Organisational change triggers sponsor compliance risks

The Home Office is ramping up its focus on immigration compliance. Unannounced compliance visits are on the rise, and enforcement action is becoming more common – with penalties that can include licence suspension or curtailment of worker visas. 

This stepped-up enforcement is particularly relevant in the context of organisational change. So, where employers are undergoing restructures, or making roles redundant, there’s often a direct impact on sponsored workers, and that’s where immigration obligations come into sharp focus. We’ll speak to an immigration expert about the risks and HRs role in minimising them.

This is a complex area. Employers have to think not just about fair redundancy processes and consultation duties, but also about how changes to jobs, hours or pay interact with sponsorship rules and what must be reported to the Home Office. If a sponsored worker’s job is made redundant, the employer must report it within 10 working days. The worker’s visa is then likely to be curtailed, giving them just 60 days to find a new sponsor or leave the UK.

If the job doesn’t go, but it changes significantly, that too can trigger reporting duties or even a requirement for a new visa.

And then there’s timing. Some sponsored workers may be close to settlement - a redundancy at that stage could disrupt their eligibility.

So, these are decisions HR needs to handle carefully, with one eye on employment law and the other on immigration compliance. So let’s consider that. Earlier, I caught up with immigration specialist Shara Pledger who joined me by video link from Manchester:

Shara Pledger: “We are going through a period of time in the UK where there is economic uncertainty in a lot of sectors and unfortunately it does mean that businesses are looking at possibly restructuring or reducing headcount or any of the similar solutions that exist to those kinds of pressures, and whenever that is the case, obviously it will have a direct impact on the workforce and if it is an organisation which is directly sponsoring its workers it's quite likely that some of those individuals will be affected.”

Joe Glavina: “So if a business is restructuring, how does that impact the employer’s sponsorship duties and what should HR be thinking about?”

Shara Pledger: “Well, when an individual is sponsored they have a Certificate of Sponsorship which is setting out very clearly what it is that person will do. Some of that's quite obvious in terms of things like what their job title is and the day-to-day duties, some of it you might not necessarily think about so immediately, such as the location where the individual will work or the number of contracted hours that they will have per week. So as soon as we enter into any kind of redundancy situation, or restructuring within a business, it's really important to think about whether there will be any changes that will impact a sponsored worker and perhaps update some of the information that was included on the Certificate of Sponsorship and, obviously, at its most extreme example that will be that the individual, unfortunately, will lose their position because it will no longer be tenable, but it may well be that the individual will remain in post, it's just that there will be some changes to their role, but that might also need to be either reported or a new application made.”

Joe Glavina: “Once a change is live, as I understand it, there’s a fairly tight window to act so HR needs to know what triggers a notification, a new visa, or a curtailment. Is that right?”

Shara Pledger: “Absolutely. This is treated just like any other change to a sponsored worker, so the deadlines are very short. If there is a fundamental change to the way that somebody will be working, to the details on their Certificate of Sponsorship or, indeed, to whether they will be employed at all, the Home Office needs to be informed about that within 10 working days of the change having taken place. Now, obviously if we're talking about a redundancy situation, that's obviously quite a long process that a business is ordinarily going through and it will most likely be the case that reports aren't going to be needed until the very end of that process, but it does need to be thought about throughout the process because it's very important that both employer and employee understands whether, and how, a change is going to impact the status.”

Joe Glavina: “And what are the consequences if the employer gets this wrong and fails to report a change?”

Shara Pledger: “Well, keeping up to date in terms of sponsored workers is one of the core elements of sponsor compliance. So if there are changes to the way that a skilled worker is performing their role, or there are changes to that role to be performed, and the Home Office is not kept updated about this, it will be the case that it's almost certainly a serious compliance breach on the part of the sponsor. So it’s really important not just that an employee understands the impact for their personal status if something is going to change, but also that the employer has a good level of understanding of what it means in terms of their sponsor duties and their obligations to keep the Home Office updated.”

Joe Glavina: “It sounds like communication is really important in these situations. What are the concerns which might be raised with HR?”

Shara Pledger: “Yes, there are common themes that individuals will often have questions about when it comes to these types of situations. Some of them are very obvious as you'd imagine. Things like, will my status be affected? Am I going to lose the right to work in the UK? But there are also issues that surround things like what happens to the right to work of my family members and, you know, I'm coming up towards the period of time where I might be able to consider indefinite leave to remain so does redundancy impact that? All of these things can be dealt with quite easily in terms of being able to explain the issues and making sure that people have the correct information that they need and information is really key whenever you enter this kind of process as an organisation or, indeed, as an employee because you need to understand exactly what the implications are going to be for yourself, your family, for the long-term time to stay in the UK. So what training sessions and discussion sessions can really help with is just making sure that all of those issues are aired and everybody's questions are answered.”

Joe Glavina: “Finally, Shara, when it comes to redundancy selection HR will know about the risks around an unfair process and the risk of discrimination claims. Does that risk apply to sponsored workers?” 

Shara Pledger: “Yes. One of the common themes that we will often be asked about by clients is whether they should be treating a sponsored worker differently to a resident British worker, or a non-sponsored other employee when it comes to things like selection for redundancy, etcetera. It’s really important that that doesn't happen. Even though there are perhaps more wide-reaching implications for a sponsored worker if they lose their position because they will, of course, in theory also lose their right to work and their right to reside in the UK, that should never be the basis on which redundancy decisions are made. There is obviously a very strict framework that an organisation will need to adopt in order to make sure that they run their redundancy procedure fairly and correctly, and somebody's immigration status is never going to be part of that and should never properly be considered as one of the reasons why somebody may, or may not, be selected for redundancy."

If your business is going through organisational change and you are affected by any of those issues then please do contact Shara – her details are on the screen for you. Alternatively, you can contact your usual Pinsent Masons adviser.