prior to the revocation decision – and cited the passages in the company's letter dated 5 June 2023 quoted in paragraph 63 above. He submitted that, although the revocation had stated "we always take into consideration the potential impact revocation may have on a sponsor", there was no real engagement with the points about impact raised in the letter. Whilst Mr Malik did not suggest that the SSHD had acted in bad faith, he argued that the stock phrase used in the letter gave no indication that the SSHD had actually considered the impact of her decision. The judge had been right to hold that this "general passing comment" was not enough and equally right in paragraph 55 of the judgment to identify a series of relevant considerations with which the SSHD had failed to engage and were patently obvious to the SSHD from the information available to her when the revocation decision was taken.
The Common Issue – Discussion
- I accept the SSHD's submission that the additional requirements contended for on behalf of Prestwick and SCL have no basis in statute or the Guidance, that their imposition would be contrary to the principles established in case law, including in this Court, and that their imposition would significantly undermine the regime contained in the Guidance.
- Lord Sumption in New London College described the rules of the scheme as the conditions of participation. "Sponsors seeking the advantages of a licence cannot complain if they are required to adhere to them." As Mr Manknell characterised it, a sponsor licence is something that some providers seek, for their own advantage, in order to give themselves potential access to an additional labour market, which they perceive as giving them a commercial benefit. They do so, however, on strict terms contained in the Guidance. When applying for a licence, they know that, if they fail to meet the requirements of the Guidance, the consequences provided for in the Guidance will apply. HHJ Kramer was right in his judgment in the Prestwick case to emphasise "the precarious nature of the licence as a privilege not a right" and the "high level of trust placed in the sponsor". That is entirely consistent with the principles summarised by this Court in St Andrew's College – the high level of trust is, as Haddon-Cave LJ put it, the essence of the system.
- The issue for the SSHD in each of the cases under appeal was the impact on the integrity of immigration control of the company's serious breach of the Guidance, not the consequences for the company and others of removing the sponsorship privilege that it had been afforded. I do not accept Mr Southey's submission that the Secretary of State was obliged to exercise her powers under the Immigration Act in a manner that is consistent with the objectives of social care legislation. The authority cited for that proposition was the decision of Hickinbottom J in R (OneSearch Direct Holdings Ltd) v York City Council [2010] EWHC 590 (Admin), [2010] PTSR 1481. But it is important to note the cautious terms used by Hickinbottom J when addressing the proposition. He said (at paragraph 24):
"As a matter of principle, although it may be easier in practice to show that Parliament could not have intended the grant of a power in a statute to defeat the very purpose of that same Act, I do not see why a court might not conclude that Parliament could not have intended that a power in one statute be exercised in a way that would utterly defeat the purpose of another statute: although that would be very much dependent upon the circumstances of a particular case, including, most importantly, the wording and even (possibly) timing of the specific statutory provisions. The dearth of examples from the authorities shows just how rare such cases might be, and the caution with which the courts would infer such an intention. Mr Fordham was unable to provide any such examples; but, as a matter of law, such a construction is not impossible and, as statutory schemes and relationships become more complex, it may be that such a construction is more likely to find favour. However, intellectually, it requires the court to conduct the same exercise as that performed in Padfield's case, namely one of construing the intention of Parliament through the words they have used in the relevant statutory provisions."
- I do not read this passage as providing any support for the principle proposed by Mr Southey that the Secretary of State was obliged to exercise her powers under the Immigration Act in a manner that is consistent with the objectives of social care legislation. Nor do I find any support for the proposed principle in the isolated observation made Chamberlain J in a very different context at paragraph 206 of his judgment in R (ECPAT) v Kent County Council [2023] EWHC 1953 (Admin) to which Mr Southey referred.
