Treal Care (UK) Ltd, R (on the application of) v Secretary of State for the Home Department [2025] EWHC 1797 (Admin)

[2025] EWHC 1797 (Admin)Case No AC-2024-LON-003923
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
ADMINISTRATIVE COURT
Venue Royal Courts of Justice,Date 16 July 2025
Strand
London
WC2A 2LL
Before
Simon Tinkler sitting as a Deputy Judge of the High Court
Between
TREAL CARE (UK) LTDClaimantSecretary of State for the Home DepartmentDefendant
Zane Malik KC and Arif Rehman (instructed by AWS Solicitors) for ClaimantLord Murray of Blidworth (instructed by Government Legal Department) for DefendantHearing Hearing date: 20 May 2025
Approved JudgmentThis judgment was handed down remotely at 2.00pm on 16 th July 2025 by circulation to the parties or their representatives by e-mail and by release to the National Archives..............................

Simon Tinkler sitting as a Deputy Judge of the High Court:

[1]The claimant (“Treal”) supplies care staff to the NHS, local authorities and clinical care groups. It had a sponsor licence from the defendant (“SSHD”) to issue Certificates of Sponsorship (“CoS”) to skilled migrants to work for it. On 1 October 2024, SSHD wrote to Treal to communicate their decision to revoke the licence (the “Decision”). The Decision revoked the licence on the grounds that: i) three employees had not been paid the salary set out in their CoS (the “Salary Issue”); and ii) Treal had no genuine vacancy for those three employees (the “Genuine Vacancy Issue”)[2]Treal applied for judicial review of the Decision.

Grounds

[3]Treal was given permission to apply for judicial review on three grounds:(1) The Secretary of State misconstrued the guidance and CoS description and made an irrational or inadequately reasoned decision regarding the Salary Issue.(2) The Secretary of State misconstrued the guidance and made an irrational or inadequately reasoned decision regarding the Genuine Vacancy Issue.(3) The Secretary of State failed to conduct an adequately reasoned global assessment of all relevant considerations.[4]In light of the Court of Appeal’s judgment in Prestwick Care and Supporting Care v Secretary of State for the Home Department [2025] EWCA Civ 184, Treal did not pursue Ground (3).[5]Treal applied on 4 April 2025 to advance an additional ground: (4) The Secretary of State acted in a procedurally unfair manner.[6]SSHD set out in their skeleton argument why they resisted the application to include the additional ground.[7]Having considered the papers in detail, at the start of the substantive hearing I indicated that I would have refused permission on the papers to advance the ground. This was on the substantive basis that i) the letter sent to Treal dated 21 August 2024 (the “Suspension Letter”) fairly set out the grounds on which SSHD might revoke the licence and gave Treal fair opportunity to respond to those grounds; and ii) the procedural matters raised were in all material respects already under challenge under existing grounds 1 and 2.[8]It was also on the procedural basis that the new ground had not been applied for promptly.[9]I invited Treal to, in effect, make a renewal application if it wished to continue with its application on Ground 4. After consideration, Treal decided not to pursue Ground 4.

Procedural History

[10]The Claimant sent a pre-action protocol letter to the Secretary of State on 17 October 2024. The Secretary of State responded to that letter on 29 October 2024. Treal issued these judicial review proceedings on 28 November 2024. SSHD filed the Acknowledgment of Service on 20 February 2025. His Honour Judge Anthony Dunne granted permission to apply for judicial review on 10 February 2025. The Secretary of State filed detailed grounds of defence and evidence on 17 March 2025.

Law

[11]The parties were largely agreed on the relevant law. Any legal matters in dispute are set out later in this judgment when the specific point is raised.

Obligation to have regard to relevant policy

[12]The proper approach to the interpretation of administrative policies was considered by the Supreme Court in Tesco Stores Limited v Dundee City Council [2012] UKSC 13 [2012] PTSR 983. The Supreme Court, at [17] and [18], said: “[A] decision will be open to challenge if [it] fails to have regards to a policy ……which is relevant to the application or fails properly to interpret it” “policy statements should be interpreted objectively in accordance with the language used, read as always in its proper context”.[13]Further, the Supreme Court in Mandalia v Secretary of State for the Home Department [2015] UKSC 59 [2016] 4 All ER 189 held that: ”The individual has a basic public law right to have his or her case considered under whatever policy the executive sees fit to adopt provided that the adopted policy is a lawful exercise of the discretion conferred by the statute.”[14]It further noted that at [31], noted that interpretation of policy documents “is a matter of law which the Court must therefore decide for itself”.[15]The Supreme Court also made it clear that:
“previous suggestions that the courts should adopt the Secretary of State's own interpretation of her immigration policies unless it is unreasonable, made for example in Gangadeen and Jurawan v Secretary of State for the Home Department [1998] Imm AR 106 at p 115, are therefore inaccurate”
.

Reasons for decisions

[16]There is a public law obligation on decision makers to give adequate reasons for their decisions. In South Bucks District Council v Porter [2004] UKHL 33 [2004] WLR 1953, Lord Brown explained:
“36 The reasons for a decision must be intelligible and they must be adequate. They must enable the reader to understand why the matter was decided as it was and what conclusions were reached on the ‘principal important controversial issues’, disclosing how any issue of law or fact was resolved…The reasoning must not give rise to a substantial doubt as to whether the decision make erred in law for example by misunderstanding some relevant policy or some other important matter or by failing to reach a rational decision on relevant grounds.”

