Points-based system: sponsorship
Andrew Osborne, Partner, Sports Group and Head of Business Immigration at Hammonds LLP, continues a series of articles on the new points-based system for employing foreign nationals with a look at the rules on sponsorship.
Introduction
Under the points-based system (PBS), which the Government began implementing on 29 February 2008, migrants coming to the UK from outside the European Economic Area or Switzerland to work, train or study will be required to show that they have enough points to qualify for entry clearance (see Points-based system: overview in this series for further details). However, before they can apply for entry clearance, migrants (other than highly skilled migrants under tier 1 of the PBS) will need a sponsor to issue them with a certificate of sponsorship. The sponsor will be a UK-based business or college that wishes to employ a particular migrant, or that has accepted a migrant onto a course. To become a sponsor an organisation must be licensed by the UK Border Agency. The Agency has issued Sponsorship under the points-based system - licensing guidance (PDF format, 716K) (on the UK Border Agency website) for employers and colleges applying to be licensed.
At present, sponsors applying for a licence for the tier 2 (general) sub-category (which includes intra-company transfers) only, can apply to join the register of sponsors. The UK Border Agency has produced guidance for such prospective sponsors (Tier 2 (general) and tier 2 (intra-company transfers) of the points-based system - guidance for sponsor application (PDF format, 260K) (on the UK Border Agency website)). From a date yet to be specified during the summer of 2008, sponsors will be able to apply for a licence to sponsor migrants under the other tier 2 sub-categories (sports people and ministers of religion), tier 4 (students) and tier 5 (temporary workers and youth mobility scheme migrants). Tier 3 (low-skilled workers filling temporary labour shortages) is currently suspended. Sponsors will have to register separately for each tier and sub-category under which they wish to sponsor migrants.
A register of sponsors on the UK Border Agency website provides details of licensed sponsors' names, locations, ratings (see below) and the tiers and sub-categories for which they are licensed.
Applying for a licence
Applications for a licence can be made electronically only and, once an application has been made, the applicant employer must send the UK Border Agency certified copies of the required documents and the correct fee within 10 working days. The documents to be provided depend on the type of organisation applying for a licence. The Agency has published lists by organisation type and these are set out in appendix A of the licensing guidance. The fees for tier 2 (general) are £300 for employers and colleges that satisfy two or more of the following conditions: turnover of not more than £5.6 million; balance sheet of not more than £2.8 million; and fewer than 50 employees. Fees are £1,000 for all other sponsors. When tier 2 (general) is implemented later this year there will also be a fee of £170 for each migrant issued with a certificate of sponsorship.
When applying for a licence, sponsors are also required to allocate four specific roles to members of their staff: "authorising officer", "key contact", "level 1 user" and "level 2 user". All the roles must be filled although a person can carry out more than one role. The staff concerned must be basedin the UK. The authorising officer, who must be a permanent member of staff and cannot be the sponsor's representative or a discharged bankrupt, is responsible for the sponsor-licensing application and ensuring that the sponsor complies with its sponsorship duties (see below). He or she is also responsible for the activities of anyone issuing certificates of sponsorship on the sponsor's behalf. The importance of this role cannot be underestimated as any non-compliance with the sponsorship duties could result in the sponsor losing its licence or being downgraded to a B-rating (see below). Level 1 and level 2 users (who can be a sponsor's representative) will carry out the day-to-day operation of the sponsor management system when it becomes available later in the year (see the sponsor management system page of the UK Border Agency website for more details). The key contact will act as the main point of liaison between the UK Border Agency and the sponsor.
Refusing an application/granting a B-rating
When considering a licence application, the Agency will seek to establish that the applicant employer or college is a genuine organisation operating legally in the UK, that it is trustworthy (ie that there is no history of dishonesty in relation to immigration offences or immigration crime), and that it is capable of carrying out its sponsorship duties (see below). In certain circumstances the licence application may be refused or the applicant may be awarded a B-rating. The circumstances justifying refusals or the granting of a B-rating are set out in the licensing guidance. Sponsors that are B-rated are likely to face more frequent visits by the Agency's inspection team.
A B-rated sponsor will be required to improve its performance to be upgraded to an A-rating. If it does not, it will risk having its licence withdrawn altogether. To assist the sponsor in making the improvements an action plan will be drawn up jointly by the Agency and sponsor. The plan will generally need to be achieved over a period of three months, depending on the circumstances, at the end of which the Agency will decide whether the sponsor should be upgraded, kept at a B-rating, have a new action plan drawn up or have its licence withdrawn.
Notification and appeals
Once the Agency has considered a prospective sponsor's application, it will tell the applicant whether it has been granted or refused a licence. If the licence has been granted, an A-rating or B-rating will be awarded. If the licence has been refused or the sponsor is given a B-rating, the reasons for the Agency's decision will be provided. There is no right of appeal against the refusal of a licence, but if a licence has been refused an applicant may reapply at any time. Sponsors with a number of different offices or locations can choose between seeking a licence as a single entity and having their branches seek separate licences.
Once licensed, a sponsor can apply for certificates of sponsorship. When it applies for a licence, the sponsor must give the Agency an indication of the number of certificates it expects to issue per year in each part of the PBS for which it has a licence. The Agency has the authority to review a sponsor's performance in relation to sponsors' duties (see below) after a certain number of certificates have been issued. These review points can be "hard" or "soft", can be changed at any time and can be set at any level. A "hard" review point means that the sponsor will not be able to issue any more certificates until the Agency is satisfied that the sponsors' duties are being followed. A "soft" review point means that the sponsor can continue to issue certificates while the Agency carries out its checks. Sponsors can also apply for an increase in the number of certificates that they can issue if there is a particular justification or need.
