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John Gibson

Hill Dickinson

Barrister And Notary Public

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Legal Insight: Have you renewed your foreign worker sponsorship licence?


A major retailer was fined £115,000 earlier this month for employing foreign students who were breaking the conditions of their visas.

At the present time, it is unclear whether the supermarket chain’s sponsorship licence is likely to be revoked or suspended too, however.
You may also remember the press coverage at the end of August concerning London Metropolitan University. Questions were raised as to whether it would be able to continue as a higher education establishment following the withdrawal of its sponsorship licence.
Without the licence, the University could not allocate entry visas to staff and students outside of the European Union, but not having access to fees from foreign students was a critical loss. Newspaper reports questioned whether it could continue to function without them.
At the moment, meanwhile, the UK Border Agency is also conducting a crack-down on illegal working in the north-west of England, with arrests of illegal workers having been made at several Merseyside premises.
So with the issue being so high profile at the moment, it is worth asking yourself, would your organisation be harmed if its sponsorship licence was allowed to expire and would it be in breach of immigration laws as a consequence?
What is a sponsorship licence?
The sponsorship licence system is an employer-led system, administered by the UKBA. It requires employers to hold a sponsorship licence before they can employ foreign nationals from outside the European Economic Area and Switzerland.
Under the current “points-based system” for immigration, the UKBA decides who can be admitted to, or is allowed to stay, in the UK. In order to assess this situation, many migrants need to provide evidence of a UK sponsor who possesses a sponsorship licence.
A company or public body with a sponsorship licence will issue a certificate of sponsorship directly to the migrant, allowing him or her to apply for entry into the UK as a worker.
A sponsorship licence usually runs for a period of four years, starting from the day that it is issued by the UKBA, or the day that applications start for the relevant tier of the points-based system – whichever is the later. Employers must renew their licence prior to the expiry date in order to continue acting as a sponsor.
A significant amount of current Tier 2 sponsor licences will expire on the day before the four-year anniversary of their inception, on Tuesday, 27 November 2012. Employers with a licence that is about to expire can expect to receive email notifications of that impending expiry from the UKBA. 
Although notifications are issued 120 days before expiration, there may be some employers who are missed out. The UKBA has recently had some difficulties with processing letters.
For instance, there are said to be 100,000 unread letters from immigration applicants in the UKBA Liverpool office alone, as a press report in The Times from 23 November 2012 pointed out.
Although reminder notices should be issued by the UKBA, the responsibility to renew the licenses themselves still lies with the organisation that has them.
Why should I go to the trouble of renewing the licence?
The importance of the sponsorship licence to a UK company can best be illustrated by a hypothetical example, based on some of the cases that we have recently advised upon.
Company “X” is a multi-national corporation, which has a base in the UK. It was successfully given a licence to sponsor workers coming into the country who had specialist skills that no one in the UK could provide.
The skills that these workers possessed were gained after many years of specialist training, which was only available in certain African countries. They were the lead specialists that enabled the five UK branches of the company to operate.
Due to three incidents of the organisation employing an illegal worker, however, the UKBA indicated that it would not renew the sponsorship licence when it expired in November 2012.  
Without the licence, the company could not employ its specialist workers, its competitors quickly heard about the situation and attempted to recruit them instead. The revocation of the licence and the loss of its key workers led Company X to initiate the winding up of its UK operation.
Although this is an extreme example, the potential havoc caused by the removal of a sponsorship licence cannot be underestimated.
How do I renew my sponsorship licence?
Renewing a licence is, as of earlier this year, undertaken via the online Sponsorship Management System, which is hosted on the UKBA website. But employers should apply at least a month before their licence expiry date so that they can continue acting as a sponsor. 
The process is straightforward:
  • On receipt of an application, UKBA will first validate it by checking that the correct fee has been paid. Once this is done (normally within 14 days, although it can take longer), the employer will be notified of the outcome in writing
  • UKBA will then temporarily extend the licence and undertake a review of the licence details as well as the employer’s sponsorship activity over the previous four years
  • At this stage, employers may be asked to supply supporting evidence of their activities
  • Once the review is complete, employers will be notified by email or post of the outcome of the review and any action that has been taken or is intended to be taken as a result.
But bear in mind that:
  • Failing to renew your licence within the required time will mean that you cannot continue as a sponsor, and UKBA will curtail any remaining leave granted to a migrant worker that you have already sponsored
  • Change notifications should be submitted within the prescribed time limits (which vary depending on the type of notification being submitted), and the processing of your notification should be tracked via the SMS
  • If a notification is rejected, and an email confirming the reason for the rejection is received, employers should ensure that the notification is re-submitted immediately (and the reason for the rejection is correctly addressed)
  • Failure to notify the UKBA of changes to the sponsor licence within the prescribed time limits is a breach of the sponsorship duties and the terms of the sponsorship licence. Any breaches of sponsorship duties can cause the licence to be withdrawn or suspended
  • It is best to avoid missing the time limit as it could cause disruption to your overseas recruitment programme.

John Gibson is barrister and notary public for the business immigration team at law firm, Hill Dickinson.

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John Gibson

Barrister And Notary Public

Read more from John Gibson

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