- The reason for the caution which Hickinbottom J counselled should be exercised by courts being asked to infer such an intention is amply illustrated by the circumstances of the present appeals. It would be wholly impractical to require the Secretary of State, when deciding whether to revoke a licence after a breach of the sponsor duties, to analyse the potential consequences for other public bodies to determine the impact of revocation on their statutory duties. A wide range of other public bodies may be affected one way or another by revocation. The Secretary of State is simply not equipped, in skills or resources, to carry out such an assessment. In any event, the power to revoke licences was not being exercised in a way that would utterly defeat the purpose of social care legislation. The sponsorship scheme is designed to meet labour shortages in certain areas of the economy, including the provision of social care. In facilitating the admission of foreign nationals to the country without going through the usual process of applying for leave to remain, the scheme imposes strict conditions and identifies in clear circumstances where revocation of the licence is mandatory. Any adverse impact on the provision of services under the social care legislation is attributable to the breaches of the conditions on which the licence was awarded rather than the revocation of the licence which resulted from those breaches.
- In my view, the law was correctly summarised in the judgment in one of the cases decided after the two decisions under appeal, R (One Trees Estates Ltd) v SSHD [2024] EWHC 1644 (Admin). In following the first instance decision in Prestwick in preference to the decision in SCL, the deputy judge, Margaret Obi, said (at paragraph 36):
" ….although the Secretary of State has a residual discretion, … in the absence of a particular reason to exercise it (for a reason that is not already factored into or provided for in the Guidance), there is no obligation to address or provide reasons for not exercising this residual discretion in individual cases. No such reason was provided in the Claimant's written representations. dated 30 June 2023…. The Secretary of State was required to focus on the impact on the integrity of immigration control and the Sponsorship regime; not the consequences for the Claimant. The revocation decision, and the "global assessment" issue, must be considered in the context of the decision as a whole. The Secretary of State has a responsibility to ensure that registered sponsors comply with the Guidance, and stringent use of its powers is important to its overall effectiveness. Therefore, the Secretary of State, having decided that downgrading the Claimant's licence as an alternative to revocation would not be appropriate, was not required to assess the impact of revocation on the Claimant's business, employees, service users, and the wider social care sector."
- Ms Obi was right to say that there was a "residual discretion". Although the SSHD was under no obligation to have regard to the impact of revocation, it was open her to consider it if she chose to do so. As Mr Magee acknowledged in his witness statement, the SSHD was aware of the impact that a sponsor licence revocation can have on a company, its employees and the wider community, and took steps to mitigate the consequences of revocation, for example by informing DSHC of action taken against sponsors to enable that department to identify any risks to the disruption of care provided to service users and in some cases arranging for visa cancellation action to be paused for a limited period to allow continuity of care until alternative sources of care are arranged. But she was under no obligation to have regard to the impact of revocation before deciding to revoke the licence.
- As Singh LJ suggested during the hearing before us, it is instructive to analyse this issue by reference to the categorisation of material considerations in R v Somerset County Council, Ex p Fewings, as approved and developed by the Supreme Court in the Friends of the Earth case. The impact of revocation is not a factor which is either prescribed or proscribed in the Guidance. It therefore falls into the third category, a factor to which the decision-maker may have regard if in his judgment and discretion he thinks it right to do so. Where, as here, the decision-maker does not advert to a consideration at all, the decision is not unlawful unless the consideration is obviously material according to the Wednesbury irrationality test. Where it is taken into account, but given no weight, that is again not open to challenge unless the decision-maker acts irrationally. Subject to the test of rationality, the weight to be given to a particular consideration is a matter for the decision-maker, and this includes that a decision-maker might lawfully decide to give a consideration no weight.
- In my judgment, the impact of revocation is a consideration which falls within the third category identified in the Friends of the Earth case. In the present cases, it was not irrational for the SSHD not to advert to impact at all in deciding to revoke the licences. In so far as she turned her mind to impact, it was not irrational for her to give it no weight at all.
- In these cases, Prestwick in responding to the suspension letter made no representations as to potential adverse impact of revocation whereas SCL did make the points highlighted by Mr Malik. In both cases, the SSHD said when revoking the licence that she had considered the representations and that "we always take into consideration the potential impact revocation may have on a sponsor". There is no basis for this Court to conclude that the SSHD did not consider the representations made. The fact that the SSHD used standard phrases in the revocation letters does not in my judgment give rise to any inference that there been no "reasoned engagement" with the issue.
