Blue Inn Limited, R (on the application of) v Secretary of State for the Home Department

This is a claim for judicial review challenging a decision dated 15^th April 2025 to revoke a sponsor licence [“the decision”].

The Claimant is a limited liability company which was incorporated on 22^nd July 2014. It operates in the construction industry providing temporary and permanent staff on various projects. Mr Nallathamby Nathakumar was, at the time of the decision, one of the Directors of the company. He is now the only Director.

The Defendant is the Secretary of State for the Home Department who, so far as is relevant to this claim, grants, and can suspend or revoke, sponsor licences.

This claim relates to the Defendant’s sponsor licence system. It is necessary in this claim to set out a general summary of the system and the relevant part of the applicable Guidance before considering the factual background.

Immigration Rules made pursuant to powers set out in section 3(2) of the Immigration Act 1971 provide that the Defendant may grant leave to enter or remain to foreign nationals if they are sponsored by an employer and meet certain requirements. The Defendant is responsible for awarding licences to employers in relation to this sponsorship.

In general terms the sponsorship system seeks to ensure that those who benefit directly from migration (employers, education providers or other organisations who bring in overseas nationals) should play their part in ensuring the immigration system is robust and is not abused. Significant trust is therefore placed in the sponsors and they must ensure that they comply with immigration law and wider United Kingdom law, and further not behave in a manner that is not conducive to the wider public good. The sponsorship duties are therefore relatively onerous.

Following the granting of a sponsor licence a Certificate of Sponsorship [“CoS”] is issued by a licensed United Kingdom employer to individual migrants within the terms of their licence.

The Defendant has issued various iterations of the Workers and Temporary Workers: guidance for sponsors [“the Guidance”]. This is contained in various parts. It is non-statutory. Its vires and relevance was considered in detail in R (New London College Ltd) v Secretary of State for the Home Department [2013] 1 WLR 2358. Part 2 is entitled ‘Sponsor a worker – general information’ [“Part 2 Guidance”]. The chapters and annexes all start with the letter S for ‘sponsor’. Part 3 is entitled ‘Sponsor duties and compliance’ [“Part 3 Guidance”]. The chapters and annexes all start with the letter C for ‘compliance’. There is also a Part 4 Guidance which is entitled ‘Workers and Temporary Workers: guidance for sponsors Sponsor a Skilled Worker’ [”Part 4 Guidance]. The chapters and annexes for the Part 4 Guidance all start with the letters SK for ‘skilled’.

The versions of the Part 2 Guidance and Part 3 Guidance that were applicable at the time that the decision under review was made were those issued on 8^th April 2025. I was not made aware by the parties that the previous iteration, which would have been in force during the investigation, was to any material extent different and so I have not considered those. Whilst an alleged breach of the Part 4 Guidance was referred to in the suspension decision it did not form the basis of the decision to revoke the sponsor licence and although I refer to it below it is not of significance to my ultimate analysis or conclusions.

The relevant paragraphs of the Part 2 Guidance provide:

The Guiding Principles are set out in the Part 3 Guidance and are as follows:

The Part 3 Guidance, in so far as record-keeping duties, states:

Of importance to this claim is the definition of a ‘genuine vacancy’ and of which the Part 3 Guidance states:

Section C9 of the Part 3 Guidance addresses the Defendant’s decision making in relation to the suspension of a sponsor licence. The relevant paragraphs provide as follows:

Section C10 of the Part 3 Guidance addresses the circumstances in which the Defendant will or may revoke a sponsor licence. The relevant paragraphs provide:

Annex C1 (referred to above) of the Part 3 Guidance sets out the circumstances in which the Defendant will revoke a licence. Those are known as mandatory grounds of revocation. The relevant mandatory grounds of the Guidance for this claim set out in Annex C1 of the Part 3 Guidance and are as follows:

Paragraph SK11.25 of the Part 4 Guidance provides:

“Once you have assigned a CoS to a worker, you must tell us they fail to start their employment, are absent, without permission or there are any significant changes to the nature of their work or salary, or to your organisation. For full details of your reporting and other duties, see: Part 3: Sponsor Duties and compliance.”

Following an application made on 2^nd December 2021 the Defendant granted the Claimant a sponsor licence on 20^th January 2022 to enable it to sponsor skilled migrants. The licence permitted the Claimant to recruit and sponsor 32 workers.

Over two days on 30^th September 2024 and 1^st October 2024 the Defendant’s Compliance Team carried out an unannounced visit to the Claimant’s premises at 127c Fencepiece Road, Ilford, IG6 2LD. During the visits the Team interviewed Nallathamby Nathakumar. He told the Compliance Team that none of his sponsored workers worked more than 48 hours a week and that no worker had given written consent to opt out of the Working Time Regulations. The Team also interviewed two sponsored migrant workers. The first was Justin Mariseleen (CoS C2GR181625) and Dilukshan Sritharan (CoS C2G3G28210Q). They were both sponsored as civil engineers. They said that they were involved with projects for Modebest Builders Limited as well as 4D Structures Limited. Dilukshan Sritharan was assigned a CoS to work 45 hours a week on a yearly salary of £35,000. During the visit the Compliance Team were provided with his timesheets which showed that for the weeks commencing 12^th April, 19^th April, 26^th April and 3^rd May 2024 that he worked 51, 50, 51 and 55 hours respectively and that for all of the weeks between 17^th May and 26^th July 2024 and all weeks in August 2024 he had worked 50 hours a week. The Compliance Team also interviewed a support service technician (Sharujan Ramesh).

