Minster Care Management Ltd v The Secretary of State for the Home Department [2015] EWHC 1593 (Admin)

Case No CO/6100/2014

[2015] EWHC 1593 (Admin)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

ADMINISTRATIVE COURT

Venue Royal Courts of Justice, Strand, London, WC2A 2LL

Date 05/06/2015

Before

NEIL CAMERON QC

(Sitting as a Deputy High Court Judge)

Between

MINSTER CARE MANAGEMENT LIMITEDClaimant

THE SECRETARY OF STATE FOR THE HOME DEPARTMENTDefendant

Mr Michael Biggs (instructed by Fernandes Vaz) for Claimant

Ms Cathryn McGahey (instructed by The Government Legal Department) for Defendant

Hearing Hearing date: 21 st April 2015

Judgment

The Deputy Judge (Neil Cameron QC):

Introduction

[1]This is an application for judicial review to quash a decision made by the Secretary of State for the Home Department, communicated by letter dated 25th November 2014 (“the Decision Letter”) to revoke a Tier 2 sponsor licence held by Minster Care Management Limited.

[2]The application came before the Court as a ‘rolled up’ hearing pursuant to an order made by Green J. At the hearing I gave directions allowing the parties to make further written submissions on one issue, namely the approach to be taken by the Court when considering the appropriate remedy. I made that ruling in the light of the fact that the Defendant had conceded that ground 4 of the claim was made out. The Claimant made written submissions, to which the Defendant replied. The Claimant made no response to the Defendant’s reply. I understand from the observations made on the draft of this judgment that that the Claimant made no response as the Defendant’s reply was not served on it. I am satisfied that the Claimant has suffered no prejudice as a result of being denied the opportunity to respond.

[3]The Claimant did not confine its submission to the one issue on which I gave permission for further submissions to be made. In its written submissions the Claimant made further submissions on grounds 2 and 3 of its claim.

Background

[4]The Secretary of State operates a points based system under the Immigration Rules. Under the points based system migrants intending to enter the UK are required to achieve a specified minimum number of points broadly reflecting the migrant’s qualifications for admission in the relevant category or Tier. The Tier 2 ‘route’ enables UK employers to recruit workers from outside the EEA to fill a particular vacancy that cannot be filled by a British or EEA worker.

[5]A company or other organisation is permitted to apply to the Secretary of State for a sponsor licence. Under the scheme a migrant must have a sponsor before he or she can apply to come to, or remain in, the UK for work. Prospective sponsors can apply for a licence to employ migrants under a number of different categories, including Tier 2 for skilled sponsored workers.

[6]The Secretary of State has issued guidance for sponsors. The guidance under consideration in this case is the Tier 2 and 5 of the Points Based System Guidance for Sponsors version 11/14 (“the Tier 2 and 5 Guidance”). The Tier 2 and 5 Guidance does not form part of the Immigration Rules, but is issued under the Secretary of State’s ancillary and administrative powers which are not spelt out in the Immigration Act 1971 (R (oao New London College Limited) v. Secretary of State for the Home Department

[2013] UKSC 51

at paragraphs 28-29).

[7]The introduction to the Tier 2 and 5 Guidance explains the concept of sponsorship :

“1.1 Sponsorship is based on two principles: a) Those who benefit most directly from migration (employers, education providers or other bodies who are bringing in migrants) should play their part in ensuring the system is not abused. b) We need to make sure that those applying to come to the UK for work or to study are eligible and that a reputable employer or education provider genuinely wishes to take them on. 1.2 A migrant must have a sponsor before they can apply to come to, or remain in the UK for work or study. The same applies where a Croatian national who is already in the UK needs to apply for worker authorisation in the form of a Purple Registration Certificate. The sponsor will be an organisation in the UK that wishes to employ, or provide education to a migrant. More information on Croatian nationals applying for worker authorisation is available on our pages on the GOV.UK website at: www.gov.uk/croatian-national. 1.3 Sponsorship plays two main roles in a migrant’s application for permission to come to, or remain in the UK to work or study: a) It provides evidence that the migrant will fill a genuine vacancy that can’t be filled with a suitably qualified or skilled settled worker, or that they will be studying for an approved qualification. b) It involves a pledge from the sponsor that it accepts all of the duties expected when sponsoring the migrant.”

[8]Under the Tier 2 arrangements a person granted a licence as a sponsor is able to assign certificates of sponsorship (“CoS”) to migrants who wish to work for them (paragraph 2.6 of the Tier 2 and 5 Guidance). Such assignment of CoS is carried out using the online Sponsor Management System (“SMS”).

[9]The Tier 2 and 5 Guidance emphasises the duties imposed upon sponsors and that sponsors will be monitored:

“2.7 As a licensed sponsor you must meet certain duties such as informing us if migrants do not turn up for work or are absent without permission for a significant period. You must keep records on the migrants you sponsor, including up-to-date contact details and a copy of their biometric residence permit (BRP). You must also give any documents to us on request. For more information on biometric residence permits, please see after admission to the UK – the biometric residence permit. 2.8 We will monitor your ability and willingness to always comply with your duties. We will: a) set a limit on the number of CoS you can assign; b) visit you, to check you are complying with your duties; c) refer cases for civil penalty action, or possible prosecution if we find evidence that you may have employed migrants illegally. For more information on sponsor duties, please see sponsor duties.”

For more information on sponsor duties, please see sponsor duties.”

[10]The Tier 2 and 5 Guidance states that a failure to comply with sponsor duties may lead to suspension or revocation of the licence (paragraph 2.12).

[11]Annex 5 of the Tier 2 and 5 Guidance sets out the circumstances in which a licence will be revoked and Annex 6 sets out circumstances in which a licence may be revoked.