- In the circumstances, I do not accept the argument advanced in support of the appeal in the Prestwick case that the SSHD was obliged in law to give specific consideration to the impact on the care sector before revoking the sponsor licence, and that it was unfair not to do so, notwithstanding that Prestwick had not sought to raise this issue, nor provided any evidence whatsoever of any anticipated impact, prior to the revocation decision. I do accept the SSHD's argument in support of the SCL appeal that, having found that the breach was a deliberate breach of a mandatory ground for revocation, the judge wrongly held that the SSHD was under an obligation to engage with the impact of revocation before the licence could be revoked.
Prestwick's other grounds of appeal
- Prestwick's remaining grounds of appeal were all said to be subsidiary to the first. Under the second ground, it was argued that the judge erred in rejecting Prestwick's arguments that the SSHD was subject to a Tameside duty of sufficient inquiry. Even if, contrary to the first ground of appeal, there was no obligation to consider the impact, the SSHD had stated in the letter that "we always take into consideration the potential impact revocation may have on a sponsor". This acknowledgement that impact was relevant to the decision gave rise to the Tameside duty. There had been no or no adequate efforts to seek details of the impact of the revocation of the sponsor licence.
- Under the third ground, it was contended that the judge had erred in holding that there was no heightened standard of fairness. Mr Southey cited the observations of Lord Reed JSC in R (Osborn) v Parole Board [2013] UKSC 61, [2014] AC 1115
(a) at paragraph 67, that
"one of the virtues of procedurally fair decision-making is that it is liable to result in better decisions, by ensuring that the decision-maker receives all relevant information and that it is properly tested";
(b) at paragraph 68, that
"justice is intuitively understood to require a procedure which pays due respect to persons whose rights are significantly affected by decisions taken in the exercise of administrative or judicial functions";
and
(c) at paragraph 71, that
"[p]rocedural requirements that decision-makers should listen to persons who have something relevant to say promote congruence between the actions of decision-makers and the law which should govern their actions".
It was accepted that procedural fairness is a question of law and context-specific. Mr Southey submitted that given the potentially grave implications of the decision – the serious social impact of the revocation, the fact that what was being withdrawn had been enjoyed by Prestwick for a considerable period, and the fact that there was no appeal against the decision – a high standard of procedural fairness was required, particularly as the SSHD had expressly said that the potential impact was always taken into consideration.
- Under the fourth ground of appeal, Mr Southey submitted that the judge erred in concluding that Prestwick was given sufficient notice of the matters that it needed to address. The right to make representations implies a right to know the case that needs to be addressed in those representations. The letter dated 6 December 2022 suspending Prestwick's licence invited the company to make representations "in response to this letter", the implication being that the representations should address the alleged breaches of license conditions. There was no suggestion that the representations were intended to address wider issues. In the hearing before us, Mr Southey was taken to paragraph C9.11 of the Guidance where the representations in response to a letter of suspension were said to be the "opportunity to seek a review of our decision and to set out any mitigating arguments you believe exist". Mr Southey submitted that "mitigating arguments" was an ambiguous phrase which could refer, narrowly, to the circumstances of the breaches or, more broadly, to arguments based on the consequences of revocation of the licence. It was not unreasonable for the company to read the Guidance in the light of the letter and conclude that the representations should focus on the alleged breaches.
- On the second ground of appeal, in response on behalf of the SSHD, Mr Manknell submitted that the judge had been right to hold that the SSHD was not subject to a Tameside duty of sufficient inquiry. There was no investigation that was reasonably required, given that impact is not relevant to whether a breach is mandatory, or whether an alternative remedy (such as downgrading) constitutes an adequate alternative to revocation. The imposition of such a duty to investigate the impact of a revocation decision would be directly contrary to the principles set out by the Court of Appeal relating to the sponsorship scheme. Mr Magee's evidence, cited by the judge at paragraph 29 of his judgment, to the effect that there was a system in place for mitigations, did not amount to an acceptance that the SSHD had undertaken an assessment of impact so as necessitate the Tameside level of scrutiny in order to safeguard healthcare.