On 3^rd October 2024 the Claimant sent evidence to the Defendant that it was registered with the National Employment Savings Trust along with additional evidence. This included (a) a Sub-Contract Order dated 3^rd October 2024 which was signed on 8^th October 2024 with a commencement date of 18^th March 2024 which stated “Further to discussion between Blue Inn Ltd and CIDON Construction Ltd we are pleased to confirm the appointment of Blue Inn Ltd as our Domestic Subcontractor for the above works” and (b)a Sub-Contract Order dated 3^rd October 2024 and signed on 7^th October 2024 which stated “Further to discussion between Blue Inn Ltd and Modebest Builders Ltd we are pleased to confirm the appointment of Blue Inn Ltd as our Domestic Subcontractor for the above works .”

The Defendant contacted Modebest Builders Limited and CIDON Construction Limited by email to verify the agreements. The Managing Director of Modebest Builders Limited informed the Defendant that the Claimant was a labour agency and were not employed as a sub-contractor and did not appear on their sub-contractor ledger. CIDON Construction Limited informed the Defendant that the two engineers sponsored by the Claimant, worked for their company.

In addition the Defendant checked the status of Sharurajan Ramesh. He had first been assigned a CoS on 7^th May 2023 but was refused leave to enter on 13^th June 2023. He was then assigned a second and different CoS on 20^th July 2023 and was approved leave to enter on 2^nd August 2023. When he was interviewed by the Compliance Team about his role he stated that: “He uploads some documents when working at the office and when the engineers are busy and do not have the time, he uploads some documents onViewpoint. He travels to construction sites to collect soft copies of builtdocuments to submit on Viewpoint. and uses AutoCad, Word, Excel andAccess software.” On his two respective CoSs it stated that his duties were “To support and lead technical aspect of the company and civil engineeringprojects. civil engineering projects. Able to perform Word Processing, preparespreadsheets, manage databases, perform Internet and Electronic mailoperations, Install configure, operate and maintain operating systems andnetwork services, develop Graphics for web and print produce, analyse,design and develop information system. Able to visit/ work project across theUK. Good problem-solving ability and able to produce reports and site diary.”

On 27^th February 2025, the Defendant sent a lengthy (91 paragraphs) letter to the Claimant notifying them that a decision had been made to suspend their sponsor licence [“the suspension letter”]. The suspension letter set out the detail of a number of alleged contraventions of the duties of a sponsor. They included, but were not limited to, the following:

As already indicated those were not the only alleged breaches. However, it has been agreed between the parties that determination of the legality of the subsequent decision to revoke based on those three duties is dispositive of the claim. Therefore, although I have considered the totality of the evidence, this judgment will focus on those three duties and the lawfulness of the decision, in so far as those duties are concerned.

The Claimant was given 20 working days to submit representations and any evidence in response to the letter of 27^th February 2025. It is important to note that the suspension letter only referred to a requirement to provide a limited number of documents. It stated that the Defendant required (a) evidence from Sharujan Ramesh of work undertaken in line with his CoS (relevant to General Sponsor Duties 2) and (b) in respect of sponsored workers their HM Revenue & Customs P60 document for the previous financial year, last 3 months payslips and evidence that the last 3 months payments have been made into the sponsored worker’s personal bank account.

On 25^th March 2025 the Claimant’s solicitors sent a 14 page letter in response setting out representations with supporting documents (Annex A and Annex B). That documentation included material specifically requested in the suspension letter (see paragraph 25 above). The letter of 25^th March 2025 stated “In respect of the alleged allegations as per your letter of 27 February 2025, please find below the following initial representations. Our client has intentions to forward you furtherrepresentations in the next 21 days.”

Accompanying that letter was a letter dated 18^th March 2025 from Imogen Brooks the Human Resources Director of CIDON Construction Limited. The relevant part of which stated:

“I am writing to confirm the nature of our working relationship with Blue Inn Ltd in relation to the ICT Papermill and Forgemasters projects.

Blue Inn Ltd has been engaged by us as a sub-contractor for the delivery of engineering works on the project.

As an engineering sub-contractor, Blue Inn Ltd was appointed to deliver specific engineering services on-site. In this role, Blue Inn Ltd retained full responsibility for managing their engineers, including all day-to-day direction, control, and supervision of their activities. Blue Inn Ltd has the discretion to choose which individuals they employ to fulfil the specific tasks required for the subcontract, and they may assign different individuals to complete various aspects of the work. These decisions are made independently by Blue Inn Ltd without our direct involvement. These engineers are not our employees, and no employer-employee relationship exists between us and the individuals supplied by Blue Inn Ltd. The specific duties and responsibilities assigned to Blue Inn Ltd’s engineering team were in line with the terms of the project and their subcontract agreement, ensuring we maintained full accountability for the successful completion of the project as per the contractual requirements.”

A further document accompanying that letter was a letter dated 21^st March 2025 from Mark Lennox the Managing Director of Modebest Builders Limited. The relevant part of which stated:

“I am writing to you to confirm the nature of our working relationship with BlueInn Ltd in relation to the Merrick Place project at South Hall.

Blue Inn Ltd has been engaged by us in two distinct capacities: firstly, as asub contractor for the delivery of engineering works, and secondly, as alabour supply agency for additional staffing needs on the project.