[12]A similar system applies in the case of education colleges who can apply to be entered on the Register of Tier 4 Sponsors. A Tier 4 sponsor can issue a ‘Confirmation of Acceptance for Studies’, which can in turn be relied upon by a migrant seeking entry under the points based system. In R (oao The London Reading College Limited) v. Secretary of State for the Home Department

[2010] EWHC 2561 (Admin)

Neil Garnham QC sitting as a Deputy High Court Judge considered an application for judicial review to quash the Secretary of State’s decision to remove the applicant college from the sponsor register. At paragraph 60 of the judgment he stated:

“It has to be remembered that the primary judgment about the response to breaches of a College's duty is the Defendant's, and the Court's role is simply supervisory. It has also to be remembered that the underlying principle behind this scheme is that the UKBA entrusts to Colleges the power to grant visa letters on the understanding, and with their agreement, that they will act in a manner that maintains proper immigration control. The capacity for damage to the national interest in the maintenance of proper immigration control is substantial if Colleges are not assiduous in meeting their responsibilities. In those circumstances, it seems to me that the Defendants are entitled to maintain a fairly high index of suspicion as they go about overseeing colleges and a light trigger in deciding when and with what level of firmness they should act.”

[13]The principle which underlies the Tier 2 scheme, which is similar to the Tier 4 scheme, is that the Defendant entrusts to sponsors the power to grant CoS on the understanding, and with their agreement, that they will act in a manner which maintains proper immigration control. The potential for damage to the maintenance of proper immigration control is substantial if sponsors are not assiduous in fulfilling their responsibilities.

The Facts

[14]The Claimant is a business which owns and runs care homes and forms part of the wider Minster Care Group. The Minster Care Group is a group of companies which are linked by the fact that their shares are held by the Patel family trusts. There are two main companies in the group, the Claimant, whose primary function is to run care homes for the elderly, and Pathways Care Group Limited, whose primary function is to run care homes for people with learning disabilities. Pathways Care Group Limited was, until 4th August 2010, known as Minster Pathways Limited. Both the Claimant and Pathways Care Group Limited have a number of subsidiary companies. The link between the Claimant and Pathways Care Group Limited is that the two companies are both owned by the Patel family trusts and that Mr Surendra Patel and/or Mr Manesh Patel are directors of the companies and their subsidiaries. The Patel family trusts also own two other companies, Daimler Green Care Home Ltd and Minster Haverhill Limited.

[15]The Minster Care Group runs approximately 80 care homes in England and Wales and employs approximately 2,500 staff.

[16]The Claimant applied for Tier 2 sponsor licence in December 2008 and it was subsequently entered on the register of Tier 2 sponsors.

[17]The Minster Care Group employs 29 Tier 2 migrant workers at 11 care homes operated by the group.

[18]The reason that Minster Care Group employs migrant workers is that there is an acute shortage of skilled staff, particularly nurses, and it is said that it is extremely difficult to source staff from the resident labour market as there are insufficient skilled staff, and that those who are so skilled prefer to work in the National Health Service.

[19]The Claimant appointed Vostek Ltd to act as level 1 user under the Tier 2 sponsorship system. A level 1 user is one of the ‘key personnel’ referred to in section 6 of the Tier 2 and 5 Guidance. A level 1 user has access to the sponsor management system. Vostek Limited advise the Minster Care Group on the requirements of the Resident Labour Market Test, have placed advertisements on their behalf, have assisted them to make applications for Restricted Certificates and Unrestricted Certificates, and assign CoS on their behalf.

[20]On the 14th August 2014 an officer employed by the Defendant in the Sponsor Compliance Team of the UK Visa and Immigration service carried out an unannounced visit to the Claimant’s offices. Mr Surendra Patel, a director of the Claimant, was present. Mr Patel states in his witness statement that the visiting officers did not ask whether he would wish the interview to be postponed, and that he (Mr Patel) did not request that it should be postponed. The notes prepared by the visiting officers record that the visit commenced at 11.10 am and ended at 5.30 pm.

[21]Following the visit, in a letter dated 13th October 2014, the Defendant’s officer wrote to the Claimant informing it that the sponsor management licence was suspended. In that letter the Defendant identified the issues which led to the suspension. Those issues were: i) Failure to comply with reporting duties: a) When assigning CoS it was stated that the workers concerned would work at the Claimant’s registered head office; the sponsored workers are based at various care homes. It was alleged that there was a failure to comply with paragraph 15.7 of the Tier 2 and 5 Guidance. b) A failure to report that Ms Lovely Joshy had been promoted to deputy manager. It was alleged that there was a failure to comply with the paragraph 15.6 and 15.7(d) of the Tier 2 and 5 Guidance. c) Reliance was placed upon Annex 6(j) of the Tier 2 and 5 Guidance being a circumstance which may give rise to revocation of sponsor licence. ii) Supplying staff to care homes not within the Minster Care Group a) Mr Patel had informed the visiting officer that one of the sponsored workers was working at Greenways care home. Greenways Care Home is not listed as forming part of the Minster Care Group on its website or under its registration with the Care Quality Commission. b) 2 sponsored workers were working at Vicarage Farm Nursing Home, with their salaries being paid by Astoria Healthcare. c) It was stated, at paragraph 13 of the letter: “From the information mentioned above, we are therefore not satisfied that you are employing staff that are solely working within your care homes and that you are supplying staff to nursing homes that you do not own. This would indicate that you are an employment agency.” d) It was alleged that there was breach of a paragraph 5.6 of the Tier 2 and 5 Guidance and that the circumstances fell within paragraph (x) (paragraph (y) in the November 2014 version) of the Annex 5, being a circumstance in which a licence will be revoked. iii) Inadequate record keeping a) Failure to report that certain specified members of staff had had applications for registration by the Nursing and Midwifery Council rejected in alleged breach of paragraph 15.12(a) of the Tier 2 and 5 Guidance. b) Inability to demonstrate that absences of sponsored workers were recorded, in alleged breach of Appendix D of the Tier 2 and 5 Guidance, being a circumstance falling within Annex 6(j), being a circumstance in which a licence may be revoked. iv) Operating from premises without the requisite planning permission a) This contention was that at the time of the August 2014 visit the Claimant’s director had told the investigating officer that the office premises had the benefit of a planning permission for use falling with class B2 set out in the Town and Country Planning (Use Classes) Order 1987 (as amended), being ‘Use for the carrying on of an industrial process other than one falling with class B1 above’ when the Claimant’s premises at The Old Stables, 1, Grove Hill Road, Harrow were in fact in class B1(a) office use. b) It was alleged that the circumstances fell within paragraph 5(v) (5(w) in the November 2014 version) of Annex 5 of the Tier 2 and 5 Guidance, being circumstances in which a licence will be revoked. v) Failure to demonstrate that a resident labour market test was carried out when recruiting staff a) It was stated that the officer was not satisfied that the Claimant had conducted an appropriate resident labour market test as required under paragraph 28.1 of the Tier 2 and 5 Guidance. b) It was alleged that the circumstances fell within paragraph 6(j) of Annex 6 of the Tier 2 and 5 Guidance, being circumstances in which a licence may be revoked. vi) Failure to provide a full list of the names of the sponsored workers in alleged breach of paragraph 15.1 of the Tier 2 and 5 Guidance, being circumstances falling within paragraph 6(d) of Annex 6 being circumstances in which a licence may be revoked. vii) The authorising officer, Mr Farebrother, was not employed by the Claimant but by Pathways Care Group Limited, and was therefore not a paid member of staff of the sponsor, in alleged breach of paragraph 6.3(c) of the Tier 2 and 5 Guidance and the circumstances fell within 6(p) of Annex 6, being circumstances in which a licence may be revoked. viii) The authorising officer was not a level 1 or level 2 user and had access to the sponsor management system a) It was alleged that the authorising officer, Mr Farebrother, had access to the level 1 user’s log in details, in breach of 6.8 of the Tier 2 and 5 Guidance. b) It was alleged that the circumstances fell within paragraphs 6(m) and (g) of Annex 6 to the Tier 2 and 5 Guidance, being circumstances in which a licence may be revoked.

