Raj and Knoll Ltd, R (on the application of) v The Secretary of State for the Home Department

A Tier 2 sponsor licence is conditional upon rigorous compliance with the sponsor guidance. A sponsor must retain and produce clear documentary evidence that it has completed the resident labour market test. It must also keep the electronic record of each sponsored worker’s actual work location accurate and up to date.

Failure to provide requested documents within the stipulated time engaged mandatory revocation under Annex 5(ac). A sponsor could not meet its obligations by requiring the Secretary of State to assemble disparate information from elsewhere in the department. Serious and repeated non-compliance, coupled with no exceptional circumstances, justified revocation.

The court did not determine the general standard of judicial review because the decision was sustainable under any recognisable standard of scrutiny.

The appellant operated care homes and held a Tier 2 sponsor licence. The Secretary of State revoked the licence after finding that the appellant had failed to retain and provide adequate resident labour market test records and had repeatedly recorded an address at which sponsored workers did not work.

The appellant sought judicial review, advancing construction, irrationality and discretion grounds. Haddon-Cave J dismissed the claim: [2015] EWHC 1329 (Admin). The appellant appealed with permission, principally to challenge the proposed standard of judicial review for sponsor-licence decisions.

The central issues were whether the documentary and reporting failures justified revocation, whether later material cured the defects, and whether the Secretary of State had to give express reasons for not imposing a lesser sanction.

1. Appeal dismissed. The appellant’s challenge failed by a wide margin. It had failed to maintain the required electronic equivalent of a paper trail for its use of the Tier 2 sponsorship system.

2. The Secretary of State’s request of 15 May 2014 fairly required the documents which the appellant had to retain to prove completion of the resident labour market test. The appellant did not provide the required online-advertisement evidence within the 20-day period. That engaged Annex 5(ac) of the Guidance, under which revocation was mandatory. Even assuming that later material could be considered, it did not establish compliant advertising by a recruitment agency on the appellant’s behalf.

3. The repeated use of 79 Hythe Road as the sponsored workers’ work address was a substantive, not merely formal, breach. The purpose of the requirement was to ensure that the Secretary of State could immediately identify where sponsored workers could be found. Information which might exist elsewhere in a large department was no substitute for correct and current sponsorship records. The court applied, mutatis mutandis, the reasoning in R (On the Application of WGGS Limited t/a Western Governors Graduate School) v SSHD [2013] EWCA Civ 177.

4. The Secretary of State was not required expressly to set out why a lesser sanction was rejected. The asserted effects of revocation were unsubstantiated. Further, Annex 6 revocation was generally to be expected absent exceptional circumstances, and none was relied on or shown.

5. The court did not decide whether a heightened standard of review applies to Tier 2 licence decisions. This was not a case of action based merely on suspicion or a “light trigger”, but of demonstrable and serious non-compliance. The court also cautioned that observations made about the distinct Tier 4 scheme in R (Westech College) v SSHD [2011] EWHC 1484 (Admin) included an essential qualification that the Secretary of State must comply with public-law duties.

• Court of Appeal (Civil Division): Dismissed the appeal and upheld the revocation decision: [2016] EWCA Civ 770.
• Administrative Court: Haddon-Cave J dismissed the judicial-review challenge to the revocation of the Tier 2 sponsor licence: [2015] EWHC 1329 (Admin).