As an engineering sub contractor, Blue Inn Ltd was appointed to deliverspecific engineering services on-site. In this role, Blue Inn Ltd retained fullresponsibility for managing their engineers, including all day-to-day direction,control, and supervision of their activities. Blue Inn Ltd has the discretion tochoose which individuals they employ to fulfil the specific tasks required forthe subcontract, and they may assign different individuals to completevarious aspects of the work. These decisions are made independently byBlue Inn Ltd without our direct involvement. These engineers are not ouremployees, and no employer-employee relationship exists between us andthe individuals supplied by Blue Inn Ltd. The specific duties and responsibilities assigned to Blue Inn Ltd’s engineering team were in line withthe terms of the project and their subcontract agreement, ensuring wemaintained full accountability for the successful completion of the project asper the contractual requirements.

In addition to their sub-contractor role, Blue Inn Ltd provided a range of labourers to assist in the project. These labourers were employed under a separate labour supply agreement, where they were directly integrated into our on-site team and worked under our management and supervision. This role was not one of “hiring out” workers to a third party, nor did it involve providing ongoing routine services to any other organization. The workers supplied were fully managed and controlled by our team, ensuring that the work performed was in direct support of the project’s goals and was fully aligned with the specific duties required of them

To streamline the administrative process, we agreed with Blue Inn Ltd to issue a single invoice for both their sub-contract work and labour supply services. Timesheets were used solely to confirm attendance and to ensure compliance with health and safety regulations. We did not verify or monitor the specific tasks or working hours of Blue Inn Ltd’s engineers, as this responsibility remained with their management”

In so far as the Sponsor Duties 1, 2 and 3 the Claimant’s letter of the 25^th March 2025 set out the following:

The decision, that is the subject matter of this claim, was set out in a lengthy letter dated 15^th April 2025 which revoked the Claimant’s Sponsor Licence. The grounds for revocation were said to be mandatory grounds set out in Annex C1(x), (z) and (aa) of the Part 3 Guidance (see paragraph 16 above).

The decision also identified a number of discretionary grounds for revocation under Annex C2(a), (b) and (g) of the Guidance. However, as I have already indicated it has been agreed between the parties that these matters are not dispositive of this claim and I do not need to decide them. I will not address them in any detail.

I will not set out all of the decision letter in this judgment. It is long and detailed and repeats much of the content of the suspension letter and the Claimant’s letter in response followed by its conclusion in respect of the individual General Duties and other matters. Instead I will confine myself to references to those matters germane to the content of this judgment.

On General Duties 1 the decision letter stated so far as is relevant:

“CIDON Construction

….

We would therefore expect that any documentation submitted to confirm the contractual relationship between two companies for the provision of services would include a specific end date for the provision of those services. As the documentation provided both to our compliance officer and with the submitted representations does not confirm an end date to the contract, we cannot be satisfied that your client’s sponsored workers are not undertaking an ongoing routine role for CIDON Construction.

We further note that both the letter and sub-contract orders submitted indicate that your client retains control for the control, management and supervision of the workers assigned to complete work for under the CIDON Construction contract. At the time of our compliance visit, your client stated in their interview with our compliance officer that Tharshikan Tharumanathan (C2G9K07753I) and Thirunathan Pradeepkumar (C2G1C67923P) were assigned to work with CIDON Construction.

Modebest Builders

…….

We note that the letter provided refers to a labour supply agreement which is stated to be separate from the agreement for the provision of sub-contracting services. However, no copy of this agreement has been provided in support of the submitted representations. As a result, we are unable to confirm that your client does have separate contractual arrangements in place for their sponsored workers than other workers. This is of significance as on 10 October 2024, following the signing of the sub-contract order previously provided to our compliance officer, Mr Lennox stated that your client was a labour agency and were not employed as a subcontractor.

We note that the letter from Mr Lennox notes that they used timesheets to confirm attendance and ensure compliance with health and safety regulations. This is consistent with the sub-contract order previously provided to our compliance officer which states: Modebest Builders Ltd also happy to confirm Blue Inn Ltd (sub contract staff) who on site via Blue Inn Ltd timesheet for Health and Safety purpose only. Modebest Builders Ltd will not verify working hours or number of break/ lengths they takes as this down to Blue Inn Ltd’s management.

No timesheets relating to your client’s sponsored workers have been provided with your representations for the period following the signing of the sub-contract order between Modebest Builders and your client. As such, we are unable to confirm if contemporaneous timesheets are submitted for this purpose.

However, the timesheets in the name of Sharujan Ramesh (C2G2S08236H) provided to our compliance officer for the period between the weeks ending 5 April 2024 and 27 September 2024 for their work with Modebest Builders all include the following declaration: I certify that the temporary worker has satisfactorily completed the total hours worked after any breaks taken and is due any expenses or other costs indicated above. I also agree to comply with the Terms & Conditions of Business detailed on Blue Inn’s website/ contract between Blue Inn Ltd & US and confirm that I am authorised to approve this timesheet for payment.

The declarations are signed and dated by Kukanathan Jathugulan, who signed the sub-contract order on behalf of Modebest Builders. The signing of timesheets with such a declaration is not consistent with your client having full control of the outcomes and outputs of their sponsored workers. No contractual documentation for the period prior to the signing of the sub-contract order in October 2024 has been provided. This means that we are unable to confirm whether the timesheets previously provided to our compliance officer contain a generic declaration or are instead reflective of a difference in the terms and conditions of the involvement of your client’s sponsored workers with Modebest Builders.