[22]In the letter of 13th October 2014 the Defendant’s officials stated that the Claimant would be allowed twenty working days in which to make representations and also stated:

“If you fail to make representations, or to adequately address this issue, within this time, your licence will be revoked and you will no longer be able to sponsor workers.”

[23]In a letter dated 7th November 2014 the Claimant’s solicitors responded to the Defendant’s letter of 13th October 2014. The response was as follows: i) An explanation was given as to the background of the Minster Care Group. The Minster Care Group was said to have a “long and complex structure” including 14 companies and 75 care homes. A diagram showing the relationship between the companies was attached to the letter together with a certificate showing the change of name from Minster Pathways Limited to Pathways Care Group Limited on 4th August 2010. ii) The Claimant’s registered office was given as the main work address when CoS were assigned as it was understood by the Claimant that it was the ‘working for’ as opposed to ‘working at’ address which should be given. iii) Consideration had been given to promoting Lovely Joshy to deputy manager, but although her salary was increased she was not promoted. iv) Greenways care home is owned by Pathways Care Group Limited part of the Minster Care Group. v) Minster Care Management Limited manages Vicarage Farm Nursing Home under a management contract with Astoria Healthcare Ltd. A copy of the management contract was provided. The Claimant was not operating an employment agency. The solicitors accepted, on behalf of the Claimant, that there had been a ‘lapse in their processes’ and that immediate steps would be taken to stop the sponsorship of migrant staff at Vicarage Farm. vi) Record keeping: a response was provided to the allegations relating to the members of staff awaiting responses from the Nursing and Midwifery Council. It was said that all members of staff have valid visas. No response was provided to the allegation that there were inadequate or no records of staff absences. vii) A copy of the decision notice dated 19th November 2007 granting planning permission to use the Claimant’s premises at The Old Stables, 1, Grove Hill, Harrow as offices, was provided. viii) It was contended that, as a visit had taken place on 23rd October 2013, when copies of advertisements and files of sponsored staff had been examined, there was no requirement to keep records of advertisements for the sponsored staff, as the records had been checked; reliance was placed on paragraph 15.1 and Appendix D of the Tier 2 and 5 Guidance. Copies of advertisements placed after the October 2013 visit were provided. A list of staff was provided. ix) It was said that the authorising officer is employed by a company within the Minster Care Group and is paid by Pathways Care Group Limited. x) It was said that the person who was interviewed on 14th August 2014 was a director of the Claimant but had never seen or operated the sponsor management system. xi) It was said that the business is reliant on a significant number of migrant staff and revocation of the sponsor licence would “result in the home being unable to function. Given the complex needs of the residents it would have a significant impact on the residents.” It was also contended that lesser sanctions should be imposed.

[24]The Defendant’s response to the Claimant’s solicitors’ letter is dated 25th November 2014. This is the letter which contains the decision under challenge, being the decision to revoke the sponsor licence, and I will refer to it as the Decision Letter.

[25]In the Decision Letter the Defendant: i) Accepted that the Claimant had taken appropriate action to record the working addresses of each sponsored worker (paragraph 14 of the Decision Letter). ii) Stated that she was not satisfied that the issue in relation to Ms Joshy had been resolved. At the August 2014 visit Mr Patel had indicated that Ms Joshy had been promoted to deputy manager, and the Claimant had not provided evidence to show that Ms Joshy’s role had not changed. Placed reliance upon paragraph 15.7(d) of the Tier 2 and 5 Guidance and on Annex 6(j) (paragraphs 17-19) iii) Stated that the Claimant had failed to provide credible evidence that there is a link between Minster Care Group and Pathways Care Group or that they are part of the same company (paragraph 22), and that the issue has not been addressed (paragraph 23). iv) Stated that the records show that on 16th December 2013 the Claimant assigned CoS for two workers to work as health service managers at Vicarage Farm Nursing Home (paragraph 24). The conclusion reached was: “From the information mentioned above, we are not satisfied that your client is employing sponsored workers that are solely working within their care homes and that they are supplying staff to nursing homes that they do not own. This would indicate that your clients are acting as an employment agency.” (paragraph 30). Reliance was placed on paragraph 5.6 and Annex 5(x) (5(y) in the November 2014 version) of the Tier 2 and 5 Guidance. v) Stated that, in relation to record keeping, she was not satisfied in relation to the records relating to Mr Chako John (paragraph 34), but was satisfied in relation to Ms Sasikuttan and Mr Manu John (paragraph 37). vi) Stated that no evidence had been provided in relation to recording staff absences, and that she was not satisfied on this issue (paragraph 39). She placed reliance on Appendix D and Annex 6(j) of the Tier 2 and 5 Guidance. vii) Accepted that the Claimant had the requisite planning permission to use the premises at the Old Stables, 1, Grove Hill Road, Harrow as offices (paragraph 42). viii) Stated that she was not satisfied that a resident labour market test had been conducted, and also stated “…we believe that your clients have knowingly provided false representations.” (paragraph 54). ix) Stated that provision of the names of sponsored workers by the Claimant satisfied the Defendant on this issue (paragraph 57). x) Stated that the Claimant had provided no credible evidence that there was a link between Pathways Care Group Limited and the Claimant, and therefore the Claimant had no authorising officer in place who met the requirements of the Guidance, being a circumstances falling within paragraph 6(p) of Annex 6 to the Tier 2 and 5 Guidance (paragraphs 59 and 60). xi) Stated that she believed that the Claimant had access to the level 1 user (Mr Joyas John of Vostec)’s log in details in breach of paragraph 6.8 of the Tier 2 and 5 Guidance, and that the circumstances fall within paragraph 6(m) of Annex 6 to the Tier 2 and 5 Guidance. xii) Found that the Claimant had acted in contravention of Annex 5(x) (in fact (y)), and Annex 6(a), (j), (m) and (p) of the Tier 2 and 5 Guidance. xiii) Considered and rejected ‘downgrading’ the licence (paragraph 69). xiv) Concluded that the issues identified constituted a failure to comply with the Claimant’s sponsor duties (paragraph 70). xv) Taking into account Annex 6(g) of the Tier 2 and 5 Guidance, revoked the licence (paragraphs 71 and 72). xvi) Stated “Whilst you can no longer recruit sponsored workers under Tier 2 of the Points Based system, you can continue to recruit UK and EEA workers as well as non-EEA nationals that have a right to work in the UK. The revocation of the licence does not stop a business from trading.” (paragraph 74)