- In response to the third ground, Mr Manknell cited the observation of Tomlinson LJ in Raj and Knoll at paragraph 32 quoted above in which he expressed scepticism that the supervision of the sponsorship scheme by the SSHD attracts an enhanced standard of judicial scrutiny. It was submitted the standard of fairness required depended on the context. Mr Manknell cited the observation of Alison Foster QC in her judgment in Goldcare, at paragraph 36:
"Procedural propriety depends on the subject matter of the decisions, the executive functions of the decision-maker and the particular circumstances in which the decision is made (CCSU v Minister for Civil Service [1985] AC 374) and also that what fairness requires depends on the character of the decision-making body, the kind of decision it has to make and the statutory or other framework in which it operates …."
In the context of sponsorship licences, the process which an applicant is entitled to have followed prior to a decision was set out in the Guidance. The SSHD accepted that, subject to any good reason for departing from the Guidance, a sponsor was entitled to expect that, when decisions relating to suspension and revocation are being considered, the Guidance would be applied. A sponsor was not entitled, however, to any greater protections than provided for in the Guidance.
- As for the fourth ground, Mr Manknell submitted that the judge had been entitled to reject Prestwick's complaint that it was given insufficient notice. The structure and rules of the sponsor system, as contained in the Guidance, had checks and balances, struck appropriately, which set out the notice that a sponsor should be given. A sponsor familiar with the Guidance should have been fully aware of the compliance provisions.
- On Prestwick's second and third grounds, I accept the SSHD's submission that she was not subject to a Tameside duty of sufficient inquiry nor required to apply a heightened standard of fairness. The imposition of a Tameside obligation to investigate the impact of a revocation decision would be directly contrary to the principles set out by the Court of Appeal relating to the sponsorship scheme. The fact that, as acknowledged in Mr Magee's statement, the SSHD was aware of the impact that revocation can have on a company did not give rise to such an obligation. As the deputy judge observed in Goldcare, "what fairness requires depends on the character of the decision-making body, the kind of decision it has to make and the statutory or other framework in which it operates". Here, the process to which a sponsor was entitled to have followed prior to a revocation decision was set out in the detailed provisions in the Guidance. A sponsor was not entitled to any greater protections than provided for in the Guidance. In most, if not all, circumstances, the supervision of the sponsorship scheme by the SSHD will not attract an enhanced standard of judicial scrutiny. Prestwick have not demonstrated any circumstances in their case which required greater scrutiny than provided for in the Guidance.
- There is no merit in Prestwick's final ground of appeal. I do not accept the argument that the procedure adopted on behalf of the SSHD was unfair because the company was not asked for evidence of impact. The letter suspending Prestwick's licence invited the company "to make representations including, submitting evidence, in response to this letter" (emphasis added). Of course, the wording of this letter is not decisive. It is important to remember, as Singh LJ observed during the hearing, that we are not construing a statute or a contract. It also occurred to me that the letter may have contained a typographical error and that the author intended to put the comma before the word "including" rather than after, although it is notable that invitation to make representations in the suspension letter to SCL was in identical terms. Notwithstanding those caveats, it seems to me fair to conclude that in both cases the terms of that invitation were not confined to seeking representations in response to the allegations.