The certificate of sponsorship is a virtual document consisting of a unique reference number that the sponsor employer or college issues to the migrant, and that enables him or her to apply for entry clearance or leave to remain in the UK. The sponsor will need to complete migrant and sponsorship details on the application form, plus, where appropriate, details of how the job satisfies the resident labour market test, whether it is in a shortage occupation, or whether it is an intra-company transfer. (See Points-based system: overview in this series for further details.)
Sponsors' duties
All licensed sponsors are required to fulfil certain duties. Some of these duties are generic, ie they apply to all sponsors, whereas others are specific to sponsors that are licensed under certain parts of the PBS (see Tier-specific duties below).
Generic duties
Record keeping duties: All sponsors must keep certain records (ie a copy of each sponsored migrant's passport or UK immigration status documents) and make them available to the UK Border Agency, on request.
Reporting duties: Matters that sponsors must report to the Agency within 10 days include:
- a sponsored migrant not turning up for the first day of work at the expected time or being absent from work for more than 10 working days without the sponsor's permission;
- a migrant's contract of employment terminating for any reason; and
- details of any third party in the UK or abroad that has assisted in the recruitment of employees or students (which will presumably include details of any recruitment agencies used).
Complying with the law: Sponsors must ensure that migrants are legally entitled to do the job in question and have the appropriate occupational registration or professional accreditation where this is legally required.
Cooperating with the UK Border Agency: All sponsors must allow the Agency access to their premises on demand and B-rated sponsors must comply with action plans.
There are duties that are specific to sponsors, in relation to particular parts of the PBS. For example, for tier 2 (general) the sponsor must be satisfied that the migrant intends, and is able, to do a specific skilled job of at least skill level NVQ 3. It also must be able to indicate when applying for the certificate of sponsorship that one of a number of particular requirements has been met, for example that the job appears on the list of shortage occupations published by the Agency.
Enforcement regime
The UK Border Agency can make visits (both announced and unannounced) to sponsors' premises to check compliance and can set "hard" and "soft" review points at which it will review sponsor activity (see Certificates of sponsorship above). When visiting sponsors, the Agency will issue civil penalties if there is evidence that the sponsor has not complied with the rules on the prevention of illegal working (see Topic of the Week article Checking immigration status: an overview for more details). It will also consider criminal prosecutions where appropriate.
In certain circumstances the Agency may decide to withdraw a licence, downgrade it from an A-rated to a B-rated licence, or give a sponsor a warning. If a sponsor's licence is withdrawn, the leave of the migrants who were being sponsored will be cut to 60 days, or curtailed altogether, depending on whether the migrant concerned was complicit in any dishonest actions that led to the sponsor losing its licence. If there is evidence of complicity, leave will be curtailed and the migrant will need to leave the UK or face being removed. If there is no such evidence, leave will be reduced to 60 days to give the migrant a reasonable opportunity to find another sponsor. If the migrant cannot find a new sponsor in that time, he or she will have to leave the UK.
If the Agency is considering action against a sponsor that could lead to the withdrawal of its licence, it will suspend any current applications for entry clearance or leave to remain by migrants who were to be sponsored by that employer, until a decision has been made on the sponsor's status.
Suspension
If the Agency has reason to believe that a sponsor is guilty of a serious breach of an obligation that poses a threat to immigration control (for example the allocation of certificates of sponsorship to migrants who do not qualify to come into the UK), the sponsorship licence may be suspended pending the Agency downgrading or withdrawing it. During the suspension period the sponsor cannot apply for, or allocate any, certificates of sponsorship but it will still need to comply with all the duties of a sponsor in relation to existing sponsored migrants. The suspension will be lifted if the Agency decides not to withdraw the licence.
Renewing or surrendering licences
Sponsors' licences will last for four years unless they are withdrawn or surrendered. If a sponsor's licence expires and is not renewed, the organisation will lose the right to issue certificates of sponsorship and will not be able to continue acting as a sponsor for existing sponsored migrants. Sponsors need to apply to renew their licences before they expire. A sponsor will need to hold a licence for as long as it wishes to employ sponsored migrants even if it does not propose to sponsor any more migrants. Provided that a sponsor applies to renew before its existing licence has expired, it will be able to continue to act as a sponsor until the Agency makes a decision on its renewal application.
If a licence holder no longer wishes to sponsor migrants and no sponsored migrants are working for, or studying with, it, it may surrender its licence by writing to the Agency.
Takeovers and transfers of employment
If a business in which sponsored migrants work is transferred from one company or organisation to another under the Transfer of Undertakings (Protection of Employment) Regulations 2006, the new employer will need a sponsor's licence when it takes over. If the new employer does not already have a licence and does not apply for one within 28 days of taking over the business or organisation, the UK Border Agency may curtail the leave of the sponsored migrants.
If an already licensed sponsor takes over a business that employs sponsored migrants, the sponsor will need to inform the Agency that it has assumed responsibility for the migrants whose place of work it has taken over. If it does not, the migrants will not have a valid sponsor and their permission to be in the UK could be curtailed. Sponsors may also be required to undertake illegal working checks on transferred staff, although these provisions are currently under review.
Next week's article will be a case study on the points-based system and will be published on 21 July.
Andrew Osborne is Partner, Sports Group and Head of Business Immigration at Hammonds LLP (Andrew.Osborne@hammonds.com).
Further information on Hammonds LLP can be accessed at www.hammonds.com.