The Issues

[26]The Claimant contends that the Defendant’s decision was defective and relies upon seven grounds of challenge. Each ground relied upon is based upon an alleged defect in the Decision Letter.

[27]In making his submissions, Mr Biggs for the Claimant, when addressing each of the seven grounds, identified the defect he relied upon based upon the facts, and then identified the legal error he relied upon. The legal grounds of challenge can be identified as: i) The Defendant acted irrationally or perversely in forming the conclusions that she did. ii) The Defendant misinterpreted or misapplied her policy set out in the Tier 2 and 5 Guidance iii) The Defendant failed to take into account material considerations when deciding to revoke the licence, namely the effect upon the care provided for those resident in the care homes managed by the Defendant, and the public interest in the provision of care to those in need of it.

[28]Mr Biggs’s submissions were made in relation to the seven grounds, each based upon a particular matter or matters of fact.

[29]Ms McGahey, on behalf of the Defendant makes a number of general submissions on the law and then responded to Mr Biggs’s seven grounds.

[30]I will first consider the general submissions and then consider Mr Biggs’s seven grounds.

[31]Ms McGahey submits that the principles established in the London Reading College and New London College cases in relation to the Tier 4 scheme are equally applicable to the Tier 2 scheme. The particular aspects of the judgments that she relies upon are paragraph 60 in London Reading College (as quoted at paragraph [13] above) and the last two sentences contained in paragraph 29 of the judgment of Lord Sumption JSC in New London College:

“The Immigration Act does not prescribe the method of immigration control to be adopted. It leaves the Secretary of State to do that, subject to her laying before Parliament any rules that she prescribes as to the practice to be followed for regulating entry into and stay in the United Kingdom. Different methods of immigration control may call for more or less elaborate administrative infrastructure. It cannot have been Parliament's intention that the Secretary of State should be limited to those methods of immigration control which required no other administrative measures apart from the regulation of entry into or stay in the United Kingdom. If the Secretary of State is entitled (as she plainly is) to prescribe and lay before Parliament rules for the grant of leave to enter or remain in the United Kingdom which depend upon the migrant having a suitable sponsor, then she must be also be entitled to take administrative measures for identifying sponsors who are and remain suitable, even if these measures do not themselves fall within section 3(2) of the Act. This right is not of course unlimited. The Secretary of State cannot adopt measures for identifying suitable sponsors which are inconsistent with the Act or the Immigration Rules. Without specific statutory authority, she cannot adopt measures which are coercive; or which infringe the legal rights of others (including their rights under the Human Rights Convention); or which are irrational or unfair or otherwise conflict with the general constraints on administrative action imposed by public law. However, she has not transgressed any of these limitations by operating a system of approved Tier 4 sponsors. It is not coercive. There are substantial advantages for sponsors in participating, but they are not obliged to do so. The rules contained in the Tier 4 Guidance for determining whether applicants are suitable to be sponsoring institutions, are in reality conditions of participation, and sponsors seeking the advantages of a licence cannot complain if they are required to adhere to them.”

[32]Mr Biggs submits that the Tier 2 sponsoring regime can be distinguished from the Tier 4 sponsoring regime as in the care home context there is a widespread and widely acknowledged need for care providers to employ migrant carers, which need has been accepted by public bodies. He submits that the public interest and the differences in the operation of the Tier 2 sponsor licence regime as compared to the Tier 4 sponsor licence regime require the Court to form a fresh view as to the appropriate principles to apply.

[33]Under both the Tier 2 and Tier 4 regimes particular organisations are able to be registered as sponsors. The benefit to the sponsor of registering is that it is able to issue a statement which will assist a potential migrant from gaining entry to or leave or leave to remain in the United Kingdom. In the case of Tier 2, the sponsor assigns a CoS. In the case of Tier 4, an educational establishment is able to issue a confirmation of acceptance for studies. In the case of Tier 2 sponsorship, there are as with Tier 4, and as referred to by Lord Sumption JSC in paragraph 29 of his judgment in New London College, substantial advantages for sponsors in participating in the sponsorship regime. Both the Tier 2 and Tier 4 regimes entrust to the sponsor power to grant a certificate or letter which will assist a migrant to gain entry or leave to remain in the UK; that is a feature referred to by Neil Garnham QC at paragraph 60 in London Reading College.

[34]In my judgment the principles established in relation to Tier 4 sponsors, in particular the fact that the rules contained in the Tier 2 and 5 Guidance for determining whether organisations are suitable to be sponsors, are in reality conditions of participation, and that sponsors seeking advantage of a licence cannot complain if they are required to adhere to the guidance, are applicable when considering the application of the Tier 2 and 5 Guidance. As a result it is not appropriate to identify different general principles which would apply in the case of the Tier 2 guidance.

