Sponsor pay shortfalls need rounded assessment, Court of Appeal rules

A sponsor that pays uneven-hours migrant workers less than the annual figure on their certificates of sponsorship in a single month is not automatically in breach of the sponsor guidance.Nationalarchives The Court of Appeal dismissed the Home Secretary's appeal against the quashing of the revocation of Treal Care (UK) Ltd's sponsor licenceNationalarchives, holding that Annex C1 ground (aa) calls for a rounded assessment over a period that bears a fair relationship to the period stated on the certificateNationalarchives, and that even mandatory revocation grounds leave the Secretary of State a residual discretionNationalarchives.

Treal Care supplies care staff to the NHS, local authorities and care groups. Its A-rated licence, granted in December 2021 for 75 workers, was suspended in August 2024 and revoked on 1 October 2024 on two groundsNationalarchives: three care workers had not been paid the £22,400 annual salary stated on their certificatesNationalarchives, and their roles were said not to be genuine vacanciesNationalarchives. The Administrative Court quashed the revocation in July 2025Nationalarchives, the genuine-vacancy allegation having collapsed with the pay allegationNationalarchives, and the licence has remained in place pending appeal.

The central question was how to measure compliance with an annual salary promise for workers on uneven hours. The court rejected the argument that a sponsor must pay at least one-twelfth of the annual figure every month, report any monthly dip and face revocation for an unreported one.Nationalarchives No such monthly rule exists in the schemeNationalarchives: it would turn a seven-day week followed by a three-day week, unpaid holiday or a bank-holiday week into a breach, and it sits uneasily with certificates statable by hour, day, week, month or year, with contemplated unpaid absences, and with the Rules' express 17-week assessment cycle for uneven-hours patterns. Looking at individual months is appropriateNationalarchives, but a conclusion must rest on all the available information and cannot fairly be based on a single month when the wider picture differsNationalarchives. Where a shortfall appears, the normal course is to seek an explanation, offer a chance to remedy it, and then decide in the round.Nationalarchives

Nor does a mandatory revocation ground remove discretionNationalarchives. A policy under which any mathematical underpayment compels revocation, however trivial or unfair, would unlawfully fetter decision-making and make the invitation to explain or remedy pointlessNationalarchives. The court confirmed the residual discretion recognised in Prestwick to take account of the effect of revocation on the business, its employees and care recipients.Nationalarchives

Applied to the three workers, assessed over the accepted four-month sample of May to August 2024Nationalarchives, the findings on two of them were irrationalNationalarchives: Ms A's pay annualised marginally below £22,400Nationalarchives but the decision ignored her known unpaid leave and used an unexplained monthly requirement, while Ms O's pay annualised above the figure after a lump-sum correction for unnotified training hours made before the decisionNationalarchives, with no underpaid month ever identified. Ms L was admittedly underpaid while caring for her seriously ill sonNationalarchives, paid up only afterwards, but the decision had rested on all three workers plus an implied — since abandonedNationalarchives — dishonesty allegationNationalarchives. That single compassionate case could not sustain revocation on its ownNationalarchives, and the court could not say the outcome would highly likely have been the sameNationalarchives, so section 31(2A) could not rescue the decisionNationalarchives.

Legal basis: Workers and Temporary Workers guidance for sponsors (Part 2 S4.14, S4.16, S4.19–S4.31; Part 3 C1.4–C1.7, C10.5, Annex C1(aa) and (z), C2(a)), Appendix Skilled Worker SW14.3A, Senior Courts Act 1981 s31(2A), and Mandalia, Lumba, Prestwick and Gathercole on policy meaning, fettering and the highly-likely test.