Obligation to indicate suspicion and to take response into account

[17]The Supreme Court, in Bank Mellat v HM Treasury [2013] UKSC 39, [2014] AC 700, at [179], made it plain that the rule is that “before a statutory power is exercised, any person who foreseeably would be significantly detrimentally affected by the exercise should be given the opportunity to make representations in advance, unless(i) the statutory provisions concerned expressly or impliedly provide otherwise, or(ii) the circumstances in which the power is to be exercised would render it impossible, impractical, or pointless to afford such an opportunity”. The Court of Appeal, in Balajigari v Secretary of State for the Home Department [2019] EWCA Civ 673, [2019] 1 WLR 4647, at [45]-[61], and the Supreme Court, in Pathan v Secretary of State for the Home Department [2020] UKSC 41, [2021] 2 All ER 761, at [176], held that this approach applies in the immigration context as well.[18]The Court of Appeal recently reviewed this area of law in Prestwick. In that case, as in this case, the Secretary of State had revoked the sponsor licence on the grounds that the role of an employee did not represent a genuine vacancy. The revocation of the licence was challenged on grounds that the decision-making process was unfair, the Secretary of State had misapplied the guidance, and the decision was irrational or inadequately reasoned. The Court of Appeal upheld these grounds and confirmed the quashing of the revocation decision. In doing so, the Court of Appeal, at [133]-[136], identified the relevant principles. In short:(1) It is for the Secretary of State to establish the allegation on the balance of probabilities.(2) Where the Secretary of State has a suspicion, they must clearly indicate to the sponsor that they have that suspicion, so that the sponsor has a fair opportunity to respond.(3) Having received the sponsor’s representations in response, the Secretary of State must consider all the circumstances before concluding that the sponsor has deliberately exaggerated a role in order to facilitate a person’s stay in this country.(4) The Secretary of State must provide adequate reasons.

Assessment of irrationality

[19]In Kennedy v Charity Commission [2014] UKSC 20 [2014] 2 WLR 808 Lord Mance observed at paragraph 51 that “The common law no longer insists on the uniform application of the rigid test of irrationality once thought applicable under the so-called Wednesbury principle….The nature of judicial review in every case depends on the context. The change in this respect was heralded by Lord Brdige of Harwich [said] in R v Secretary of State for the Home Department Ex p. Bugdaycay [1987] AC 514 where he indicated that, subject to the weight to be given to a primay decision maker’s finding of fact and exercise of discretion “the court must …be entitled to subject an administrative decision to the more rigorous examination, to ensure that it is in no way flawed, according to the gravity of the issue which the decision determines” and at paragraph 54 that “both reasonableness review and proportionality involve considerations of the scrutiny and weight to be given to any primary decision maker’s view depending on the context”[20]In this context, as emphasised in Raj and Knoll Limited v the Secretary of State for the Home Department [2015] EWHC 1329 (Admin), at [21], the primary judgment about the appropriate response to breaches by licence holders is that of the Secretary of State.

Senior Courts Act 1981 s31(2A)