- In any event, in the context of the overall scheme established in the Guidance, with which all licence holders were expected to be fully familiar, it should have been plain to the company that the request for representations was their opportunity to put forward all relevant arguments against the revocation of the licence. Paragraph C9.11 of the Guidance stated:
"You have 20 working days from the date of the written notification to respond to our letter. This is your opportunity to seek a review of our decision and to set out any mitigating arguments you believe exist. Your response to us must be in writing and set out, with any relevant supporting evidence, which grounds you believe to be incorrect and why." [Emphasis added]
In my view, "mitigating arguments" plainly encompassed not merely the circumstances of the breaches but extended to broader arguments about the consequences of revocation. I note that this was the interpretation adopted by the deputy judge in one of the subsequent cases (see R (New Hope Care) v SSHD [2024] EWHC 1270 (Admin) at paragraph 112). I do not accept the submission that the letter only invited responses to the allegations and that it was therefore reasonable to read the Guidance in the light of the letter. On the contrary, the sponsors were expected to read the letter in the light of the Guidance. For my part, in Prestwick's case, I am not persuaded that there was any unfairness in the SSHD's conduct.
- For those reasons, I would dismiss Prestwick's appeal against revocation of their licence.
- The outcome of the SSHD's appeal in the SCL case turns on the company's Respondent's Notice, to which I now turn.
SCL's Respondent's Notice - submissions
- SCL invite this Court to uphold the judge's decision on three other grounds.
(1) The SSHD had acted in a procedurally unfair manner in relation to the interviews of Ms Rima and Mr Taher.
(2) The SSHD had failed to ask herself the correct question or make reasoned findings on material issues.
(3) The SSHD had misconstrued the guidance and CoS description, and, moreover, arrived at an irrational or inadequately reasoned conclusion.
There is considerable overlap between these grounds and it is convenient to consider them together.
- Mr Malik submitted that interviews of Ms Rima and Mr Taher had not been conducted in accordance with the common law duty of fairness, as defined by the Supreme Court in Bank Mellat v HM Treasury (No.2), supra, and applied in immigration cases by this Court in Balajigari. The allegation that there was no genuine job vacancy was never put to Ms Rima or Mr Taher for comment. They were not asked specific questions as to the apparent discrepancies between the job description in her CoS and her actual duties. No fair opportunity was given to them to respond to potentially adverse matters that were ultimately raised in the Secretary of State's decision, as she said in the suspension letter.
- Having conducted the interviews, the SSHD concluded, as set out in the suspension letter:
"from their interviews it is clear that they are not undertaking any senior or supervisory duties. Therefore we are not satisfied that the role of senior carer undertaken by Ms Rima and [the other named employee] represent genuine vacancies within your organisation."
Mr Malik submitted that this demonstrated that the SSHD had already reached a decision that the vacancy was not genuine. In doing so, she contravened the principles of procedural fairness. The judge's finding that the opportunity to make submissions following the suspension decision was sufficient was contrary to the view of this Court in Balajigari, at paragraph 60.
- Mr Malik cited the judge's conclusion (at paragraph 30 of his judgment) that a proper construction of the decision letter was that the SSHD decided that Ms Rima's role did not represent a genuine vacancy, that it had been deliberately exaggerated and that this amounted to a finding of dishonesty. But before such a finding could be made, there had to be an investigation which complied with the common law duty of fairness. In this case, allegations of dishonesty had not been put to Ms Rima or Mr Taher in interview. Furthermore, although the suspension letter recorded that the SSHD was not satisfied that there was a genuine vacancy, it failed to spell out with any or any sufficient clarity that the SSHD suspected that SCL had deliberately (i.e. dishonestly) exaggerated the job description. The letter recited several paragraphs of the Guidance without indicating whether, and if so on what basis, the SSHD suspected the company of dishonesty. This was a further contravention of the principles of common law procedural fairness as defined in Balajigari. At no stage prior to the revocation decision did the SSHD allege dishonesty or suggest deliberate wrongdoing.