[35]Ms McGahey submits that when considering a challenge based upon perversity or Wednesbury unreasonableness the test to be applied is that identified by Lord Diplock in Council of Civil Service Unions v. Minister for the Civil Service

[1985] AC 374

namely that it would have to be established that the decision was:

“…so outrageous in defiance of logic or accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at it.”

Mr Biggs did not argue for any other test to be applied.

Ground 1

[36]The Claimant contends that the Defendant acted irrationally or in a Wednesbury unreasonable way when she found that, by failing to report that Lovely Joshy had been promoted to deputy manager, the Claimant failed to comply with the reporting requirement set out at paragraph 15.7(d) of the Tier 2 and 5 Guidance, and accordingly the circumstances fell within paragraph 6(j) of Annex 6 to the Guidance.

[37]Paragraph 15.7(d) of the Tier 2 and 5 Guidance states:

“15.7 You must report the following within 10 working days: … d) If there are any significant changes in the sponsored migrant’s circumstances, for example: a promotion or change in job title, or core duties, other than those which need a change of employment application;”

[38]Annex 6(j) of the Tier 2 and 5 Guidance states:

“We may revoke your licence if: As a result of information available to our compliance officers, we are not satisfied that you are using the processes or procedures necessary to fully comply with your sponsor duties.”

[39]The record of the visit carried out on 14th August 2014 states that Mr Patel told the officer that Ms Joshy (referred to as Joseph in the notes) had been promoted to deputy manager about four weeks ago.

[40]In the letter written by the Claimant’s solicitors dated 7th November 2014 it was stated:

“Our client has stated that Ms Joshy was granted a pay rise from £7.80 per hour to £8.00 per hour and there was some consideration as to whether her designation should be changed to Deputy Manager to reflect the change but mainly to acknowledge her efforts within the organisation. In the end it was decided to maintain her status. The rate of increase in her salary would not amount to promotion as such but an annual rise.”

[41]It appears from the supplementary witness statement of Mr Farebrother submitted by the Claimant, that Ms Joshy was offered promotion in June 2014, but that following advice from the Claimant’s immigration advisers, the offer was, by letter dated 13th October 2014, withdrawn.

[42]The Defendant’s reasoning, as set out in the letter dated 25th November 2014, is that the information contained in the Claimant’s solicitors’ letter of 7th November 2014 was inconsistent with the information provided by the Claimant’s director on 14th August 2014, and that the Claimant had failed to provide evidence to show that Ms Joshy’s role has not changed, and therefore she was not satisfied on this issue.

[43]Ms McGahey submits that the Defendant was entitled to prefer the account that the compliance officer was given at the time of the 14th August 2014 visit.

[44]The Defendant’s approach to this issue as set out in her letter dated 25th November 2014 cannot be described as irrational or perverse and I reject this ground of challenge.

Ground 2

[45]Mr Biggs submits that, in considering the issue of supply of staff to other parties, the Defendant acted irrationally and unreasonably, and failed to understand or apply her policy.

[46]The Defendant, in her letter dated 25th November 2014 made the following statements: i) The Claimant had failed to provide credible evidence which shows that there is a link between Minster Care Group and Pathways Care Group or that they are part of the same company. ii) Her records showed that the Claimant assigned CoS to allow two migrants to work as health service managers at Vicarage Farm Nursing Home although the Minster Care Group ceased to provide the care service at that nursing home on 18th October 2012. iii) The Claimant had failed to provide evidence that it was no longer providing sponsored workers to care homes which it does not own or that they have systems in place to ensure no sponsored workers are employed by a different company. iv) From the information referred to in her letter, the Defendant concluded that she was not satisfied that the Claimant was employing sponsored workers that are solely working within its care homes and that it was supplying staff to nursing homes it did not own. On that basis the Defendant concluded that the Claimant was acting as an employment agency, that paragraph 5.6 of the Tier 2 and 5 Guidance was engaged, and that the circumstances fell within paragraph (x) of Annex 5.

[47]Paragraph 5.6 of the Tier 2 and 5 Guidance states:

“If you are an employment agency or employment business, you can apply for a sponsor licence but only to sponsor migrant workers who will be directly employed by you in connection with the running of your business. You can’t sponsor a migrant who you then supply to a third party as labour, regardless of any contractual arrangement between the parties involved.”

[48]It appears that the reference to Annex 5 was to paragraph (y), which states:

“We will revoke your licence if: (y) You are an employment agency or business and you have supplied migrants that you are sponsoring to a third party as labour.”

[49]Mr Biggs submits that the provisions of the policy do not apply to the Claimant as it is not an employment agency and is not acting as one. He submits that the substance of the agreement is that the Claimant retained control over the Tier 2 workers at Vicarage Farm Nursing Home.

[50]Ms McGahey submits that in practical terms the Claimant was acting as an employment agency. She also submits that the Defendant was entitled to find that the Claimant was supplying sponsored workers to care homes it did not own.

[51]The Claimant’s solicitors provided the Defendant with a diagram showing the relationship between the companies in which the Patel family trusts had shareholdings. The diagram is headed ‘Minster Care Group’. One of the companies in which the Patel family trust has shareholdings is Minster Pathways Limited, whose name has been changed to Pathways Care Group Limited. The Defendant did not find that there was no evidence of a link between Minster Care Group and Pathways Care Group but that there was no credible evidence of such a link.

[52]The information provided to the Defendant was limited; it consisted of a list of companies set out in a diagram. A certificate of incorporation on change of name, from Minster Pathways Limited to Pathways Care Group Limited was provided. No detailed information about the ownership of the shares in each company, or other information to explain the relationship between the companies, was provided. It was for the Defendant to form a view based upon the information provided to her by the Claimant as to whether she judged the evidence to be credible. Given the limited information with which the Defendant was provided, in my judgment it cannot be said that the conclusion that there was no credible evidence of the link between Minster Care Group and Pathways Care Group was irrational.

[53]The evidence relied upon by the Defendant related to the arrangements at Vicarage Farm Nursing Home. The Claimant’s, with their solicitors’ letter dated 7th November 2014, provided the Defendant with a copy of their management contract with Astoria Healthcare Ltd by which the Claimant was appointed to operate the Vicarage Farm nursing home business. Under the terms of the contract the Claimant agreed to undertake the day to day management of the business, being the provision of care homes and care facilities.