[21]SSHD argued that even if the Decision was flawed, s31(2A) of the Senior Courts Act 1981 required that the court did not quash it. That section provides:
“(2A) The High Court must refuse to grant relief on an application for judicial review, and may not make an award under subsection (4) on such an application, if it appears to the court to be highly likely that the outcome for the applicant would not have been substantially different if the conduct complained of had not occurred. (2B) The court may disregard the requirements in subsection (2A)(a) and (b) if it considers that it is appropriate to do so for reasons of exceptional public interest. (2C) If the court grants relief or makes an award in reliance on subsection (2B), the court must certify that the condition in subsection (2B) is satisfied.”
[22]The principles to be borne in mind were recently considered by Linden J in TTT v Michaela Community Schools Trust [2024] EWHC 843 (Admin):
“269. I have reminded myself of the distillation of the principles provided by Ms Kate Grange QC sitting as a deputy judge of the Queen’s Bench Division in R (Cava Bien) v Milton Keynes Council [2022] RVR 37, para 52 which includes the following: (i) The burden of proof is on the defendant … (ii) The ‘highly likely’ standard of proof sets a high hurdle. Although section 31(2A) has lowered the threshold for refusal of relief where there has been unlawful conduct by a public authority below the previous strict test set out in authorities such as Simplex GE (Holdings) Ltd v Secretary of State for the Environment [2017] PTSR 1041, the threshold remains a high one … (iii) The ‘highly likely’ test expresses a standard somewhere between the civil standard (the balance of probabilities) and the criminal standard (beyond reasonable doubt) … (iv) The court is required to undertake an evaluation of the hypothetical or counterfactual world in which the identified unlawful conduct by the public authority is assumed not to have occurred … (v) The court must undertake its own objective assessment of the decision-making process and what the result would have been if the decision-maker had not erred in law … (viii) The provision is designed to ensure that, even if there has been some flaw in the decision-making process which might render the decision unlawful, where the other circumstances mean that quashing the decision would be a waste of time and public money (because, even when adjustment was made for the error, it is highly likely that the same decision would be reached), the decision must not be quashed and the application should instead be rejected. The provision is designed to ensure that the judicial review process remains flexible and realistic …” (x) The court can, with due caution, take account of evidence as to how the decision-making process would have been approached if the identified errors had not occurred … Furthermore, a witness statement could be a very important aspect of such evidence … although the court should approach with a degree of scepticism self-interested speculations by an official of the public authority which is found to have acted unlawfully about how things might have worked out if no unlawfulness had occurred … (xi) Importantly, the court must not cast itself in the role of the decision-maker … While much will depend on the particular facts of the case before the court, ‘nevertheless the court should still bear in mind that Parliament has not altered the fundamental relationship between the courts and the executive. In particular, courts should still be cautious about straying, even subconsciously, into the forbidden territory of assessing the merits of a public decision under challenge by way of judicial review. If there has been an error of law, for example in the approach the executive has taken to its decision-making process, it will often be difficult or impossible for a court to conclude that it is “highly likely” that the outcome would not have been “substantially different” if the executive had gone about the decision-making process in accordance with the law. Courts should also not lose sight of their fundamental function, which is to maintain the rule of law’: R (Plan B Earth) v Secretary of State for Transport [2020] PTSR 1446 at para 273. (xii) It follows that where particular facts relevant to the substantive decision are in dispute, the court must not ‘take on a fact-finding role, which is inappropriate for judicial review proceedings’ where the ‘issue raised … is not an issue of jurisdictional fact’. The court must not be enticed ‘into forbidden territory which belongs to the decision-maker, reaching decisions on the basis of material before it at the time of the decision under challenge, and not additional evidence after the event when a challenge is brought’. To do otherwise would be to use section 31(2A) in a way which was never intended by Parliament … (xiv) Finally, the contention that the section 31(2A) duty is restricted to situations in which there have been trivial procedural or technical errors … was rejected by the Court of Appeal …” (i) The burden of proof is on the defendant … (ii) The ‘highly likely’ standard of proof sets a high hurdle. Although section 31(2A) has lowered the threshold for refusal of relief where there has been unlawful conduct by a public authority below the previous strict test set out in authorities such as Simplex GE (Holdings) Ltd v Secretary of State for the Environment [2017] PTSR 1041, the threshold remains a high one … (iii) The ‘highly likely’ test expresses a standard somewhere between the civil standard (the balance of probabilities) and the criminal standard (beyond reasonable doubt) … (iv) The court is required to undertake an evaluation of the hypothetical or counterfactual world in which the identified unlawful conduct by the public authority is assumed not to have occurred … (v) The court must undertake its own objective assessment of the decision-making process and what the result would have been if the decision-maker had not erred in law … (viii) The provision is designed to ensure that, even if there has been some flaw in the decision-making process which might render the decision unlawful, where the other circumstances mean that quashing the decision would be a waste of time and public money (because, even when adjustment was made for the error, it is highly likely that the same decision would be reached), the decision must not be quashed and the application should instead be rejected. The provision is designed to ensure that the judicial review process remains flexible and realistic …” (x) The court can, with due caution, take account of evidence as to how the decision-making process would have been approached if the identified errors had not occurred … Furthermore, a witness statement could be a very important aspect of such evidence … although the court should approach with a degree of scepticism self-interested speculations by an official of the public authority which is found to have acted unlawfully about how things might have worked out if no unlawfulness had occurred … (xi) Importantly, the court must not cast itself in the role of the decision-maker … While much will depend on the particular facts of the case before the court, ‘nevertheless the court should still bear in mind that Parliament has not altered the fundamental relationship between the courts and the executive. In particular, courts should still be cautious about straying, even subconsciously, into the forbidden territory of assessing the merits of a public decision under challenge by way of judicial review. If there has been an error of law, for example in the approach the executive has taken to its decision-making process, it will often be difficult or impossible for a court to conclude that it is “highly likely” that the outcome would not have been “substantially different” if the executive had gone about the decision-making process in accordance with the law. Courts should also not lose sight of their fundamental function, which is to maintain the rule of law’: R (Plan B Earth) v Secretary of State for Transport [2020] PTSR 1446 at para 273. (xii) It follows that where particular facts relevant to the substantive decision are in dispute, the court must not ‘take on a fact-finding role, which is inappropriate for judicial review proceedings’ where the ‘issue raised … is not an issue of jurisdictional fact’. The court must not be enticed ‘into forbidden territory which belongs to the decision-maker, reaching decisions on the basis of material before it at the time of the decision under challenge, and not additional evidence after the event when a challenge is brought’. To do otherwise would be to use section 31(2A) in a way which was never intended by Parliament … (xiv) Finally, the contention that the section 31(2A) duty is restricted to situations in which there have been trivial procedural or technical errors … was rejected by the Court of Appeal …”

Facts

[23]SSHD operates a scheme under which employers can, if authorised, issue Certificates of Sponsorship. Treal and SSHD both emphasised the importance of this scheme, and of compliance with its rules. They recognised that it provided a benefit to those who adhered to its rules. They also both said they recognised that proper enforcement of the rules was necessary to prevent those benefits being taken by those who did not comply with those rules.[24]Treal had a workforce of some 85 employees. Around 75 of those employees worked with a CoS provided by Treal.