- In paragraph 21 of the revocation decision, the SSHD concluded that SCL had "exaggerated" Ms Rima's role. Mr Malik submitted, however, that she never applied her mind to the question whether the alleged exaggeration was deliberate (that is to say, dishonest). Had she done so, she ought to have concluded that there was in fact no deliberate attempt by SCL to undermine immigration control. The roles of both care worker and senior care worker were included in the scheme. There was no benefit for SCL in issuing Ms Rima a CoS as a senior care worker instead of a care worker – had they issued her with a CoS as a care worker, she would still have been granted the same leave. Accordingly, there was no logic behind the finding that SCL exaggerated the job description so to facilitate her stay in this country. Thus, on the issue of dishonesty, the SSHD had failed to ask herself the correct question or make reasoned findings.
- Mr Malik further submitted that the SSHD had reached her conclusions on a basis that was contrary to the principles set down by this Court in Balajigari at paragraphs 42-43. A finding that there is no genuine vacancy was a finding of bad faith which had very serious consequences not only for the skilled migrant but also for the licence holder and its other employees. If after conducting her investigation, she was satisfied that the licence holder had dishonestly created vacancies that were not genuine, she was entitled to suspend or revoke the licence. But the burden of proving dishonesty lay with the SSHD. She was not entitled to place the burden on the licence holder to prove the negative and, if she concluded that he had failed to do so, revoke the licence on the basis that she was not satisfied that there is a genuine vacancy. The Guidance therefore entitled the SSHD to revoke the licence if any of the proscribed circumstances arose. It did not entitle her to revoke it on the basis that there was insufficient evidence to satisfy her that the circumstances had not arisen.
- Under the third ground, Mr Malik prayed in aid the principles that "the interpretation of administrative policy documents is a matter of law which the court must … decide for itself" (Mandalia v Secretary of State for the Home Department [2015] UKSC 59) and that such statements "should be interpreted objectively in accordance with the language used, read as always in its proper context" (Tesco Stores Limited v Dundee City Council [2012] UKSC 13). He submitted that, when considering whether a vacancy is genuine, a decision maker and subsequently the court should consider the job description as a whole. Where a vacancy exists in practice and the person in it is carrying out most of the functions in the job description prescribed by it, in particular if the functions being performed include the primary role, it cannot be said to be a vacancy that is not genuine.
- In this case, the SSHD wrongly proceeded on the basis that, if an individual was not performing every task of the role in question, their vacancy was not genuine. Her approach was inconsistent with the natural and ordinary meaning of the phrase "genuine vacancy". The primary duty under Ms Rima's CoS was the first – "working together with the care team [to] ensure that all residents care needs [are met]". The remaining elements of the job description were additional duties which she would be required to do at some point in the course of her employment. As the SSHD was satisfied that Ms Rima was performing the primary duty and the majority of the rest of the duties under the job description, it was not open to her to hold that there was no genuine vacancy. The revocation letter did not explain the basis on which the SSHD concluded that the role undertaken by Ms Rima did not match the job description on the CoS assigned to her so as to bring the case within the mandatory ground for revocation in Annex C1(s) or that it was a sham.
- The SSHD's response to the grounds raised in SCL's Respondent's Notice was set out in the written skeleton argument prepared by Mr Manknell and Mr Hill, supplemented by succinct oral submissions by Mr Hill. The measures needed to allow for a fair procedure are context and decision-specific. Here, the context was the sponsorship scheme, the essence of which is, as articulated in St Andrew's College, that the Secretary of State imposes "a high degree of trust" in sponsors granted licences in implementing and policing immigration policy and, as a result, 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. If SCL's arguments were accepted, relatively junior civil servants would be required to consider whether the interviews conducted during inspections were of sufficient forensic quality to survive judicial review and, if they concluded they were not, to discount the information or repeat the interviews. This would introduce a degree of legalism which would be inconsistent with the notion of a light trigger.