We further note that the sub-contract order relating to Modebest Builders has an anticipated duration of ‘TBC’. The letter provided by Mr Lennox does not confirm the expected end date of services to be provided by your client in relation to Merrick Place. As was the case in relation to CIDON Construction, we cannot be satisfied that your client’s sponsored workers are not undertaking an ongoing routine role for Modebest Builders.

In relation to the work completed by your client’s sponsored workers in relation to their contract with Modebest Builders, we acknowledge that you have submitted documentation which is stated to purport to work completed by Mr Ramesh. Whilst we have been able to confirm that this documentation relates to work at Merrick Place, we have only been able to definitively conclude that one document was completed by Mr Ramesh, a QA-235 form dated 11 March 2024, and none of the documentation provided confirms that Blue Inn Ltd was responsible for directing Mr Ramesh’s work. We also note that two forms with reference QA-218 dated 5 July 2024 and 23 January are on sheets with a Modebest Builders header. We will discuss this documentation further in General Sponsor Duties 2 below.

No documentation has been provided with your representations relating to any other sponsored workers completing work under the Modebest Builders contract. We would expect that if your client was responsible for assigning work under their contract with Modebest Builders, you would be able to provide documentation such as work assignments, or supervision records which confirms their control of the outcomes and outputs of the work completed under this contract. As you have been unable to provide this documentation, we are not satisfied that our concerns relating to this contract have been satisfied.

Other contracts

…..

We acknowledge that you have provided a copy of an email chain relating to communication between your client and Mark McGill of 4D Structures. On 7 March, your client emailed Mr McGill, stating: Hi Mark, As we discussed could you please confirm Dilukshan SRITHARAN’s hours on the timesheet include one hour (1Hr) break?’’

Mr McGill responded on the same date, ‘This is correct’. Whilst we acknowledge the submission of this documentation, you have provided no further documentation which confirms your client’s contractual arrangements with 4D Structures Ltd for the period prior to the signing of the appointment of sub-contractor document on 22 October 2024. We therefore cannot be satisfied that the contractual arrangements in place prior to this date were permitted under the published sponsor guidance.

In addition, upon further examination of the appointment of sub-contractor document, we note that in the Programme section, it is stated ‘Anticipated duration: 52wees and above.’ (sic) As with the agreements relating to CIDON Construction and Modebest Builders, the lack of a specified end date for the contract means that we cannot be satisfied that your client’s sponsored workers are not fulfilling an ongoing routine role for Modebest Builders.

Furthermore, no evidence of work has been provided in support of the submitted representations in relation to the sponsored workers who have been assigned to work on the contract for 4D Structures Ltd. We therefore cannot be satisfied that your client retains control of the sponsored workers as claimed in the submitted representations, or that their sponsored workers are filling a genuine vacancy.

We note that no further documentation relating to your client’s additional contracts has been provided with the submitted representations.

As a result of the above, we are not satisfied that our concerns in relation to this issue have been addressed.”

In so far as General Duties 1 the decision letter stated in respect of both Annex C1 (x) and (z) that: “Our concerns in this area have not been alleviated and as such this issue is maintained. Independent of other concerns contained within this letter, this issue alone is sufficient to revoke your client’s sponsor licence.”

On General Duties 2 the decision letter stated:

“We acknowledge that in support of your representations, you have provided a letter in the name of Mr Ramesh dated 18 March in which they state that they were interviewed on 24 April 2023 and that they submitted the requested documents on 2 May 2023.

We also acknowledge that you have resubmitted a copy of the interview notes for Mr Ramesh. We accept that this document shows that they were asked to provide clarificatory documents by email and that a note has been added to state, ‘Received on 2/5/2023’, and that your client was satisfied to proceed to offer Mr Ramesh their sponsored job role. We are therefore prepared to accept your statement that Mr Ramesh was assigned their CoS following the completion of the interview process.

However, to confirm that a sponsored worker is filling a genuine vacancy, as well as demonstrating that a worker has been recruited following the completion of a recruitment process, it must be shown that they are fulfilling the job duties specified on their CoS in addition to those specified under the Standard Occupational Classification (SOC) code for which they have been sponsored. Mr Ramesh was sponsored under SOC code 2136 Programmers and software development professionals.

Whilst we acknowledge your explanation that Mr Ramesh’s interview with our compliance officer confirmed that they perform tasks that are consistent with their job description, we are not satisfied that the documentation that has been provided demonstrates that they have been responsible for tasks listed on their job description such as the installation, configuration and management of operating systems, the development of graphics for web and print, or the management of databases.

We additionally note that there has been no evidence has been submitted to demonstrate that Mr Ramesh has completed tasks such as the undertaking of studies to determine your software needs or work to support other service users which are listed within the SOC code descriptor for SOC code 2136.

As a result of the above, we are not satisfied that it has been demonstrated that Mr Ramesh is performing the range of duties specified under their job description or the SOC code under which they have been sponsored. We are satisfied that this constitutes a breach of Annex C1 (z) of the Workers and Temporary Workers: guidance for sponsors (Part 3) as stated above.

Our concerns in this area have not been alleviated and as such this issue is maintained. Independent of other concerns contained within this letter, this issue alone is sufficient to revoke your client’s sponsor licence.