The Guidance

[25]SSHD has guidance for sponsoring employees. That sets out their obligations. It also sets out circumstances in which SSHD may revoke the sponsorship licence. The relevant guidance in this case was The Workers and Temporary Workers Guidance (the “Guidance”). It was valid from 8 March 2024.[26]Section C1 of the Guidance set outs the duties and expected behaviour of a sponsor. Under the heading “Complying with our immigration laws”, Paragraph C1.38 provides:
“You must comply with our immigration laws and all parts of the Worker and Temporary Worker sponsor guidance. To do this, you must: … · not assign a CoS where there is no genuine vacancy or role which meets the Worker or Temporary Worker criteria – if you assign a CoS and we do not consider it is for a genuine vacancy, we reserve the right to suspend your licence, pending further investigation which may result in your licence being revoked …”
[27]Paragraph C1.44 of the Guidance seeks to define a genuine vacancy in these terms:
“A genuine vacancy is one which: · requires the jobholder to perform the specific duties and responsibilities for the job and meets all of the requirements of the relevant route · does not include dissimilar and/or predominantly lower-skilled duties · is appropriate to the business in light of its business model, business plan and scale”
[28]Paragraph C1.46 of the guidance adds:
“Examples of vacancies that are not considered to be genuine include, but are not limited to: · a role that does not actually exist · one which contains an exaggerated or incorrect job description to deliberately make it appear to meet the requirements of the route when it does not, or is otherwise a sham · a job or role that was created primarily to enable an overseas national to come to, or stay in, the UK · advertisements with requirements that are inappropriate for the job on offer (for example, language skills which are not relevant to the job) or incompatible with the business offering the employment, and have been tailored to exclude settled workers from being recruited”
[29]Annex C1 of the guidance, under the heading “Circumstances in which we will revoke your licence”, provides:
“(z) We have reasonable grounds to believe the role for which you have assigned a CoS is not genuine – for example, because it: · does not exist · is a sham (including but not limited to where the CoS contains an exaggerated or incorrect job description to deliberately make it appear to meet the requirements of the route you assigned it under when it does not); or · has been created mainly so the worker can apply for entry clearance or permission to stay”
[30]The Secretary of State’s Compliance Team visited Treal on 20 March 2024 to assess its suitability as a sponsor. Some five months later, on 21 August 2024, SSHD wrote to Treal suspending their sponsorship rights and asking for responses to various questions. The SSHD indicated that if satisfactory answers were received then the licence would be reinstated, but that if they were not then the licence would be revoked.[31]Treal made submissions in writing on 16 September 2024 (the “Response Letter”).[32]On 1 October 2024, the Secretary of State issued the Decision Letter. In it they communicated that they had considered the submissions but would revoke the sponsor licence. There was no right of appeal.[33]In the Decision Letter the SSHD confirmed that some concerns raised in the Suspension Letter had been adequately addressed. The SSHD also accepted in the Decision Letter a number of other facts put forward by Treal.[34]The Decision Letter also did not refer to number of matters that had been raised in the Suspension Letter. In other words, those were not matters which the SSHD had taken into consideration, or on which they wished to rely, in support of the Decision.[35]The specific reasons given by SSHD for the decision made were set out at paragraphs 56-59 of the Decision Letter. “General Sponsor Duties 1… “56. Your client has failed to address our original concern that they are offering Ms AYENI, Ms OLOSINMO and Ms LASHKAR the hours and salaries guaranteed on their CoS. Furthermore, the pay evidence confirms that your client is also deducting monies from their sponsored workers salary payments which are not detailed on their payslips. 57. Your client has failed to address this issue. 58.Annex C1 aa) of the Workers and Temporary Workers: guidance for sponsors (part 3) states we will revoke a licence if: You pay a sponsored worker less than you said you would on the worker’s CoS, and• you have not notified us of the change in salary; or• the reduction is not otherwise permitted by the Immigration Rules or the Workers and Temporary Workers: guidance for sponsors” General Sponsor Duties 2 59. Considering the above information, we are not satisfied that the role of Care Worker assigned to Ms AYENI, Ms OLOSINMO and Ms LASHKAR represent genuine vacancies within your client’s organisation and as such we believe the roles have been created to facilitate their entry to the UK”. You pay a sponsored worker less than you said you would on the worker’s CoS, and Workers and Temporary Workers: guidance for sponsors”

