IT / Engineering Service Providers
When a sponsored worker is supplied to another organisation to deliver a contract between the sponsor and that organisation, the sponsor must have full responsibility for the duties, functions and outcomes, or outputs of the job carried out by the sponsored worker.
An example is where company A has a contract with a client – company B – to deliver an IT/Engineering solution within agreed timescales. An applicant, who is sponsored by company A to work on that project, may be sent to work for the length of the contract at company B’s premises, but they remain employed by company A throughout the period of the contract.
As company A is fully responsible for their duties, functions, outputs or outcomes, company A must be the applicant’s sponsor.
A sponsor can only assign a certificate of sponsorship (CoS) if they have full responsibility for deciding the duties, functions and outcomes or outputs of the job.
Where the sponsored worker is carrying out work for a third party on their sponsor’s behalf, they must be contracted by their sponsor to provide a time-bound service or project on their sponsor’s behalf – ie a service / project with a specific end date – the service / project cannot be operated past that date by the sponsor or anyone else.
A sponsored worker must not be:
- an agency worker, hired to a third party to fill a position with them, whether temporary or permanent, regardless of any contract between the sponsor and any employment agency or employment business
- contracted to undertake an ongoing routine role or to provide an ongoing routine service for the third party, regardless of the length of any contract between the sponsor and another party
The principle that the provision of staff under the Tier 2 route is strictly prohibited was highlighted in Datamatics UK Ltd v Secretary of State for the Home Department, Court of Appeal – Administrative Court, July 19, 2016,  EWHC 1780 (Admin)
Datamatics UK Ltd (Datamatics) held licences under Tiers 2 and 5 of the Points Based Sponsor Guidance, which allowed them to sponsor non-EEA nationals to work in the UK.
During a UKVI compliance visit at Datamatics’ premises, Mr Ghandi, the director of the company, and four employees to whom Datamatics had issued Certificates of Sponsorship (CoS) were interviewed.
The following are excerpts from the interview of one of the sponsored workers:
“Q. Where will you be working?
A. The company has many clients. I am having interviews with clients. Whoever clear [sic] me I’ll work for them.
Q. Who will direct duties at client site?
A. The client will direct the duties.
Q. How do you find work?
A. Contacts are given by the company (Datamatics)
Who approaches the client?
A. Contacts only by the company. We consultants approach the client directly.
Q. What happens when you find the work?
A. I will work for the company at the client site and be paid by Datamatics.
Q. What work are you doing atm?
A. Updating skills, attending interviews, meeting clients.
The following are excerpts from the interview with Dalmatics director:
“Q. Why does our data say that all employees including ICTs work here at 15 College rd?
A. Our staff work at other sites on a short-term basis. They move around a lot.
Q. How do you send your consultants to 3rd parties?
A. Some clients ask for job roles, some ask for projects to be completed others just ask for staff numbers to be sent.”
Based on the information gathered in the interviews and after reviewing copies of Datamatics’ contracts with clients, the Home Office concluded that Datamatics’ was in breach of the rules by:
- operating as an employment agency/business and supplying migrants that the company was sponsoring to third parties as labour;
- assigning a CoS for a role that was not genuine and providing false information in this respect; and
- breaching its sponsor duties by making a number of failures to report in respect of specific sponsored workers.
Datamatics’ sponsor licence was suspended with immediate effect. Datamtacis subsequently made representations, including stating there was a misunderstanding, although admitting they had made errors in reporting. The Home Office eventually revoked Datamatics’ Tier 2 sponsor licence and Datamatics applied for judicial review.
The High Court’s Decision
Datamatics failed to convince the Court that the test of who is an agency worker under the Sponsorship Guidance is the same as the test under regulation 3 of the Agency Worker Regulations 2010.
The Court concluded that the Defendant’s decision that there was a breach of the Sponsor Guidance was lawful. Based on the evidence before it and the lack of evidence that Mr Ghosh would be working on specific projects under the control of Datamatics, the Defendant’s conclusions ‘were in no way unreasonable and entirely justified‘.
The Court also rejected the argument that the Sponsorship Guidance is in breach of section 55 of the Borders, Citizenship and Immigration Act 2009 for failing to impose a duty on the Defendant to consider the effects of a decision on children. The Court stated that section 55 is an overarching duty and there would be limited circumstances where this issue would arise in the context of the Sponsorship Guidance and the impacts or effects of a decision on children were not brought to the Defendant’s attention by Datamatics in its representations.
The High Court therefore dismissed Datamatics’ claim.
Employers with sponsor licences should ensure compliance with the Sponsor Guidance. The sponsor must be whoever has full responsibility for the duties, function and outcomes or outputs of the job.
Any job offered to a Tier 2 migrant must exist and be genuine when the Tier 2 Sponsor assigns a CoS for that job. Falsifying information is also a breach of the Sponsor Guidance which can lead to the revocation of a licence.
Again, this highlights provision of staff is not allowed and that the rules do not offer room to manoeuvre.
Although you have confirmed on many occasions that Onward provided engineering services and not engineering staff, it is not always clear from the agreements you have in place with some of your clients.