In relation to General Duties 3 the decision letter set out what the Defendant had been told about Dilukshan Srtiharan’s hours and what the timesheets stated about the hours that he had worked. The letter stated, “We are therefore prepared to accept your statement that clause 11 of the Code of Conduct forms a part of Mr D Sritharan’s contract, and that they have opted out of the 48 hour per week working limit set in the Working Time Regulations 1998.” The decision letter then stated:

“We note that in support of your representations, you have submitted a number of payslips in relation to Mr D Sritharan:

• December 2024: £1,988.65 monthly pay, £265.15 for Christmas Day and Boxing Day, £662.87 for annual leave (5 days), and £500.00 for overtime. Gross pay is £3,416.67 including overtime.

• January: £2,663.05 monthly pay, £253.62 annual leave (2 days). Gross pay is £2,916.67.

• February: £2,916.67 monthly pay.

We additionally acknowledge that you have submitted copies of transaction listings from your client’s business account confirming that they have been paid in line with the net pay stated on their payslips. We are therefore prepared to accept that Mr D Sritharan received a payment in December 2024 for overtime. However, Mr D Sritharan’s payslip does not confirm the number of hours or the rate at which they were paid overtime. No other documentation has been provided in support of the submitted representations to enable us to confirm the number of hours or the rate at which they were paid overtime.

We further acknowledge that you have provided a copy of an email chain relating to communication between your client and Mark McGill of 4D Structures. On 7 March, your client emailed Mr McGill, stating: Hi Mark, As we discussed could you please confirm Dilukshan SRITHARAN’s hours on the timesheet include one hour (1Hr) break?’’

Mr McGill responded on the same date, ‘This is correct’. However, upon further examination of the timesheets previously provided to our compliance officer for Mr D Sritharan, we note that they included the following declaration: I certify that the temporary worker has satisfactorily completed the total hours worked after any breaks taken and is due any expenses or other costs indicated below. I also agree to comply with the Terms & Conditions of Business detailed on Blue Inn’s website/ contract between Blue Inn Ltd & US and confirm that I am authorised to approve this timesheet for payment

There is therefore a contradiction between the statement on the timesheets previously provided and the email provided in support of your submitted representations. We therefore cannot be satisfied that the records relating to Mr D Sritharan are an accurate representation of the work that they have completed, and as a result, we cannot be satisfied that Mr D Sritharan has consistently received the hourly rate of pay specified on their CoS.

Annex C1 (aa) of the Workers and Temporary Workers: guidance for sponsors (Part 3) states: You pay a sponsored worker less than you said you would on the worker’s CoS, and:

• you have not notified us of the change in salary; or

• the reduction is not otherwise permitted by the Immigration Rules or the Workers and Temporary Workers: guidance for sponsors

Our concerns in this area have not been alleviated and as such this issue is maintained. Independent of other concerns contained within this letter, this issue alone is sufficient to revoke your client’s sponsor licence.”

Following the decision the Claimant sent a pre-action protocol letter to the Defendant on 30^th April 2025 and provided additional evidence when doing so. A further pre-action protocol letter was sent on 22^nd May 2025 and on 23^rd May 2025 the Defendant responded maintaining her decision to revoke the sponsor licence.

The claim was issued on 23^rd June 2025.

On 31^st July 2025, and having made an application for an extension of time in advance, the Defendant filed an Acknowledgment of Service and the summary grounds in opposition.

On 8^th August 2025 the Claimant filed a Reply to the Acknowledgment of Service.

On 29^th December 2025 permission was granted on the papers on all grounds by Mr Vikram Sachdeva KC, sitting as a Deputy High Court Judge and directions given for the substantive hearing of the claim.

On 2^nd February 2026 the Defendant served and filed Detailed Grounds of Defence.

The evidence in this case is voluminous and is contained in a hearing bundle that is 2894 pages long. There is also a 243 page core bundle and an authorities bundle.

In R v Secretary of State for the Home Department, Ex p Doody [1994] 1 AC 531 Lord Mustill provided a general summary of the requirements of procedural fairness based on a review of earlier authorities in the following way [page 560]:

“From them, I derive that (1) where an Act of Parliament confers an administrative power there is a presumption that it will be exercised in a manner which is fair in all the circumstances. (2) The standards of fairness are not immutable. They may change with the passage of time, both in the general and in their application to decisions of a particular type. (3) The principles of fairness are not to be applied by rote identically in every situation. What fairness demands is dependent on the context of the decision, and this is to be taken into account in all its aspects. (4) An essential feature of the context is the statute which creates the discretion, as regards both its language and the shape of the legal and administrative system within which the decision is taken. (5) Fairness will very often require that a person who may be adversely affected by the decision will have an opportunity to make representations on his own behalf either before the decision is taken with a view to producing a favourable result; or after it is taken, with a view to procuring its modification; or both. (6) Since the person affected usually cannot make worthwhile representations without knowing what factors may weigh against his interests fairness will very often require that he is informed of the gist of the case which he has to answer”.

Lord Neuberger PSC in Bank Mellat v HM Treasury (No 2) [2012] UKSC 39; [2014] AC 700 having referred to that passage from Ex p Doody, said [§179]:

“In my view, the rule is that, before a statutory power is exercised, anyperson who foreseeably would be significantly detrimentally affected bythe exercise should be given the opportunity to make representations inadvance, unless (i) the statutory provisions concerned expressly orimpliedly provide otherwise or (ii) the circumstances in which the poweris to be exercised would render it impossible, impractical or pointless to afford such an opportunity.”