General Sponsor Duties 2

[36]Those paragraphs did not set out the period in relation to which SSHD had concluded that the hours and salaries guaranteed on the CoS were being offered. The detailed grounds of defence confirmed in paragraph 22 that the period considered by SSHD in the Decision Letter was May – August 2024 (inclusive), being the period for which payslips had been requested and provided.[37]The Decision was based on the SSHD assessment of the hours and salaries relating to the three named employees. It was important therefore to understand the factual situation regarding the pay and working hours of those three employees.[38]Unfortunately, the parties failed to provide the court with the list of agreed issues or the agreed chronology of events as required by PD54A 15.7. The relevant events and facts were dispersed throughout the witness statements, the claim and the defence. The absence of a list of agreed issues and events also required the court to weed out the issues that were no longer relevant. None of this was satisfactory.[39]I turn first to matters raised at various stages but which by the time of the hearing had fallen by the wayside.[40]There were references in the Decision Letter to P60s for prior working years. These references showed some confusion about those P60s. The Decision letter seemed to draw the conclusion that because the P60s did not show a full payment of £22,400 the employees had not been paid at the required annual rate. This ignored the fact that, as SSHD had been told, the workers only started employment on 10 February 2024. The employees plainly would not have been paid an entire annual salary for only working some eight weeks in the tax year ending 5 April 2024. The detailed grounds of defence made clear at paragraph 22 that SSHD no longer relied on the P60s as evidence of failure to pay the required annual salary.[41]This was not the only red herring. The Decision Letter, and indeed the skeleton argument provided for the substantive hearing, appeared to assert that the employees were at some points paid less than the minimum wage. They also asserted that at some points the employees were paid significantly more per hour than the expected hourly rate. For example, paragraph 2 of the skeleton asserted that “[SSHD] found [Treal] to be paying workers less than the National Minimum Wage”. This conclusion seemed to have been reached by taking the amount paid in a month, dividing it by the theoretical number of hours in a full working month and thereby calculating an hourly rate. This, of course, was based on a theoretical number of hours worked rather than actual hours worked. The payslips provided, however, clearly set out that at all times the employees were paid £11.90 for every hour they worked. The tables at paragraphs 24, 36 and 50 of the Decision Letter specifically recorded this. The witness statement of the decision maker also accepted this evidence. In other words, any variation in pay each month was due to a change in the number of hours worked rather than a highly fluctuating hourly rate. The SSHD did not pursue any meaningful argument at the hearing that the employees were ever paid an hourly rate which was less (or more) than shown on their payslips. Accordingly, I set aside any assertion that the evidence showed payments of less than (or indeed, more than) £11.90 per hour.[42]As set out above, the Decision Letter included reference to deductions made from pay of the employees. These deductions were subsequently explained by Treal as being for loans owed by those employees. The detailed grounds of defence made no reference to SSHD relying on the deductions from pay as being a reason justifying the Decision. The only documents relied on were the “payslips”, as set out in paragraphs 21 and 22. Accordingly, SSHD did not rely on deductions from pay as being a justification for the Decision.[43]Finally, the Suspension Letter and Decision Letter had raised questions about the dates on which the employees had started work. By the time of the hearing, these had been answered and were no longer in issue. Treal acknowledged that it had been late in providing some information, but it was not a matter relied on by SSHD as justifying the Decision.[44]In summary, by the time of the hearing SSHD relied solely on the assessment of the hours and pay of the three employees in the period May to August 2024 as being the valid basis for the Decision

The required hours and pay of the three employees

[45]The three employees each had an individual CoS. Those had different start and end dates but the material elements for the purposes of this application were the same:
“Job title: Care worker: 6145 Care workers and home carers …[based on 40 hour working week] Gross salary in pounds sterling (Skilled Worker only: excluding any allowances and guaranteed bonuses; all other routes: including any allowances and guaranteed bonuses): 22400.00 For: Year” …[based on 40 hour working week] For: Year”

…[based on 40 hour working week]

[46]In other words, the annual salary would be at least £22,400 and that was based on a 40 hour working week. These were not part time roles. The actual pay and hours of work Ms Ayeni

The actual pay and hours of work

[47]The monthly pay information provided by Treal in relation to Ms Ayeni, set out in the Decision Letter (at paragraph 24) and not challenged by SSHD, was: Pay Date Hours worked Hourly rate Gross salary 21 May 2024 160.84 £11.90 £1,914 24 June 2024 180 £11.90 £2,142 23 July 2024 121.75 £11.90 £1,448.83 23 August 2024 159 £11.90 £1,892.10 Total The bottom three rows have been calculated from the information in the rows above and were not included in the original table provided 621.59 £7,396.93 Average 155.40 £1,849.23 Annualised Calculated by taking the four month figures for May to August and multiplying by three for a twelve month period 1,846 £22,190[48]Paragraphs 25 and 26 set out the individual conclusion in relation to Ms Ayeni:
“25 Based on a 40 hour week, Ms Ayeni should be working 173.33 hours per month, with a minimum gross monthly salary of £1,982.93 26 Whilst the pay evidence for June meets the hours and salary guaranteed on the CoS your client is consistently failing to provide Ms Ayeni with her guaranteed hours”
[49]It is not clear how SSHD arrived at the calculation of the required monthly pay of £1,982.93. A person who is paid £1,982.33 for 12 months would be paid £23,795.16. The required annual amount is £22,400. That equates to a monthly rate of £1,866.67. There was no explanation of how SSHD calculated the £1,892.33 figure or why it was said to be correct.[50]The Response Letter said that “[Treal]…wish to draw the attention of the decision maker that during the period of May 2024 and July 2024, Ms Ayeni was on unpaid leave, thus the salary covering the month of May and July is less (reporting took place to reflect the same)”.[51]The Decision Letter recorded this evidence at paragraph 22. There is, however, no evidence in the Decision Letter that SSHD took this explanation into account in their assessment of the hours and pay.

