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Restructuring a business? Immigration matters you may need to consider.

When a business is undergoing a restructure involving another business entity, for instance by way of a merger, de-merger, full or partial takeover, it is important to establish whether any of the businesses involved in the restructure hold a Home Office Sponsor Licence.

A Sponsor Licence is essentially the authorisation given by the Home Office to any UK business that employs, or wishes to employ, non-EU nationals in skilled jobs that cannot be filled from the UK labour market.

In granting one of these licences, the Home Office confers on the Sponsor Licence holder the responsibility to ensure that the skilled worker observes the conditions of their visa, principally through performing the job they were employed to do; at the designated workplace and by reporting to the Home Office any significant changes to the job in question.  The Sponsor Licence holder should also report any non-compliance by the skilled worker of the terms of their employment, especially instances of non-attendance.

In circumstances where a restructure of the type referred to above is contemplated, the business, or businesses, involved should consider at the outset the personnel who are likely to be affected by the restructure and any immigration law issues that may need to be taken into consideration.

In respect of mergers, de-mergers, full or partial takeovers, the Home Office has published helpful guidance on how they should be approached from an immigration perspective. The guidance is too comprehensive to be included here, but for the purposes of this note the points below are key.

The business should ensure:

  • The Home Office is notified within strict timeframes of the proposed changes to the business;
  • The details of the sponsored workers that are moving from, for instance, Company A to Company B;
  • That new sponsor licences are applied for where required (as sponsor licences cannot be transferred from one business to another) and
  • That written declarations are made confirming that full responsibility will be taken by the Company receiving the sponsored workers and provide certain prescribed, supporting evidence.

If you believe your business is, or might be, affected by any of the matters raised above, please contact Mariam Khaliq, Head of Immigration at mkhaliq@bishopandsewell.co.uk to discuss further.  The consequences of failing to comply with the requirements of UK immigration law are extremely serious and could result in the business having their Sponsor Licence revoked and being fined up to £20,000 per worker. It is therefore vitally important to obtain the correct advice to avoid such consequences.

Finally, we stated above that UK businesses need to obtain a Sponsor Licence if they employ, or wish to employ, non-EU nationals. However, now that the United Kingdom has left the EU and the transition period with the EU is ending on 31 December 2020, the British government is implementing a new immigration system. Under the new system (which will take effect from 1 January 2021) businesses wishing to employ both EU and non-EU nationals in skilled jobs will need to obtain a Sponsor Licence.

We anticipate that there will be a spike in the number of applications for Sponsor Licences from UK businesses in anticipation of the new system and so we have been urging businesses to apply for a licence as soon as possible. Sponsor Licences are valid for four years and so even if the business does not have any immediate, or even short term, need to recruit overseas workers, it might be considered prudent to have a licence in place to avoid the bureaucratic challenge of obtaining one when they have identified a candidate they wish to employ.

Immigration Matters Legal Team

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