Companies located in the UK with sponsor licences can use the Global Business Mobility or Skilled Worker immigration routes to sponsor foreign workers to come live and work in the UK. An employer is only allowed to have a sponsor licence if the Home Office is certain that it is fulfilling the numerous duties and responsibilities that come with having a sponsor licence or will fulfil them in the future.

Therefore, in order to be granted a sponsor licence, a company must demonstrate that it is able to comply with its sponsor duties and that it will in fact do so. This is especially crucial if the business has previously had a sponsor licence application refused, and even more so if it has previously held a licence but had it revoked. Under these circumstances, the Home Office will review any new applications very closely, and the business will also need to take other factors into account, such as the potential for a cooling-off period.

What happens if a licence is refused?

It is not uncommon for Sponsor Licence applications to be refused by the Home Office. There are a number of reasons why your application may be refused; a few of these include:

• Failing the Home Office’s Compliance Audit
• The organisation does not have the systems and policies in place to meet their sponsorship duties.
• The organisation fails to pass a ‘genuineness test’
• The organisation has failed to retain sufficient records of their overseas workers.
• The organisation has not responded to the Home Office on time.

Generally, a 6-month cooling-off period will apply if a Sponsor Licence application fails, so this implies that you will have to wait six months before reapplying.

What happens if a licence is revoked?

If the Home Office revokes your sponsor licence and imposes a cooling-off period, your company will not be able to reapply for a sponsor licence until the cooling-off period expires. Additionally, you will need to apply for a sponsor licence again rather than renewing your current licence because the Home Office withdrew your previous sponsor licence.

In cases where a business previously held a revoked sponsor licence, the business will typically be subject to a 12-month cooling-off period. In addition, a 12-month cooling-off period also applies when the company has been issued a civil penalty for employing an illegal worker or more than one civil penalty for letting residential premises to an adult without a right to rent. Before making a fresh application, the company must fully pay off any civil penalties.

An increased number of civil penalties and charges may result in a maximum 5-year cooling-off period. Factors that will determine the length of the cooling-off period include the number of penalties imposed.

What is the implication of the cooling-off period?

If a Sponsor licence application is refused?

If your first sponsor licence application or your renewal application is refused, the Home Office can impose a cooling-off period before you can apply again. The cooling-off period is normally six months.

If your application for a sponsorship licence is refused or in some cases, if the refusal is due to minor paperwork errors, they may be able to sort the problem out.

If your sponsor licence application problems are more serious in nature, then seek legal advice to address the issues and ensure that the next time you submit a sponsor licence application, the process is as smooth as possible.

Frequently, the refusal comes from incomplete paperwork or a failure to seek appropriate expert advice on selecting the most qualified key personnel. Alternatively, the Home Office's refusal of the sponsor licencing application might have been prevented by conducting a mock audit of HR policies.

Your plans for overseas recruitment will be delayed because you will need to go through the same application process and wait for a sponsor licence decision, even if the Home Office does not impose a six-month cooling-off period before your new Sponsorship Licence application can be made again.

If a sponsor licence is revoked?

The cooling-off period indicates that the business can't do any of the things they would normally do with a sponsor licence, namely recruit workers who need a sponsoring employer or continue to employ overseas workers who are sponsored with allocated certificates of sponsorship.

Depending on the recruitment plans and the degree to which they are currently reliant on overseas staff, the revocation of the sponsor licence could be a disastrous step or simply present extremely difficult and challenging circumstances, depending on their reliance on sponsored workers.

The impact of the cooling-off period on sponsored employees

When a sponsor's licence is revoked and a cooling-off period is imposed, a sponsored worker loses their job with their employer. Current sponsored employees may face cancellation of their sponsorship certificate under immigration rules.

The sponsored worker's visa is limited to 60 days (unless the visa has less time to run than 60 days and then the sponsored worker can stay in the UK for however long is left on their visa or unless the worker did something so serious that it was their act that led to sponsor licence revocation, in which case the Home Office may say that the worker will have to leave the UK more quickly).

If a sponsored worker can get another job with a new sponsoring employer with the right type of sponsor licence, then they can stay in the UK provided they can get allocated a certificate of sponsorship and can secure a new work visa.

Which measures can a business take to avoid a cooling-off period for its sponsor licence?

Here are some doable suggestions for your company to follow in order to prevent a sponsor licence cooling-off period:

• Only submit a sponsor licence application when you're ready. Applying for a sponsor licence as soon as possible is appealing because of the impact Brexit, the end of free movement, and the recruitment crisis are having on many sectors of the UK economy. This will allow your company to join the growing number of UK businesses that are sponsoring workers on skilled worker visas. You may best ensure that you can meet sponsor licence reporting and recording duties and that your sponsor licence isn't revoked by having an assessment of your present HR practices and office systems.
• Be cautious of putting too much pressure on key personnel to use the Home Office sponsor management system effectively. They are not, however, immigration lawyers, and they are typically balancing HR and administrative responsibilities while also keeping up with sponsor licence reporting and recording duties. Invest in sponsor licence training for key personnel from immigration lawyers, or have your sponsor licence handled by a competent sponsor licence management service provider.
• Get expert advice and assistance. If you are unsure whether you are fulfilling your reporting and recording duties under your sponsor licence completely, if you need to recheck an employee's eligibility to work under the EU Settlement Scheme, or if the certificate of sponsorship you wish to assign actually fits the standard occupation code, In this manner, you can prevent issues from arising, as failure to address concerns and ask questions may result in the revocation of your sponsor licence.

Make sure you qualify for the licence before submitting your application. You should also make sure that you have the correct systems and policies in place to ensure that you can uphold your sponsorship duties, which includes appointing sponsorship management roles within your organisation.

A sponsor licence revocation or refusal can be extremely devastating to a business in the short or long term, and it is usually necessary to submit a new application as soon as possible. However, it is critical to take all precautions to ensure that the new application has the best chance of success. 

For expert advice and assistance with a settlement application as a Representative of an Overseas Business, contact us on 020 3865 0219 or leave a message.