Making skilled workers redundant – key considerations

Whether due to a merger or takeover, changes in market conditions, or unexpected economic events, business needs are constantly changing and, at times, require making difficult redundancy decisions.

ACAS have reported that 1 in 5 employers are likely to make staff redundant. Large organisations, with over 250 employees, represented the largest proportion of this figure.

When a business is the holder of a sponsor licence, there are extra considerations to take into account when undertaking a redundancy process.

Can a business make a Skilled Worker redundant prior to the expiry of their work visa?

In short, yes. The Home Office does not impose a duty on employers to employ Skilled Workers for the full duration of their visas. Skilled Workers should be treated in the same way as resident workers when involved in a redundancy process.

Considerations to be taken into account by sponsor licence holders during the redundancy process

Beyond the important considerations in employment law which fall outside the scope of this article, if an employer has sponsored workers who are involved in a redundancy process, they must ensure compliance with their Home Office sponsorship and reporting duties.

Employers should consider the following:

Considering an alternative role

As part of the redundancy process the employer should consider whether redundancy could be avoided by offering the worker employment in an alternative role. The new role must be intended to fill a genuine vacancy. It must also be at the skill and salary level required by the Immigration Rules for sponsored roles.

If offered, the employer must consider whether the new role falls into a different Standard Occupation Classification code. If it does, then the worker will need to be issued with a new Certificate of Sponsorship (CoS) and they will need to apply to the Home Office to update their visa. Even if the new role is not in a different SOC code, if there are significant changes in the sponsored worker’s employment, such as a promotion, change in job title, change in core duties, a reduction in salary from the level stated on their original CoS and/or a change in the work location, then these changes must be reported to the Home Office via the Sponsor Management System. This report must be made within 10 working days of the change. If in doubt, advice from an immigration specialist should be sought.

Reporting the termination of employment

When sponsored employment is terminated, for example due to redundancy, the sponsoring employer has a duty to report termination of employment via the Sponsor Management System within 10 working days of the termination taking place. 

What happens if one of the key personnel is made redundant?

Sponsor licence holders must appoint office holders to three key roles. These are the Authorising Office, Key Contact and Level 1 user.

The business will only have one Authorising Office and one Key Contact. These may be the same person. If either one of these role holders is to be made redundant, they must be replaced by another suitable person from within the business.

The role holder must be based in the UK for the period they fill the role you have appointed them to, they must not have any unspent criminal convictions, and they must be a paid member of your staff or engaged by you as an ‘office holder’.You must replace the Authorising Officer and/or Key Contact before the existing role holder’s employment is terminated by redundancy. An application to replace either of these roles will be submitted by a Level 1 user, with the authority of the Authorising Office, by using the Sponsor Management System.

If a Level 1 user is to be made redundant, you should check how many Level 1 users are currently appointed to the licence. Level 1 users have access to the Sponsor Management System. The Authorising Officer and the Key Contact should always be Level 1 users. You may also appoint your representative as a Level 1 user and may wish to appoint one other person from within the organisation to hold this role. We recommend that you have sufficient to cover in the event of annual leave and illness but not so many Level 1 users that it becomes difficult to keep track of activity on the licence. If you decide that you need a new Level 1 user because one is being made redundant, you can appoint a new Level 1 user on the Sponsor Management System. You should be aware that it can take 6 – 8 weeks, or longer at times, for a Level 1 user appointment application to be processed by the Home Office. You must ensure that you do not end up in a position in which you have no Level 1 users as this would mean that there was no-one within the organisation who could access to the licence. This would be a serious compliance breach in the event of a Home Office audit.

Retaining documentation

Employers are required to retain copies of Right to Work checks for the duration of a worker’s employment and for 2 years after termination.

All other documents retained to satisfy a sponsoring employer’s Home Office record keeping duties in relation to sponsored workers should be kept until whichever is the earlier of:

• one year from the date on which sponsorship of the worker ends; or
• the date on which a compliance officer has examined and approved the documents, if this is less than one year after sponsorship ends.

Exceptions to the above time frames do apply and advice should be sought if in doubt.

What happens after a business reports the redundancy to the Home Office

After reporting the end of the sponsored employee’s employment to the Home Office, and once a Home Office caseworker has actioned the report, the relevant employee’s permission to live and work will ordinarily be curtailed to 60 days, unless they have less than 60 days left to run on their current visa.

To avoid this action and to remain in the UK beyond this point, the relevant employee would need to have submitted a further visa application to the Home Office. In most cases, where the individual has been offered work by another business licensed to sponsor migrant workers, this would be a change of employment application.

If the individual cannot find work before or during the 60-day curtailment window and is unable to submit any other type of application, they must leave the UK prior to the end of the 60-day period. Failure to do so would result in the individual becoming an overstayer and this could have long-term consequences on their UK immigration status, including the possible refusal of future visa applications.

What are the consequences of not taking the required actions?

Where a business has failed to comply with its sponsorship duties, including the duty to report important employment changes such as salary reductions and termination of employment, this can result in the downgrading of the sponsor licence, suspension of the licence or in the most serious circumstances, revocation of the licence.

Support from an experienced immigration specialist should be sought in any instance where a sponsor licence is at risk.

If you would like to discuss any of the issues raised in this article or would like to receive training on sponsorship and reporting duties, you can speak to one of our specialist immigration advisors at Freeths who can provide the advice and support you need.