[54]Paragraph 5.6 of the Tier 2 and Tier 5 Guidance applies “If you are an employment agency or employment business, …”. Annex 5(y) applies if a sponsor is an “.. employment agency or business”. The Defendant does not contend that the Claimant is an employment agency or employment business, but that it acted as an employment agency.

[55]As I have already noted, Mr Biggs made further written submissions on this issue. I agree with Ms McGahey’s submission that it is wrong and too late to make further submissions in relation to ground 2. However I have considered those submissions. Mr Biggs relies upon James v. London Borough of Greenwich

[2008] EWCA Civ 35

, a case concerning the question of whether an employment tribunal erred in law in finding that the Appellant was not an employee of the Respondent. Mr Biggs also relied upon information on the Government website about employment agencies and businesses. I do not find the case of Jamesor the information from the Government website of assistance in determining the issue in dispute in this case, namely whether the Defendant acted irrationally and unreasonably, and failed to understand or apply her policy.

[56]In my judgment the Defendant misapplied her policy. Paragraph 5.6 of the Tier 2 and 5 Guidance is found under the heading ‘Sponsors Structure’ Paragraph 5.6 contemplates that an employment agency or business can apply for a sponsor licence, but only to sponsor migrant workers who will be directly employed by such businesses in connection with the running of the business. The Claimant did not apply for, and was not granted, a sponsor licence as an employment agency or business; therefore paragraph 5.6 is not applicable to it. The Claimant managed the Vicarage Farm Nursing Home, they did not supply staff to another organisation. The relevant provisions of the policy apply if a sponsor is an employment agency or employment business; the Claimant is neither an employment agency nor employment business, and was not acting in either capacity.

[57]Further, I accept Mr Biggs’s submission that it was irrational for the Defendant to hold that the Claimant was acting as if it were an employment agency, as Vicarage Farm was operated by the Claimant, and the Claimant retained a substantial degree of control over the home.

[58]I uphold this ground on the basis that the Defendant’s wrongly applied her policy relating to employment agencies and businesses when the Claimant did not fall into either category and it was irrational to treat it as if it did.

Ground 3

[59]Under this ground Mr Biggs submits that there is no rational basis for criticism of the Claimant in relation to record keeping in the case of Geno Chako John, and that Defendant acted unreasonably and unfairly in relying upon the fact that the Claimant was unable to provide records showing migrant workers’ absences. Mr Biggs made further written submissions on this issue when making submissions on remedy.

[60]The Defendant, in her letter dated 25th November 2014 stated that: i) The Claimant assigned a certificate of sponsorship for Geno Chako John to work as a registered general nurse on condition that he gained his registration with the Nursing and Midwifery Council within 12 months. The Claimant had failed to provide evidence to show that Mr John’s application was under consideration by the Nursing and Midwifery Council and therefore the circumstances fell within those described in paragraph 6(j) of Annex 6 of the Tier 2 and 5 Guidance. ii) The Claimant had failed to demonstrate that they recorded the absences of migrant workers, in contravention of Appendix D of the Tier 2 and 5 Guidance, and therefore the circumstances fell within those described in paragraph 6(j) of the Tier 2 and 5 Guidance.

[61]Paragraph 6(j) of Annex 6 of the Tier 2 and 5 Guidance states:

“We may revoke your licence if: As a result of information available to our compliance officers, we are not satisfied that you are using the processes or procedures necessary to fully comply with your sponsor duties.”

[62]Appendix D of the Tier 2 and 5 Guidance states:

“All documents submitted as part of your application to become a licensed sponsor. These documents must be kept for the duration of the period covered by your licence. 1g Record of the migrant’s absence(s). For example, this may be kept either electronically or manually.”

[63]The Claimant’s solicitors, in their letter dated 7th November 2014, stated that Mr John had been asked to provide further evidence to the Nursing and Midwifery Council which they understood he had provided.

[64]The Defendant stated, in her letter of 25th November 2014, that the Claimant had failed to provide evidence that the application made by Mr John was under consideration and therefore she was not satisfied that the issue had been addressed.

[65]The Defendant’s approach discloses no irrationality. The Defendant raised the issue relating to Mr John in her letter dated 13th October 2014, and received no evidence in response other than the Claimant’s solicitors statement of their understanding.

[66]The Claimant has, subsequent to the decision made by the Secretary of State, provided a letter dated 10th November 2014 from the Nursing and Midwifery Council showing that Mr John is entered on the register as a registered nurse.

[67]The ground relating to the Defendant’s consideration of record keeping in relation to Mr John fails as, the Defendant did not err at the time that the decision under challenge was made.

[68]The second element of this ground relates to records of absences of migrant workers. This issue was raised in the Defendant’s letter dated 13th October 2014 (in paragraphs 19-21). The Claimant’s solicitors did not address this issue in their letter dated 7th November 2014. The Defendant’s conclusion that she was not satisfied on this issue cannot properly be said to be unfair or unreasonable; she gave the Claimant the opportunity to provide the information, the Claimant did not do so, and the Defendant concluded that she was not satisfied on this issue.

[69]The second element of this ground fails.

Ground 4

[70]The Defendant conceded that she erred in finding that she was not satisfied that the Claimant had conducted the resident labour market test.

[71]The finding, which is now accepted to be erroneous, led the Defendant to conclude that that she believed that the Claimant had knowingly provide false representations and that the circumstances fell within the paragraph 6(a) of Annex 6 to the Tier 2 and 5 Guidance, which provides:

“We may revoke your licence if: (a) You have knowingly provided false statements or false information, or not provided information that you held when required to, to us (or the former Immigration and Nationality Directorate, Border and Immigration Agency or UK Border Agency) or any other Government Department.”

Ground 5

[72]Mr Biggs submits that the Defendant failed to apply her policy and acted irrationally in concluding that the Claimant had no authorising officer in place who met the requirements of the Tier 2 and 5 Guidance.

[73]Ms McGahey relies upon the matters set out in the Defendant’s 25th November 2014 letter.

