Supermarket giant Tesco has recently been fined £115,000 for employing foreign students who were breaking the conditions of their visas. This follows shortly after the decision by the UK Border Agency (UKBA) to suspend the Tier 4 sponsor licence of the London Metropolitan University, due to the non-compliance with its sponsor licence duties.
These high profile cases along with other recently reported cases on the UKBA website clearly show that the UKBA will not hesitate to take action against employers or academic institutions, whether big or small, who fail to comply with their licence obligations.
What is a Sponsor License?
A Tier 2 sponsor licence (which Tesco were issued with) grants an employer the right to employ non-EU citizens for a skilled job in the UK. The licence, if approved, is granted for an initial period of four years, with the option to renew. All employers require it even if they only want to sponsor one skilled non-EU citizen.
Academic institutions can apply for a Tier 4 licence (as was the case with the London Metropolitan University) if they wish to teach international students. They are required to meet certain obligations in terms of monitoring and tracking international students.
What Obligations Fall on Tier 2 Licensed Sponsors?
Licensed Employers (sponsors) are required, as part of their licence obligations, to comply with specific duties which include:
- Preventing illegal working
Employers must ensure that the appropriate right to work checks are carried out on all new employees, regardless of their nationality, before they start work. An employer who negligently hires an illegal worker will commit a civil offence and be liable to a fine of up to £10,000 for each illegal worker. They may also be committing a criminal offence if they knowingly hire an individual who has no right to work in the UK. If convicted of the latter offence, this carries a custodial sentence of up to two years and/or an unlimited fine. The UKBA publishes the names of all employers who have been fined on their website.
In Tesco's case, they were fined because the UKBA discovered that they had allowed a certain number of foreign students to work for longer hours than their visas allowed, while the London Metropolitan University's systems were found to be inadequate.
Annual checks must be carried out on all migrant workers with limited leave to remain in the UK.
- Maintaining contact details
Employers are required to keep up-to-date personal contact details for all their sponsored workers. This includes details of their home address, next of kin along with contact telephone numbers. It's imperative that employers have a system in place to make sure that these changes are captured as and when they happen.
- Record keeping
Employers are also required to keep certain documents relating to the employment of Tier 2 employees for the duration of their sponsorship. This would generally include keeping copies of pay slips, contracts of employment and other documents as specified by the UKBA.
- Tracking and monitoring
Employers must also report certain information on sponsored employees on the UKBA's online Sponsorship Management System (SMS), in most cases within 10 working days, namely:
- Failure to attend on the first day of work;
- Unexplained absences of ten working days or more, or unpaid leave of one month or more;
- If employment ends either through termination or resignation or an employee otherwise stops being sponsored;
- If there are significant changes in an employee's circumstances, such as a change of job or salary (this does not include normal annual salary increases);
- If the employer suspects a migrant is breaching the conditions of their leave; and/or
- If there are any significant changes in the sponsor's circumstances (for example, it has changed address or was involved in a merger).
- Recruitment practices and professional accreditations
Employers must also ensure that a migrant who is coming to work is legally entitled to do the job in question and that he/she has the appropriate registration or professional accreditation where this is legally required.
For example, if the migrant is coming to work as a doctor, the sponsor will need to ensure that he or she has the correct registration to entitle him or her to practice as such in the UK. Where a vacancy was advertised, the employer will also need to keep copies of the advert along with full details of the resident labour market search.
What Are the Risks and Penalties?
The UKBA has the right to visit the premises of any employer who holds a sponsor licence at any time. Where the employer has no proper systems in place to manage the above obligations, then the licence will be revoked and all sponsored migrants currently in their employ will have their leave curtailed to 60 days, thus exposing the employer to potential unfair dismissal claims.
Where the UKBA hold the view that the breach is not so severe, they may decide to issue an action plan for a fixed period of three months at a cost of £1,500. During this time, it will not be possible to sponsor any new migrants. At the end of the period, the UKBA will visit the employer to decide whether their licence should be re-instated or revoked.
It is clear from the recent cases that the consequences for non-compliance can be quite severe. Prevention is certainly better than cure.
First published in HR Magazine on 14 November 2012.