- In assessing whether the procedure had been fair, the process had to be considered as a whole. The procedure adopted was in accordance with that prescribed by Lord Mustill in Ex p Doody. The company was informed of the gist of the case it had to meet and was given the opportunity to make representations which were then taken into account. The SSHD's suspicions had been justifiably aroused because Ms Rima's description of her duties did not include undertaking administrative duties such as care plans or being responsible for shifts and rotas, but the SSHD's mind was not "unduly fixed". She invited SCL to submit representations before the revocation decision was taken and when it was "at a formative stage" (Balajigari paragraph 60). After receiving the suspension letter, SCL had a fair opportunity to respond to the SSHD's concerns. That response included a "statement of facts" signed by Ms Rima in which she contradicted what she had said in interview. SCL's failure to produce evidence to disabuse the impression that the SSHD had formed was not a consequence of procedural unfairness but rather because such evidence did not exist.
- It was further submitted that the judge had been right, for the reasons he gave, to reject the argument that the SSHD had failed to ask the correct question or make reasoned findings on material issues, in particular the issue of dishonesty. The SSHD had been entitled to be suspicious about the clear discrepancy between Ms Rima's job description and her actual role. The discrepancy called for an explanation which the SSHD invited in the suspension decision. Given the stark difference between what Ms Rima had said in interview and the claims made in SCL's representations, and the absence of evidence to support those claims, the SSHD was entitled to infer that SCL was not acting with the honesty and integrity that the privileged position of a sponsor required. This approach was consistent with the principles set out in Balajigari at paragraph 42.
- Mr Manknell and Mr Hill contended that SCL's argument under its third ground rested on a false proposition as to Ms Rima's "primary role". The Tier 2 sponsor system categorised senior care workers and care workers under different standard occupation classifications. Entering the wrong classification was a "significant error" under paragraph S3.36 of the Guidance. Failure to ensure that the role undertaken by a worker matched the classification gave rise to a mandatory ground of revocation under Annex C1(s). Even if there was an error of law in finding dishonesty, the SSHD had still been entitled to revoke, under the mandatory ground in Annex C1(s), because the role undertaken by Ms Rima did not match the job description in her CoS. These provisions are essential to preventing abuse of the system and exploitation of migrant workers. The fact that Ms Rima might have been eligible for sponsorship as a care worker was irrelevant.
- For those reasons, the SSHD had been entitled to conclude that Ms Rima was not acting as a Senior Care Worker, that her actual role did not match her standard occupation classification or job description, and to infer that the vacancy to which she had been recruited was not genuine in that the CoS contained an exaggerated or incorrect job description to deliberately make it appear to meet the requirements of the route to which it had been assigned by SCL.
SCL's Respondent's Notice - Discussion and Conclusion
- The judge held (at paragraph 30 of his judgment) that a proper construction of the decision letter was that the SSHD decided that Ms Rima's role did not represent a genuine vacancy, that it had been deliberately exaggerated and that this amounted to a finding of dishonesty. Neither party sought to challenge the judge's interpretation of the letter.
- Mr Manknell and Mr Hill are right to warn against imposing an overly legalistic procedure on those tasked with enforcing compliance with the Guidance. They are not lawyers. There are over 115,000 sponsors. There is a lot of work for the SSHD's staff to do. But the fact that the SSHD and her staff are entitled to maintain a high index of suspicion does not dilute the obligation to comply with well-established principles of procedural fairness in cases of suspected dishonesty.
- Adapting the principles in paragraphs 42-43 and 55 of Balajigari to the compliance investigation process, a discrepancy between the job description on a worker's CoS and the role she is actually performing may justifiably give rise to a suspicion that the sponsor has deliberately (i.e. dishonestly) exaggerated her role in order to facilitate her stay in this country, but it does not by itself justify a conclusion to that effect. It may call for an explanation and, if not satisfied by that explanation, it may be legitimate for the SSHD to infer dishonesty and revoke the licence on that basis. But an allegation of dishonesty in this context imposes four particular requirements on the investigators.
- First, as this Court stated in Balajigari, dishonesty "is a serious allegation carrying with it serious consequences". It is for the SSHD to establish, on a balance of probabilities, that the sponsor acted dishonestly. There is no burden on the sponsor to prove that it did not.
- Secondly, where the SSHD has a suspicion that a sponsor has acted dishonestly, she must indicate clearly to the sponsor that she has that suspicion so that the sponsor has a fair opportunity to respond.
