Minster Care Management Ltd v The Secretary of State for the Home Department

The conditions governing Tier 2 sponsorship are conditions of participation. A sponsor cannot complain that it is required to comply with the applicable guidance. The Secretary of State must nevertheless apply that guidance correctly and act rationally. A policy directed to employment agencies cannot be applied to a care-home operator which manages a home and retains substantial control over its staff, rather than supplying labour to a third party. Where a decision is challenged for material legal errors, the court may decline to quash it only if the same decision would inevitably have been made. Mere probability is insufficient.

The claimant, a care-home operator, sought judicial review of the Secretary of State’s decision to revoke its Tier 2 sponsor licence. The decision relied on alleged failures concerning reporting, staffing arrangements, record keeping, the resident labour market test, key personnel and access to the sponsor management system. The Secretary of State conceded that one ground was made out. The central issues were whether the decision-maker had applied the sponsorship guidance lawfully, whether particular conclusions were irrational or unfair, and whether the decision should nevertheless stand because revocation would have occurred on other grounds.

1. Applicable principles. The principles governing Tier 4 sponsors also applied to Tier 2 sponsors. The rules in the Tier 2 and 5 Guidance were conditions of participation in the sponsorship scheme. A sponsor seeking the advantages of a licence could not complain that it was required to comply with them. The court applied the supervisory approach described in R (oao The London Reading College Limited) v Secretary of State for the Home Department [2010] EWHC 2561 (Admin) and R (oao New London College Limited) v Secretary of State for the Home Department [2013] UKSC 51.
2. The test for irrationality was whether the decision was so outrageous in defiance of logic or accepted moral standards that no sensible decision-maker could have reached it, as stated in Council of Civil Service Unions v Minister for the Civil Service [1985] AC 374.
3. Grounds concerning Ms Joshy’s promotion, Mr John’s registration evidence, absence records, the authorising officer and use of the level 1 user’s login details failed. The Secretary of State’s conclusions on those matters were rational, and the claimant had not supplied sufficient evidence or answers to the issues raised.
4. Ground 2 succeeded. Paragraph 5.6 and Annex 5(y) of the Guidance applied to an employment agency or employment business. The claimant was neither. It managed Vicarage Farm Nursing Home under a management contract and retained substantial control over the home. The Secretary of State therefore misapplied the policy and acted irrationally in treating the claimant as an employment agency supplying labour.
5. Ground 4 also succeeded by concession. The Secretary of State had erred in finding that the claimant had failed the resident labour market test and had knowingly provided false representations.
6. The court applied the mistake-of-fact principles stated in E v Secretary of State for the Home Department [2004] QB 1044, but found that the alleged connection between the companies was not an established, objectively verifiable and uncontested fact.
7. Although the Secretary of State argued that revocation would have occurred on any remaining ground, the court applied R (oao Smith) v North Eastern Derbyshire Primary Care Trust [2006] 1 WLR 3315. Probability was insufficient; the same decision had to have been inevitable. The errors concerned important matters and the decision to revoke had relied on the combination of alleged breaches, including the erroneous findings under Annex 5 and Annex 6(a). The decision was quashed.

This was a first-instance judicial review application heard as a rolled-up hearing. The judgment does not state any appeal from the decision.