Ms Olosinmo

[52]The monthly pay information provided by Treal in relation to Ms Olosinmo, set out in the Decision Letter (at paragraph 36) and not challenged by SSHD, was: Pay date Hours worked Hourly rate Gross pay 21 May 2024 105.38 £11.90 £1,254 24 June 2024 139.2 £11.90 £1,656.48 23 July 2024 202 £11.90 £2,024.14 23 August 2024 221 £11.90 £2,629.90 Total See footnote 1 667.5 £7,564.52 Average See footnote 1 166.9 £1,891.13 Annualised See footnote 2 2,002 £22,693.56[53]Treal explained in the Response Letter that Ms Olosinmo had undertaken training during the period March to July. SSHD quoted this at paragraph 35 of the Decision Letter: “We further confirm that since her start date on 10th February 2024, Ms Olosinmo has been working the hours stipulated on the CoS. For the period of 20th March 2024 until 19th July 2024, Ms Olosinmo weekly work was a combination of visits to the client’s premises and training due to the complex care she was placed in. We acknowledge that on this occasion, the Care Manager did not notify the payroll team of the hours she had taken training, hence her monthly gross salary between 20th March 2024 to 19th July 2024 was lower. Had the training hours been reported to the payroll team, Ms Olosinmo would have received the accurate gross monthly salary for the period in question. As such to rectify this error, we have paid in lump sum the salary amount due for the hours which formed part of training evidence of the same is provided in the format of wage slips and payments made to her account”.[54]SSHD did not dispute this, accepting at paragraph 39 “39. As previously noted, your client accepts the shortfall in salary which occurred between 20 March and 19 July and has addressed the underpayment in a lump sum payment to Ms OLOSINMO. 40. The month 6 payslip notes a gross payment of £1,788.94 for ‘Staff Training for March – June’.[55]The Decision Letter did not conclude that the payslips for May-August 2024 showed pay that was below the required annual rate. There were no paragraphs similar to paragraphs 25 and 26 of the Decision Letter which related to Ms Ayeni. In other words, the Decision Letter did not set out any month or other period in which SSHD concluded that Ms Ayeni had not been paid the required annual rate.[56]The only conclusion on Ms Olosinmo’s pay was in paragraph 56 of the Decision Letter which said:
“Your client has failed to address our original concern that they are offering Ms AYENI, Ms OLOSINMO and Ms LASHKAR the hours and salaries guaranteed on their CoS.”
. There was no explanation in the Decision Letter of how SSHD had concluded in that paragraph that Ms Olosinmo was being offered hours and salary below that required in the CoS.

Ms Lashkar

[57]It was common ground that Ms Lashkar was paid less than the required annualised amount in each month from May to August 2024. This was because she was on compassionate leave as she was providing care for her son who had serious medical issues. Ms Lashkar was therefore working part time and not full time in this period. Treal believed this entitled it to an exemption from the requirement to pay the amount required in the CoS.[58]In the Decision Letter, SSHD informed Treal that compassionate leave did not constitute a good reason for an employee not being paid the required rate. Treal subsequently paid Ms Lashkar an amount equal to the wages she would have received when she was not working due to unpaid compassionate leave. This was after the date of the Decision Letter.

Arguments

[59]A significant proportion of the hearing was taken up in argument as to the extent SSHD was entitled to consider monthly salary payments when assessing compliance with the CoS salary requirements. Treal, for example, argued that an employee would be paid be in compliance with their CoS if paid marginally less than the annual rate for one month but significantly above the annual rate for another 11 months. SSHD, on the other hand, argued that an employee could be unpaid for 11 months and then paid their entire salary in one month, and SSHD could validly conclude that the CoS requirement had not been met. Both arguments were, in principle, valid. It was, however, necessary to consider the actual facts in the case to assess whether SSHD had reached a conclusion, based on the evidence, that was open to them as to whether the monthly payments showed that the required annualised rate had not been paid. Treal argued, and SSHD did not dispute, that it was for SSHD to establish the allegation.[60]A number of other matters were not, in reality, in dispute. It was common ground that the Guidance applied and that SSHD was required to act in accordance with it. It was also common ground that SSHD was obliged to provide Treal with prior notice of the issues being raised, an opportunity to respond to those issues, and for SSHD properly to consider those responses before making the Decision.[61]The arguments between Treal and SSHD turned on the assessment of the extent to which SSHD had complied with those obligations in relation to each material aspect of the Decision Letter. I set out below in each relevant section the arguments and conclusions on those matters.

Analysis

[62]The Guidance is to be construed objectively. It says that an employer must pay the salary set out on the CoS. The Guidance refers to pay and not to hours worked, although there will clearly be a relationship between those metrics. Indeed, if the hourly rate of pay is constant, there will be a fixed and direct relationship between them.[63]As set out in Prestwick, it is for the SSHD to prove that there is a breach by Treal of the Guidance. The first step is to establish whether SSHD has shown that the relevant employees were not paid at the rate required by the CoS. If they were not paid at the required rate then the analysis turns to the process by which the Decision was made and the Decision itself.[64]The Guidance does not set out the period over which the SSHD should review a person’s pay when assessing whether the requirement has been met. The CoS, on the other hand, sets out an annual salary that the employee must earn.[65]The assessment is whether the employee is being paid the required annual rate. Neither the Guidance nor the CoS impose an obligation for the employee to be paid that annualised rate on each day of the year, nor in each week of the year, nor each month of the year. If that were the case, then a person would fall foul of the rules if they were paid for a seven day shift one week and a three day shift the next week, or took two weeks unpaid holiday in a particular month, or did not work five days in one week as it contained a bank holiday. That would be nonsensical.[66]The employees in this case had not worked for a full year when the compliance visit took place. There must therefore be some sort of assessment by the decision maker of pay over a period of time that is less than a year in order to assess whether the required annual salary is being paid.[67]The decision maker has a wide discretion in making their decision in each case, based on the specific facts. There was, in my judgment, nothing inherently unreasonable in the decision maker selecting, in this case, the four month period of May-August 2024 in which to assess compliance with the required annual pay rate. The decision maker, at various points, referred in addition to assessments being made for individual months. I address below the reasonableness of that in relation to each of the three individuals. In this case, it makes no difference to the outcome. I would have some doubt, however, that a decision maker could reasonably conclude that a person who is being paid at least the correct annualised salary when looked at over a four month period but who is below that level for a single month could be said to be paid less than the required annual rate.