These principles apply equally in the immigration context. In R (Balajigari) v Secretary of State for the Home Department [2019] 1 WLR 4647 the Court considered a number of appeals relating to decisions to refuse indefinite leave to remain on grounds of a dishonest discrepancy between the applicant’s actual earnings and the earnings declared to the Revenue. The Court of Appeal addressed the question of how the Secretary of State for the Home Department should proceed in a case involving an apparent dishonest discrepancy [§§42, 43]:

“…. A discrepancy between the earnings declared to HMRC and to the Home Office may justifiably give rise to a suspicion that it is the result of dishonesty but it does not by itself justify a conclusion to that effect. What it does is to call for an explanation. If an explanation once sought is not forthcoming, or is unconvincing, it may at that point be legitimate for the Secretary of State to infer dishonesty; but even in that case the position is not that there is a legal burden on the applicant to disprove dishonesty. The Secretary of State must simply decide, considering the discrepancy in the light of the explanation (or lack of it), whether he is satisfied that the applicant has been dishonest.

….. we consider . . . that the concept of standard of proof is not inappropriate in the present context. This is because what is being asserted by the Secretary of State is that an applicant for ILR has been dishonest. That is a serious allegation, carrying with it serious consequences. Accordingly . . . the Secretary of State must be satisfied that dishonesty has occurred, the standard of proof being the balance of probabilities but bearing in mind the serious nature of the allegation and the serious consequences which follow from such a finding of dishonesty.”

The Court went on [§§55 and 60]:

“…. we have come to the conclusion that where the Secretary of State is minded to refuse ILR on the basis of paragraph 322(5) on the basis of the applicant’s dishonesty, or other reprehensible conduct, he is required as a matter of procedural fairness to indicate clearly to the applicant that he has that suspicion; to give the applicant an opportunity to respond, both as regards the conduct itself and as regards any other reasons relied on as regards undesirability and the exercise of the second-stage assessment; and then to take that response into account before drawing the conclusion that there has been such conduct.

…….

This leads to the proposition that, unless the circumstances of a particular case make this impracticable, the ability to make representations only after a decision has been taken will usually be insufficient to satisfy the demands of common law procedural fairness. The rationale for this proposition lies in the underlying reasons for having procedural fairness in the first place. It is conducive to better decision-making because it ensures that the decision-maker is fully informed at a point when a decision is still at a formative stage. It also shows respect for the individual whose interests are affected, who will know that they have had the opportunity to influence a decision before it is made. Another rationale is no doubt that, if a decision has already been made, human nature being what it is, the decision-maker may unconsciously and in good faith tend to be defensive over the decision to which he or she has previously come.”

In Rex (Prestwick Care Ltd) v Secretary of State for the Home Department, Rex (Supporting Care Ltd) v Secretary of State for the Home Department [2025] EWCA Civ 184; [2025] 1 WLR 4761 the Court of Appeal specifically considered, amongst other matters, the compliance investigation process and discrepancies and procedural fairness. Baker LJ in giving the judgment of the Court stated [§§132 - 136]:

“Adapting the principles in paras 42—43 and 55 of Balajigari [2019] 1 WLR 4647 to the compliance investigation process, a discrepancy between the job description on a worker’s CoS and the role she is actually performing may justifiably give rise to a suspicion that the sponsor has deliberately (ie dishonestly) exaggerated her role in order to facilitate her stay in this country, but it does not by itself justify a conclusion to that effect. It may call for an explanation and, if not satisfied by that explanation, it may be legitimate for the SSHD to infer dishonesty and revoke the licence on that basis. But an allegation of dishonesty in this context imposes four particular requirements on the investigators.

First, as this court stated in Balajigari, dishonesty is a serious allegation carryingwith it serious consequences. It is for the SSHD to establish, on a balance of probabilities, that the sponsor acted dishonestly. There is no burden on the sponsor to prove that it did not.

Secondly, where the SSHD has a suspicion that a sponsor has acted dishonestly, she must indicate clearly to the sponsor that she has that suspicion so that the sponsor has a fair opportunity to respond.

Thirdly, having received the sponsor’s representations in response, the SSHD must consider all the circumstances before drawing the inference that the explanation for the discrepancy between the job description in the CoS and role actually being performed by the worker is that the sponsor has deliberately exaggerated her role in order to facilitate her stay in this country. If the SSHD has clearly indicated her suspicions in the suspension letter, the sponsor may put forward alternative explanations which the SSHD must consider with other relevant matters.

Fourth, if the SSHD draws the inference of dishonesty, she must set out her reasons in the revocation letter. There is no need for the reasons to be lengthy or legalistic. But a sponsor whose licence is being revoked because the SSHD has concluded it has acted dishonestly is entitled to know the reasons for that decision, notwithstanding that the decision is taken on her behalf by relatively junior staff.”

The Claimant’s claim is based upon seven grounds of judicial review. However it is only grounds 1 – 3 which I have to determine, for the reasons already referred to.

Ground 1 alleges that the Defendant’s conclusion as to General Sponsor Duties 1 that the Claimant is a labour agency and not a subcontractor (Annex C1(x) and (z) of the Part 3 Guidance) was unlawful in that it was vitiated by procedural unfairness, a failure to follow its own Guidance and a breach of legitimate expectation and arrived at inadequately reasoned and or irrational conclusions.

Ground 2 alleges that the Defendant’s conclusion as to General Sponsor Duties 2 that Mr Ramesh’s role was not a genuine one (Annex C1(z) of the Part 3 Guidance) was procedurally unfair in relation to the interview procedure and the conclusion was irrational.

