Datamatics UK Ltd v Secretary of State for the Home Department

A sponsor-licence revocation decision is reviewable on ordinary public-law grounds. Whether a sponsored worker is an agency worker under sponsorship guidance is ordinarily a matter for the Secretary of State, not a precedent fact for the court, and the decision is lawful if rationally reached on the evidence.

The Services Directive does not regulate a scheme concerned only with employing non-EEA workers, rather than authorising the underlying service activity. In any event, a proportionate decision may satisfy the test. The duty to safeguard children’s welfare does not require express repetition in sponsorship guidance or every revocation decision where any impact is remote and no relevant evidence is provided.

The claimant, an IT services company holding Tier 2 and Tier 5 sponsor licences, sought judicial review of the Secretary of State’s decision to revoke its Tier 2 licence.

The revocation followed compliance visits and interviews indicating that sponsored workers were supplied to third parties as labour, that a vacancy was not genuine, and that reporting duties had not been met. The claimant argued that the decision was unreasonable, that proper inquiries had not been made, that the sponsorship scheme was an authorisation scheme under the Services Directive, and that the guidance breached section 55 of the Borders, Citizenship and Immigration Act 2009.

1. Claim dismissed. The classification of a sponsored worker as an agency worker, and of the sponsor as a recruitment agency, was not a precedent fact for the court. Unlike the statutory questions in R v SSHD ex p Khawaja 1984 AC 74 and R (A) v Croydon London Borough Council 2009 1 WLR 2557, the relevant test was contained in sponsorship guidance, involved no issue of liberty, and required evaluative judgment.
2. The appropriate review was on ordinary rationality principles, consistently with R (New London College) v Secretary of State for the Home Department 2012 EWCA Civ 51. The evidence, including the interviews and contracts, rationally supported the conclusion that workers were supplied as temporary labour rather than assigned to specific projects under the claimant’s control. The Secretary of State’s investigations were reasonable and proportionate, and there was no breach of the Secretary of State for Education v Tameside MBC 1977 AC 1014 duty.
3. The sponsorship scheme was not an authorisation scheme within regulation 4(1) of the Provision of Services Regulations 2009. It regulated the employment of non-EEA workers, not access to or exercise of the claimant’s IT service activity. The services of temporary work agencies were also excluded. Even if proportionality applied, the decision was proportionate. R (Hemming) v Westminster City Council 2015 2 WLR 1271 and Lumsdon v Legal Services Board 2015 3 WLR 121 did not alter that conclusion.
4. Section 55 of the Borders, Citizenship and Immigration Act 2009 is an overarching duty, but its impact will commonly be too remote at the licence-revocation stage to require express consideration. An unusual case involving a direct and immediate effect on a child could require consideration if the relevant information were provided. This was not such a case.