Southcroft Healthcare Lodge Limited, R (on the application of) v The Secretary of State for the Home Department

A sponsor licence is a privilege, not a right, and the sponsor must comply strictly with the applicable sponsorship guidance. The Secretary of State may act on reasonable grounds for suspecting a breach and is entitled to maintain a high index of suspicion. A single breach of a mandatory revocation provision may independently justify revocation. The court’s role is supervisory. It must assess the legality and rationality of the decision while respecting the Secretary of State’s expertise. The Secretary of State need not identify the correct occupation code for a sponsor, conduct a global proportionality assessment, or wait a full year before checking whether sponsored workers receive the required annual salary. Adequate reasons may be concise where the decision-maker’s concerns and the relevant evidence are clear from the surrounding correspondence.

The claimant, a care provider holding a sponsor licence, challenged the Secretary of State’s decision of 9 February 2024 revoking that licence. The decision followed compliance visits and suspension of the licence. The Secretary of State relied on five matters: incorrect occupation codes for 97 sponsored workers, underpayment, sharing of an SMS password, inadequate monitoring of visa expiry dates, and failure to provide requested documents.

The claimant alleged errors of law, inadequate reasons, irrationality, procedural unfairness, and failure to consider downgrading as an alternative. Permission had previously been granted on seven grounds, although some arguments were abandoned or found to fall outside the pleaded grounds. The central issues were whether the revocation decision was lawful and whether any individual breach independently justified revocation.

1. The claim was dismissed. The job description, salary and documents breaches each independently justified revocation under the Guidance.
2. Public law proceedings require procedural rigour. A claimant may not develop a materially different ground in submissions where permission has not been granted. The occupation-code argument was pleaded only as part of the genuine-vacancy case and could not be pursued as a freestanding challenge.
3. SOC code 6145 covered occupations involving the provision of care to a significant degree. The claimant’s workers provided support but no significant personal care and were therefore outside the code. The Secretary of State gave adequate and rational reasons for finding that the code had been wrongly assigned. Responsibility for assigning the correct code lay with the sponsor.
4. The Secretary of State was entitled to assess pay over a meaningful period shorter than twelve months where workers had not been employed for a full year. The reasoning in Treal Care (UK) Limited v Secretary of State for the Home Department was accepted, although the relevant observations were obiter. The three-month analysis was lawful on the evidence.
5. The evidence reasonably supported the conclusion that an SMS password had been shared with an unauthorised person. The Secretary of State was entitled to prefer the interview evidence and apply a high index of suspicion.
6. The claimant’s own admissions established that its monitoring arrangements were inadequate. There was no meaningful distinction, for these purposes, between a system and a process or procedure. The later acquisition of Cezzane could be treated as mitigation, but the Secretary of State was entitled to assess the arrangements existing at the time of the compliance visits.
7. The document request under the Guidance was lawful and required compliance. Satisfactory explanations existed for two workers, but no documents were supplied for two others. That failure breached the relevant provisions, notwithstanding the omission of detailed reasons in the decision letter.
8. The Secretary of State was not required to conduct a global assessment of the impact of revocation on the claimant, its workers, service-users or the wider care sector. Having lawfully concluded that downgrading was inappropriate, she was entitled to revoke the licence. Materiality under section 31(2A) of the Senior Courts Act 1981 did not arise.