Ms Ayeni

[68]As set out in paragraphs 47-51 above, the annualised pay rate that was shown by the payslips for Ms Ayeni over the period May-August 2024 was marginally below the required annualised salary. It was therefore open to the decision maker to conclude that Ms Ayeni was being paid less than the rate on her CoS. That does not necessarily mean that the decision maker was entitled, based on that marginal shortfall, to make the Decision. I do not, however, need to address that question for the reasons that now follow.[69]Ms Ayeni was on unpaid leave in May and July 2024. Treal had notified SSHD of this. The Decision Letter itself recorded that SSHD had been told this. The decision maker failed, however, to make an adjustment to the annualised pay rate assessed in May-August 2024 to reflect this known, and material, fact. The actual annual pay rate set out by the decision maker was only marginally below the required rate. An adjustment of less than 6 hours, or less than one working day at her hourly pay rate of £11.90, would have resulted in the pay exceeding the required rate. The pay for May-August was £7,396.93 being only £69.74 less than £7,466.67 (which is £22,400 annualised)[70]The conclusion in paragraph 56 of the Decision Letter that Ms Ayeni was underpaid is therefore fundamentally flawed because it is inadequately reasoned or irrational. It fails to take into account material facts which were known to the decision maker and were set out in the Decision Letter itself.[71]This was also a case, where on their own case, the decision maker was relying on the monthly evidence. The Decision Letter also asserted in relation to Ms Ayeni that “your client is failing consistently to provide Ms Aeyeni with her guaranteed hours”. There were only four months under review. For May, the decision maker failed to take into account the unpaid leave when assessing compliance. For June, the decision maker accepts that the pay was sufficient. For July, the decision maker failed to take into account the unpaid leave when assessing compliance. For August, the decisionmaker failed to correctly calculate the figures. The monthly pay of £1892.10 equates to an annual figure of £22,705 which exceeds the required £22,400 annualised salary. Consequently, even if the SSHD is right about reliance on monthly figures, then for Ms Ayeni, there is no month on which SSHD can show, having considered all the material evidence, that she was paid less than the required rate.[72]The Decision at paragraph 59 is consequently also flawed to the extent it relies on Ms Ayeni being one of the three employees who was underpaid.

Ms Olosinmo

[73]In the detailed section of the Decision Letter relating to Ms Olosinmo at paragraphs 29 to 41, SSHD did not set out any month or period in which SSHD had concluded that Ms Olosinmo had been paid less than the required rate. That is not surprising, because the evidence provided to SSHD showed that Ms Olosinmo had been paid the relevant annualised amount over the May-August period in which SSHD had assessed her pay.[74]SSHD asserted however at paragraph 59 that Ms Olosinmo had not worked the required hours and salary. That assertion was not one that the decision maker had reached in the Decision Letter when analysing Ms Olosinmo’s pay.[75]The Decision at paragraph 59 is therefore flawed to the extent it wrongly relies on Ms Olosinmo being one of the three employees who was underpaid. It is an irrational and inadequately reasoned conclusion to draw from the facts in front of the decision maker at the time and from the decision maker’s own conclusions.

Ms Lashkar

[76]It was common ground that Ms Lashkar was not paid the required annualised amount for May-August 2024. This was because Ms Lashkar was working on reduced hours to support her son as he underwent medical treatment.[77]Treal believed this entitled them to reduce her hours under the rules for permitted salary reduction exemptions. SSHD explained in the Decision Letter that compassionate leave did not entitle a reduction in the required annualised pay.[78]At the time of the Decision Letter, SSHD was therefore entitled to treat Ms Lashkar as not having been paid in accordance with the requirements in her CoS, notwithstanding the apparently honest mistake by Treal in doing this. It did not matter whether this assessment was done in relation to the whole four month period or in relation to individual months.

Validity of the conclusion in paragraph 56

[79]The Decision Letter states that the Decision was based on the conclusion that all three employees were underpaid and worked less hours than required by the CoS. There is nothing in the Decision Letter or the detailed grounds of defence to indicate that SSHD made the decision individually in relation to each of the employees being underpaid and working less hours. The Decision was made because all three were being paid less than required.[80]For the reasons set out above, the conclusions drawn in paragraph 56 in relation to Ms Ayeni and Ms Olosinmo were, however, not ones that the decision maker could rationally and properly make.[81]Treal argued that SSHD should have considered, and explained, whether failures relating to three employees in a CoS workforce of 75 justified a termination of the Sponsor licence. That argument is, of course, stronger when there is a breach in relation to only one such employee. In my judgment, if SSHD were intending to make a decision based on one employee from such a large group, in circumstances where the employer genuinely (but wrongly) believed that the pay requirement was reduced whilst an employee was on leave for medical reasons related to her child, then the decision maker would need to address the issue, provide an opportunity for the employer to respond, and explain the basis for the conclusion reached. The Decision Letter did not do so. Accordingly, in the absence of any such reasons in the Decision Letter I would have found the Decision flawed on that basis, in line with the Court of Appeal decision in Prestwick, even if the Decision was now said to be based on each individual breach of CoS rather than the collective breaches by three employees.