[74]In the letter sent by the Claimant’s solicitors on 7th November 2014, it was stated that the authorising officer was employed by a company within the group of companies and that he is paid by Pathways Care Group Limited.

[75]In her letter dated 25th November 2014 the Defendant stated that: i) During the August 2014 compliance visit the compliance officer was informed that Mr Farebrother, the authorising officer, was employed by Pathways Care Group Limited and that the Claimant had failed to provide credible evidence that there was a link between Pathways Care Group Limited and Minster Care Group. ii) The circumstances fall within paragraph 6(p) of Annex 6 to the Tier 2 and 5 Guidance.

[76]Paragraph 6.1 of the Tier 2 and 5 Guidance states: “6.1 The online sponsor application requires you to give certain responsibilities to members of your staff, some or all of which will have access to the sponsorship management system (SMS) after a licence has been granted. For more information on the SMS, please see section 2. We call these people ‘Key Personnel’ and there are four roles: a) authorising officer; b) key contact; c) level 1 user; d) level 2 user. “

[77]Paragraph 6.3(c) of the Tier 2 and 5 Guidance states “6.3 Each of your Key Personnel: c) must be a paid member of your staff or engaged by you as an office holder. The only exceptions are: …”

[78]The exceptions referred to in paragraph 6.3(c) are not relevant in this case.

[79]Annex 6(p) of the Tier 2 and 5 Guidance states:

“We may revoke your licence if: (p) You have no authorising officer in place that meets the requirements set out in authorising officer.”

[80]The reference in paragraph 6(p) of Annex 6 to the Tier 2 and 5 Guidance to ‘authorising officer’ is to the section of the guidance, at paragraphs 6.13 to 6.16.

[81]Mr Biggs accepted that Mr Farebrother was neither a director, nor other formal office holder of the Claimant, and was not employed by the Claimant. Mr Biggs sought to argue that, by virtue of the fact that Mr Farebrother was described as ‘operations director’ of the Minster Care Group he is to be treated as an office holder falling within the ambit of paragraph 6.3(c) of the Tier 2 and 5 Guidance. Mr Biggs also raised an argument that the Defendant failed to consider whether Mr Farebrother was an office holder. These arguments were not put forward in the Claimant’s solicitors’ letter of 7th November 2014.

[82]The argument that someone given the title ‘operations director’ can be treated as an ‘office holder’ when applying the policy in paragraph 6.3(c) of the guidance was not put to the Defendant before she made her decision. It cannot be said that she misapplied her policy by failing to treat a person described as an ‘operations director’ as an office holder. There can be no legitimate complaint that the Defendant failed to consider whether Mr Farebrother was an office holder, when the argument was not put to her, and he was not identified as holding a particular office in the Claimant company.

[83]For the reasons already given at paragraph [52] above, on the basis of the limited information with which the Defendant was provided, in my judgment it cannot be said that the conclusion that there was no credible evidence of the link between Minster Care Group and Pathways Care Group was irrational.

[84]Even on the Claimant’s own case, it is accepted that Mr Farebrother was not a paid member of staff of the Claimant and was not a director of the Claimant.

[85]In my judgment, it cannot be said that the Defendant’s conclusion, that the issue of whether the Claimant had an authorising officer who was an employee or an office holder had not been addressed, was irrational.

[86]Mr Biggs further submits that the Defendant made a material mistake of fact in refusing to accept that the companies, Pathways Care Group Limited and the Claimant, were linked.

[87]In E v. Secretary of State for the Home Department

[2004] QB 1044

it was held that a mistake of fact giving rise to unfairness is a separate head of challenge in an appeal on a point of law. When giving the judgment of the Court of Appeal Carnwath LJ stated, at paragraph 66:

“In our view, the time has now come to accept that a mistake of fact giving rise to unfairness is a separate head of challenge in an appeal on a point of law, at least in those statutory contexts where the parties share an interest in co-operating to achieve the correct result. Asylum law is undoubtedly such an area. Without seeking to lay down a precise code, the ordinary requirements for a finding of unfairness are apparent from the above analysis of CICB. First, there must have been a mistake as to an existing fact, including a mistake as to the availability of evidence on a particular matter. Secondly, the fact or evidence must have been "established", in the sense that it was uncontentious and objectively verifiable. Thirdly, the appellant (or his advisers) must not been have been responsible for the mistake. Fourthly, the mistake must have played a material (not necessarily decisive) part in the Tribunal's reasoning.”

[88]In this case the fact under consideration, namely the connection between Pathways Care Group Limited and the Claimant, was not, at the time that the decision was made, an established fact, in the sense that it was uncontentious and objectively verifiable. Furthermore the Claimant had been given the opportunity to set out the link between Pathways Care Group Limited and the Claimant but had failed to set out the position with sufficient clarity to satisfy the Defendant. The conditions necessary to establish a mistake of fact are not present.

[89]I reject this ground of challenge.

Ground 6

[90]Mr Biggs submits that the Defendant acted irrationally in forming the view based upon information provided to the compliance officer during the August 2014 visit, that the level 1 user (Mr John)’s log in details for the SMS were being used by others. Mr Biggs further submits that in the light of the explanation advanced on behalf of the Claimant there was no rational basis upon which to conclude that Mr John’s log in details had been used by others.

[91]In her letter dated 13th October 2014 the Defendant alleged that the compliance officer who had carried out the August 2014 visit had been told by told by Mr Surendra Patel (a director of the Claimant) that Mr Farebrother, the Claimant’s Authorising Officer, had access to the SMS using the level 1 user (Mr Joyas John)’s log in details.

[92]The Claimant’s solicitors responded to that allegation in their letter dated 7th November 2014. In that letter the Claimant’s solicitors stated that Mr Patel merely confirmed that the Authorising Officer had access to the system meaning the business and its systems, and that he (Mr Patel) has never seen or operated the SMS and would have no reason to do so. The solicitors, in that letter, do not answer the specific allegation put, namely that the Authorising Officer had access to the level 1 user’s log in details.

[93]The Defendant, in her letter dated 25th November 2014, referred to the record of the visit carried out by the compliance officer in August 2014. The note of the August 2014 visit records that Mr Surendra Patel (a director of the Claimant company) told the compliance officer that the Authorising Officer, Colin Farebrother, had access to the Sponsor Management System. The Defendant referred to the Claimant’s solicitors response to this allegation, as set out in the letter dated 7th November 2014, and concluded that the she was not satisfied that the issue had been addressed.

