Manzay Ltd (t/a Mirch Masala Restauant), R (on the application of) v Secretary of State for the Home Department

A Tier 2 sponsor licence is a conditional privilege, not a fundamental right. The Secretary of State may revoke it where mandatory grounds are established and, save in exceptional circumstances, where a discretionary ground is made out. The court’s role is supervisory, particularly because the Secretary of State has relevant expertise and the scheme depends on trust in sponsors.

Revocation may be justified by multiple breaches viewed cumulatively. A decision is not necessarily unlawful because it includes one erroneous reason if the remaining grounds independently justify the outcome and the error has been reconsidered. Sponsors must retain and promptly produce evidence of compliance with the Resident Labour Market Test, declare relevant benefits in kind as part of salary packages, and keep required reporting records.

The claimant, an Indian restaurant and former A-rated Tier 2 sponsor, challenged the Secretary of State’s decision to revoke its sponsor licence with immediate effect. The challenge alleged procedural irregularity, reliance on irrelevant or inaccurate information, failure to consider relevant material, and irrationality.

The revocation followed a compliance visit during which officials identified alleged discrepancies between sponsored workers’ duties and their Certificates of Sponsorship, failures to retain recruitment records, inaccurate salary information, and failures to report changes affecting sponsored workers. The Secretary of State maintained the decision on review, although she withdrew reliance on one alleged job-title discrepancy. The central issue was whether the decision remained lawful in light of the asserted errors and the other breaches found.

1. Outcome. The claim for judicial review and damages was dismissed. The revocation decision was lawful and was not quashed.
2. Nature of the licence. The grant of a Tier 2 sponsor licence imposes serious but not onerous duties. It confers rights conditional on compliance with the scheme and engages no fundamental right. The consequences of revocation do not prevent a business from continuing or employing persons who otherwise have a right to work.
3. Applicable approach. The court exercises a supervisory jurisdiction and must consider the decision as a whole. The Secretary of State is entitled to rely on her expertise in monitoring sponsorship. Mandatory revocation follows when a mandatory ground is established. Where a discretionary ground is made out, revocation is expected unless exceptional circumstances are shown.
4. Errors and cumulative grounds. The accepted error concerning one worker’s job title did not invalidate the decision. It was considered on review, and the remaining breaches independently justified revocation. The Secretary of State was entitled to rely on signed interview records and other material. Resolving factual conflicts was primarily for the decision-maker, not the reviewing court.
5. Resident Labour Market Test. The claimant had to retain interview notes and reasons for rejecting EEA candidates. The duty was clear and not burdensome. The Secretary of State was not required to identify every document that had to be produced, particularly where the claimant understood that evidence of the test and the genuineness of the vacancy was required.
6. Salary package and reporting duties. Rent-free accommodation was a benefit in kind and therefore an allowance forming part of the salary package which had to be declared. Failures to record late starts, absences, or changes to immigration routes remained breaches even if the Home Office had, or should have had, related information.
7. The Secretary of State was entitled to conclude that trust in the sponsor had broken down. The number and nature of the breaches provided ample material for the decision.