Genuine vacancy

[82]The Decision Letter stated at paragraph 64:
“As detailed above your client has failed to demonstrate that they are offering all of their sponsored workers the hours and in turn the salary guaranteed on their CoS, as such we continue to have concerns over the genuineness of the Care Worker roles within your client’s organisation.”
[83]Accordingly, it seems that the Secretary of State’s conclusion as to the genuine vacancy issue is based entirely on the conclusions on the salary issue. This is reinforced by paragraph 12 of the decision maker’s witness statement which confirmed that “the Compliance Officer did not raise any concerns about the duties the sponsored workers were undertaking as Care Workers”[84]The allegation that Ms Ayeni’s role was not a genuine vacancy was that she was not working the hours needed to generate the required annual salary. There was no allegation that she was being paid for hours that she had not genuinely worked. It is true that Ms Ayeni worked marginally fewer hours in the months assessed than the number of hours that, at her hourly rate, would have taken her pay above the annual rate. When her notified unpaid leave was removed from the working period being assessed, however, then she would inevitably be paid above the required annualised rate. It follows that her role, even on SSHD’s argument, was genuine.[85]I have already determined that Ms Olosinmo was in fact being paid at the rate required. There is, in my judgment, no rational basis on which it could be concluded that her role was not genuine.[86]The reason that Ms Lashkar’s pay fell below the required level was that she had been on unpaid compassionate leave. Treal had wrongly believed this entitled her to work at lower annualised pay than that in the CoS. There was no allegation that the role was not genuine when Ms Lashkar was working and being paid. There was also no allegation or conclusion that there would have been no work for Ms Lashkar to do if she had not been on compassionate leave. In essence, the vacancy was genuine when Ms Lashkar was available to work. There was no other basis put forward by SSHD to conclude that the vacancy for Ms Lashkar was not genuine.[87]It follows that SSHD had no evidence to conclude that any of these three vacancies were not genuine. That conclusion was one that was irrational and inadequately reasoned.[88]There was significant argument at the hearing about whether it was necessary to show that Treal had dishonest intent in order for SSHD to conclude that the vacancies were not genuine. The Decision Letter indicated that SSHD had concluded in the Suspension Letter that the “role…[of the three employees] had been created to facilitate their entry to the UK”. The Decision Letter apparently only based the conclusion on there being no “genuine vacancy” on the employees having allegedly worked less hours than on the CoS. It also referred to SSHD “continuing to have concerns regarding the genuineness of the vacancies”. It is unclear if SSHD was maintaining its argument that the vacancies were created to facilitate entry into the UK. There is a significant inconsistency between the wording of the sentence regarding “creation to facilitate entry” which, to my mind, carries a clear connotation of dishonest intent, and the stated reason in the Decision Letter on which the “genuine vacancy” conclusion was based.[89]I accept that the Decision Letter is a long letter and not written with legal precision. I do not consider, however, that it matters whether the sentence that the roles were “created to facilitate entry” was concluding that the Decision was based on dishonesty. If the sentence implied dishonesty, then SSHD could not have reached that conclusion on the evidence assessed. That would nullify the decision in line with the requirements for procedural fairness as in, for example, Balajigari and R (New Hope Care Ltd) v SSHD [2024] EWHC 1270 (Admin). On the other hand, if the language was looser than intended and the conclusion on there not being “genuine vacancies” was solely for underpayment due to fewer hours being worked than required, then for the reasons set out above that was a conclusion that was not reasonably open to the decision maker to reach.

S31(2A) Senior Courts Act 1981

[90]SSHD argued that even if the Decision falls to be quashed the court should not quash it because s31(2A) SCA 1981 requires the court uphold the decision. They argued that it was highly likely that the decision would be the same even if the errors had not been made.[91]The SSHD drew the court’s attention to Gathercole v Suffolk County Council[2021] PTSR 359 (CA) whereat §38, Coulson LJ said:
“38. It is important that a court faced with an application for judicial review does not shirk the obligation imposed by Section 31 (2A). The provision is designed to ensure that, even if there has been some flaw in the decision-making process which might render the decision unlawful, where the other circumstances mean that quashing the decision would be a waste of time and public money (because, even when adjustment was made for the error, it is highly likely that the same decision would be reached), the decision must not be quashed and the application should instead be rejected. The provision is designed to ensure that the judicial review process remains flexible and realistic.”
[92]There was no direct evidence from the defendant as to the decision that SSHD would have made if the errors made had not occurred. The SSHD invited the court to conclude, however, that the outcome would be highly likely not to have been substantially different for two reasons.[93]Firstly, SSHD said that the grounds of revocation were mandatory. Therefore, if they were established it follows that the decision would be to revoke the licence.[94]The claimant argued that the SSHD retained a residual discretion not to revoke the licence even if the grounds were mandatory. That is true, but it seems to me that if revocation is mandatory, it might be highly likely that revocation will occur, even if there is some possibility that a residual discretion will be exercised. The individual facts of each case will of course need to be considered when assessing this.[95]In this case, however, I have determined that the claimant has not committed the acts that bring the situation within the mandatory revocation framework. The SSHD argument on mandatory grounds therefore fails.[96]The second argument advanced by SSHD was that if Treal failed in relation to either the Salary Issue or the Genuine Vacancy Issue then s31(2A) would require the court to uphold the decision. Treal succeeded on both issues and therefore the court did not need to address this argument.[97]No grounds of exceptional public interest were raised.[98]SSHD’s argument on s31(2A) therefore fails.

Conclusion

[99]SSHD made an irrational and inadequately reasoned decision regarding the Salary Issue and the Genuine Vacancy Issue for the reasons set out above. The Decision is therefore unlawful and is to be quashed.[100]The parties should agree the form of order and consequential matters by 4pm on Tuesday 22 July 2025. If they have not done so, then the parties are to provide to the court by that time with a form of order indicating all matters that are agreed and those that are not agreed. The court will then give directions to resolve matters.

Cited in 3 later judgments