Ground 3 alleges that the Defendant’s conclusion as to General Sponsor Duties 3 and the salary paid (Annex C1(aa) of the Part 3 Guidance ) was procedurally unfair and irrational.

The Claimant makes a number of interlinking submissions. They include the fact that verbal agreements with contractors are valid under English law and that the Claimant followed the Defendant’s advice by formalising those contracts in writing and then submitting them after the inspection but before the decision. This created a legitimate expectation that having done so they would not be regarded as being in breach of the Part 3 Guidance. Further that the letters from representatives of third party business such as Modebest Builders Limited and CIDON Construction Limited supported the Claimant’s sub-contractor role regarding migrant workers. Despite having those letters the Defendant never asked for the labour agency agreement, yet relied on its absence in making the decision. The Claimant contends that what in reality was being concluded but never suggested by the Defendant was dishonesty or other reprehensible conduct.

In addition the Claimant submits that the Defendant wrongly concluded that she could not determine if the Claimant retained control over workers on the Forgemaster’s project, despite CIDON Construction Limited’s letter confirming the Claimant’s full responsibility and accountability of its workers. Further that the use of ‘TBC’ for the end date of the work was not a matter that should have caused the Defendant any concern. These matters at the very least should have led the Defendant to make further enquires before making her decision. The failure to do so was irrational and procedurally unfair. The Claimant also submits that timesheets and supervisor details were provided and that the Defendant failed to request additional timesheets and only raised those concerns at the revocation stage and which again was procedurally unfair.

The Defendant contends that the concerns raised in the suspension letter indicated the Claimant was supplying routine labour and not delivering defined projects. Despite representations and letters from third parties, the overall position remained unclear when it should not have been. Therefore the Defendant could not be satisfied that the Claimant retained control over its sponsored workers. In particular the Claimant’s contract with Modebest Builders Limited, similar to that with CIDON Construction Limited, was inadequately addressed in its response, contributing to the decision to revoke the sponsorship licence. The Claimant was required to provide sufficient information to address the concerns raised by the Defendant and, in this instance, the Claimant had not done so. Overall the Defendant submits that there was nothing procedurally unfair in the approach taken and further that the decision was not irrational.

The Claimant’s submissions include the fact that the conclusion that Mr Ramesh’s role was not a genuine vacancy, because his interview responses did not match the duties listed on his CoS, was procedurally unfair. The employee was not asked specific questions about the discrepancies or given an opportunity to respond to them. Allied to that the interview lacked probing and clarification, and adverse matters were raised only in the revocation decision when they should have been raised before. If further clarity was needed, it should have been requested from the Claimant or through follow-up interviews. The Claimant submits that there is no evidence of sham arrangements, exaggeration, or any intent to mislead. The decision was therefore unlawful, irrational, and contrary to principles of procedural fairness. The Claimant contends that what in reality was being concluded but never suggested by the Defendant was dishonesty or other reprehensible conduct.

The Defendant submits that they did not and do not allege dishonesty or deliberate wrongdoing, rather she relies on insufficient documentation to show that the duties listed on the CoS were not performed. They submit that annex C1(z) is not limited to the examples set out in the Guidance and that, based on the evidence, it was open to the Defendant to conclude the Claimant breached the Guidance and to revoke the licence without an allegation of dishonesty.

The Claimant submits that the basis for revocation relating to overtime payments for Mr Sritharan and alleging contradictions between timesheets and email statements relies heavily on matters that were not asked for. In addition the clarification from Mr McGill was ignored. If further evidence was needed, the Defendant should have requested it and that doubts without such inquiry are procedurally unfair and irrational. The Claimant relies on the fact that similar issues for another employee (Mr Ramesh) were resolved satisfactorily, showing compliance and reinforcing procedural fairness obligations. The decision was therefore unlawful, irrational, and procedurally improper.

The Defendant submits that the concerns about Mr Sritharan working more than his contracted hours were raised and there was no evidence he was paid for the extra work. The Defendant submits that having identified a contradiction between timesheets and an email from Mr McGill that this led the Defendant to doubt the accuracy of records and compliance with pay obligations such that she was entitled to revoke the sponsor on that basis as well.

It is clear that the Defendant sought to and did undertake a detailed investigation of the Claimant’s compliance with their sponsorship licence. Further that the Defendant raised entirely legitimate concerns in that regard with the Claimant during and following the visit of the compliance team in 2024. On any view of the facts there were reasonable grounds at the stage of suspension to suspect that, inter alia, the mandatory grounds for revocation in the Part 3 Guidance referred to in the suspension letter might apply. However, suspicion is the start and not the end of the process even in this context and that is why the Claimant was given 20 days to answer those concerns. It should be noted that the request made by the Defendant for documentation from the Claimant was relatively limited despite the length of the suspension letter and the matters raised therein.

I acknowledge that the task of an investigation such as this is not straightforward. It is not a criminal investigation albeit that they have to consider actions and omissions which may approach or even amount to criminal offences. When interviewing individuals it may be necessary to probe but that has to be done in a way that is fair. Inevitably in some cases the investigation may require something of an iterative process but it must also be one upon which the Defendant can impose finality relatively swiftly. Each investigation will turn on its facts as to whether the provision of information and documentation from the sponsor is or is not sufficient and where it is insufficient whether procedural fairness requires any further request or investigation. That will be a highly fact sensitive question. In many cases it plainly will not require anything further. One important issue in this claim is whether procedural fairness did require more here or not.