- Thirdly, having received the sponsor's representations in response, the SSHD must consider all the circumstances before drawing the inference that the explanation for the discrepancy between the job description in the CoS and role actually being performed by the worker is that the sponsor has deliberately exaggerated her role in order to facilitate her stay in this country. If the SSHD has clearly indicated her suspicions in the suspension letter, the sponsor may put forward alternative explanations which the SSHD must consider with other relevant matters.
- Fourth, if the SSHD draws the inference of dishonesty, she must set out her reasons in the revocation letter. There is no need for the reasons to be lengthy or legalistic. But a sponsor whose licence is being revoked because the SSHD has concluded it has acted dishonestly is entitled to know the reasons for that decision, notwithstanding that the decision is taken on her behalf by relatively junior staff.
- In SCL's case, these requirements were not met. Although the suspension letter set out the SSHD's concern that Ms Rima's role was not a genuine vacancy and recited passages of the Guidance relating to revocation, including paragraph C1.46 and Annex C1(z), it failed to set out with any clarity that the SSHD suspected that SCL had deliberately exaggerated Ms Rima's role in order to facilitate her stay in this country. The first time the SSHD expressly told SCL that she believed the company had exaggerated the role to facilitate her stay here was in paragraph 21 of the revocation letter. I accept Mr Malik's submission that at no stage prior to the revocation decision did the SSHD expressly allege dishonesty or deliberate wrongdoing. Furthermore, there was nothing in the revocation letter to indicate the basis on which the SSHD drew the adverse inference that the reason for the discrepancy between the job description in Ms Rima's CoS and her actual duties as described in her interview was that her role had been deliberately exaggerated in order to facilitate her stay in this country. Given the seriousness of a finding of dishonesty, paragraph 21 of the revocation decision does not sufficiently explain why the fact that the role undertaken by a single worker did not match her job description led to the conclusion that the company had deliberately exaggerated her role in order to facilitate her stay in this country.
- In reaching that decision, there were other factors which the SSHD should have taken into account. By the date of the revocation letter, Ms Rima was the only worker under suspicion amongst the company's 162 staff. Although she was not performing the two tasks which distinguished a skilled care worker from a care worker, she was performing the majority of tasks under the CoS job description. Both categories of worker are covered by the sponsorship scheme. It is unclear whether the SSHD took those matters into account before reaching the conclusion that the company had acted dishonestly. Reading the revocation letter, the inference seems to have been drawn solely from the discrepancy. As this Court observed in Balajigari, such a discrepancy (in that case, between two statements about a worker's earnings) may give rise to a suspicion of dishonesty but does not by itself justify a conclusion to that effect. What it does is call for an explanation. But if the explanation is not called for with sufficient clarity, and as a result is not forthcoming, all that is left is the suspicion.
- For these reasons, I conclude that the process by which the SSHD decided that the mandatory ground for revocation in paragraph C1.46 and Annex c1(z) was established was flawed and unfair. It is correct that the SSHD also concluded that SCL was in breach of the further mandatory ground in paragraph C1.44 and annex C1(s). But the unfair procedure leading to the decision as to dishonesty vitiated the overall revocation decision. Although the SSHD raised s.31(2A) of the Senior Courts Act in its grounds of appeal, it was not suggested in argument before the judge that relief should be declined under that provision.
- I therefore conclude that, although the SSHD has succeeded in establishing that the judge was wrong to allow SCL's claim for judicial review to succeed on the ground that she had failed to carry out a global assessment of the impact of revocation, SCL has succeeded in demonstrating that the manner in which the SSHD reached her decision that the company deliberately exaggerated Ms Rima's role in order to facilitate her stay in this country was procedurally unfair. If my Lords agree, it follows that the judge's order quashing the revocation decision dated 23 June 2023 should be upheld on other grounds.
LORD JUSTICE JEREMY BAKER
- I agree.
LORD JUSTICE SINGH
- I also agree.
