R. (on the application of Raj and Knoll Ltd) v Secretary of State for the Home Department(Court of Appeal)

This case confirmed that the Home Office was entitled to revoke a Tier 2 sponsor licence where an employer had not complied with its record-keeping and reporting obligations, failed to adequately address the residence labour market test while recruiting and did not provide requested documents within a specified timeframe.

Although revocation meant that the employer, who operated three care homes, could no longer employ skilled non-EEA migrant workers and may experience negative commercial consequences as a result, the CA held that this was not a disproportionately onerous sanction. The court stressed the importance of maintaining and updating records in strict compliance with the relevant guidance, using "paper trails (or the electronic equivalent)", and producing documentary evidence on request.

The Court's suggestion that compliance with the sponsorship regime was "not difficult" represents a judicial endorsement of the Home Office's broad scope to revoke licenses even if an infraction is minor. Sponsors will therefore need to clearly understand their duties and exercise constant diligence to ensure continued compliance.