[94]In my judgment the Defendant’s conclusion cannot properly be said to be irrational as submitted by Mr Biggs. The allegation made, namely that Mr Farebrother had access to the level 1 user’s log in information for the SMS, was based upon the notes of the August 2014 inspection, and was clearly set out in the 13th October 2014 letter. In their letter dated 7th November 2014 the Claimant’s solicitors did not provide an answer to that allegation. In those circumstances it was not irrational or unreasonable for the Defendant to conclude that the level 1 user’s log in details were being used by others.

[95]I reject this ground of challenge.

Ground 7

[96]Mr Biggs submits that, in her decision communicated in her letter dated 25th November 2014, the Defendant failed to take into account a material considerations, namely the needs and welfare of the Claimant’s service users, being the residents of the eleven care homes, and the public interest in the provision of care to those in need of it.

[97]In her skeleton argument Ms McGahey submits that the Claimant employs 29 migrant workers, being on average 2 or 3 staff members, in each of the 11 relevant care homes. Ms McGahey submits that the effect on the care homes of the decision to the decision to revoke the sponsor licence was not as severe as suggested by the Claimant,

[98]In their letter dated 7th November 2014, the Claimant’s solicitors drew attention to the impact of revocation, and contended that revocation of the licence “ … would result in the home being unable to function. Given the complex needs of the residents it would also have a significant effect on the residents.”

[99]The Defendant, in her decision letter dated 25th November 2014, did take into account the impact of the revocation on the licence on the business, and stated that the Claimant could continue to recruit UK and EEA workers as well as non EEA-nationals who have a right to work in the UK, and that the revocation of the licence does not stop a business from trading.

[100]Although the Defendant’s letter does not make express reference, under a heading ‘impact of revocation’, to the contentions advanced on behalf of the Claimant by its solicitors, it is clear that the Defendant did take into account the effects of revocation and the public interest in the provision of care to those in need of care, when she referred to the fact that the Claimant would no longer be able to recruit sponsored workers under Tier 2 of the Points Based system. The Defendant noted that the Claimant could recruit other categories of workers, and that revocation does not stop a business from trading. In my judgment there was no failure to take into account the impact of revocation of the public interest in the provision of care to those in need of care.

[101]I reject this ground of challenge.

Conclusion

[102]The Defendant’s decision to revoke the sponsor licence was based upon her finding that the Claimant had acted in contravention of the following paragraphs in Annexes 5 and 6 of the Tier 2 and 5 Guidance, paragraph 5(x) (this should be (y)), 6(a), 6(j), 6(m), and 6(p).

[103]By the Defendant’s concession on ground 4, she accepts that she erred in basing her decision on a contravention of paragraph 6(a) of Annex 6, and erred in finding the Claimant had knowingly provided false representations.

[104]In addition I have found in the Claimant’s favour on ground 2; as a result the Defendant also erred in basing her decision on a contravention of paragraph 5(y) of Annex 5 of the Tier 2 and 5 Guidance.

[105]It is necessary to consider whether, in the exercise of my discretion, I should decline to quash the Defendant’s decision.

[106]The law on this issue is common ground between the parties. The approach to be taken is that set out by May LJ in R (oao Smith) v. North Eastern Derbyshire Primary Care Trust

[2006] 1 WLR 3315

at paragraph 10:

“I have already noted that neither Mr Pittaway nor Mr Post contended that the judge's second reason, that is that the decision would probably have been the same anyway, was alone sufficient to sustain his conclusion. That is a proper concession. Probability is not enough. The defendant would have to show that the decision would inevitably have been the same and the court must not unconsciously stray from its proper province of reviewing the propriety of the decision-making process into the forbidden territory of evaluating the substantial merits of the decision.”

[107]In her oral submissions Ms McGahey informed the court that the Defendant would have revoked the licence on the basis of any of the grounds which the Claimant challenges. In her written submissions Ms McGahey repeats her submission that the Defendant would have revoked the licence on the basis of any one of the grounds on which she relied in her letter dated 25th November 2014, and that if the Court upholds the Defendant’s decision on one or more grounds it will be for the Court to determine whether the decision was lawful. She submits, as an example, that revocation would have been inevitable and lawful on the basis of the facts which are referred to in ground 1 if that had been the sole reason for revocation. She submits that each ground relied upon by the Secretary of State, either alone or in combination, would have made revocation of the licence inevitable and that the decision to revoke would have been one lawfully open to her.

[108]In paragraph 69 of her letter dated 25th November 2014 the Defendant stated:

“As already stated, you clients have acted in contravention of Annexes 5 and 6. 5(x), 6(a), 6(j), 6(m) and 6(p) of the Tier 2 and 5 Sponsor Guidance. Downgrading their licence is not appropriate due to the seriousness of their non-compliance with the sponsor duties.”

[109]The decision to revoke the licence as opposed to the alternative sanction of ‘downgrading’ it was expressed to be based upon the combination of breaches of the Tier 2 and 5 Guidance. By conceding ground 4, the Secretary of State no longer relies upon a contention that the Claimant knowingly made false representations. My finding that the Claimant succeeds on ground 2 means that the Defendant erred in relying upon Annex 5 of the Tier 2 and 5 Guidance. Annex 5 sets out circumstances in which the Defendant indicates that she ‘will’ revoke a licence and can be contrasted with Annex 6, circumstances in which she ‘may’ revoke a licence.

[110]The two errors go to important issues, and it in my judgment, it cannot be said that the decision would inevitably have been the same if the Defendant had not erred. I would come to the same conclusion on discretion if I was wrong in finding that ground 2 was made out, and ground 4 was the only ground on which the Claimant succeeded. The reasons why I have come to that conclusion are that the facts on which ground 4 were based included the finding that the Claimant had knowingly provided false representations, and as in the decision letter the Defendant relied upon the combination of breaches to conclude that downgrading the licence was not appropriate.

[111]For the reasons I have given I grant permission to apply for judicial review and on the substantive application I order that the Defendant’s decision made by letter dated 25th November 2014 to revoke the Claimant’s sponsor licence be quashed.