Before turning to my analysis and conclusions in respect of the three grounds, there are some important and largely uncontroversial areas of principle as to the approach that I should take. They are derived in large measure from the principles set out by Haddon-Cave LJ in R (London St Andrew’s College) v Secretary of State for the Home Department [2018] EWCA Civ 2496 [§§29, 30] but focussed here to those which are relevant to this claim. They are:

There is an overlap between Ground 1 and 2 in that both require consideration of the mandatory basis for revocation in Annex C1(z) of the Part 3 Guidance namely that there is reasonable grounds to believe that the role for which a CoS was assigned was not genuine. I will deal with both grounds together in this judgment albeit that I have reached individual conclusions in respect of each of them. Ground 1 also involves consideration of the mandatory basis for revocation set out in Annex C1(x) – namely that the Claimant was acting as an employment agency and supplying a sponsored worker to a third party as labour.

There is one preliminary but important issue to address. In Prestwick the Court of Appeal proceeded on the basis that the particular breaches contended for in Annex C1(z) required a conclusion of dishonest or other reprehensible conduct. It did not specifically address whether that must always be the case. There are number of decisions of the Administrative Court where the issue of whether dishonesty is required for every revocation based on Annex C1(z) has been considered. However, it has not been definitively addressed at Court of Appeal level or above.

This issue was considered in detail though in R (on the application ofPrestige Social Care Services Ltd) v Secretary of State for the Home Department [2025] EWHC 2860 (Admin) in which His Honour Judge Tindall (sitting as a Judge of the High Court) having analysed and reviewed a number of authorities came to the following conclusions [§55]:

I have conducted the same analysis as Judge Tindall in Prestige Social Care and I agree with his general overall conclusions. I note that in Prestwick/SCL the phrase “deliberate wrongdoing” is also used alongside ‘dishonesty’, as is ‘other reprehensible conduct’. I do not think that anything turns on a distinction between ‘other reprehensible conduct’ and ‘deliberate wrongdoing’ and even if it did that it would not be relevant to this case. I accept that there could be cases where an allegation of dishonesty (or deliberate wrongdoing/other reprehensible conduct) is not part and parcel of the factual matrix for a decision to revoke on the basis of a non-genuine role. The issues for me to consider though are whether an allegation of dishonesty or deliberate wrongdoing was required in this claim given the Defendant’s concerns and, if not, then to analyse what the Defendant’s case is on that basis for revocation as a result.

Having considered the decision letter with care (and in the context of the developments after the suspension letter) I am driven to the conclusion that the Defendant was, in substance, alleging dishonesty in so far as this part of the decision is concerned. It is difficult to see how it could be otherwise, given the rejection of the letters provided by both Modebest Builders Limited and CIDON Construction Limited. These were third parties who were providing written support on headed notepaper for the fact that these were genuine vacancies. When those letters are considered carefully against the other documentation then this is not a case which could, on its facts, reasonably be based on mere incompetence or negligence.

It is not an answer, in my judgement, in this claim to disavow dishonesty (as the Defendant did in their Pre-Action Protocol Response) and at the hearing but also not set out in any coherent way what their case actually was and is on this in any detail or really at all. The reality of this case is that the Defendant had, in my judgement, to allege dishonesty or deliberate wrongdoing/other reprehensible conduct and she did not do so. I can well see how that may have been possible on the facts (given for example there was a similarity in some of the correspondence drafted by third parties and potential inconsistencies), but the Defendant did not do so and therefore applying the clear line of reasoning in Prestwick/SCL this ground must succeed on that basis alone.

However, even if I am wrong about this part of the basis for revocation being based on dishonesty and therefore assuming that the Defendant did not need to allege dishonesty/deliberate wrongdoing/other reprehensible conduct, it is clear that on the particular facts of this case that the Defendant acted in a procedurally unfair manner in so far as the Claimant was concerned. This again involves consideration of the approach taken by the Defendant to the letters provided by Modebest Builders Limited and CIDON Construction Limited. In my judgement there was on the particular facts of this case a failure to make important further inquiries.

I should make clear that in many, if not most, sponsor licence cases the Defendant will be in a position following a letter from the sponsor and any documentation responding to a suspension letter, to consider that material and make a decision without the need for any further inquiry. I am acutely conscious that going through a case with a toothcomb after the event it is often possible to identify something further and to allege that more could and should have been done but where the failure to do so would not come close to justifying a ground of procedural unfairness. Indeed in this area more than most the Defendant is entitled to require expeditious finality.

However, the problem here was that the Claimant provided letters from Modebest Builders Limited and from CIDON Construction Limited that ostensibly answered some of the Defendant’s concern. It addressed a previous important inconsistency and in a way that was capable of being accepted by the Defendant. Whilst the Defendant would have been entitled to reject those letters in my judgement she could only fairly do so, in these particular circumstances, having made further additional requests for the labour agency agreement and detail as to the Forgemasters project. She did not do so and that is a further basis to conclude that the Claimant has established Ground 1.

This failure cannot also now be disentangled from the Defendant’s conclusion about the terms of the agreements that the Claimant had entered into. Once procedural fairness required her to make the additional enquiries then the specific other matters in relation to timesheets and the agreements, and which are relevant to this aspect of the claim, themselves became necessary. The reality is that these other issues largely arose as a result of the iterative process that occurred in this particular investigation. Once procedural fairness required specific necessary steps then there was also no good reason not to request the additional documentation.

It is also in my judgement not possible now to disentangle the procedural unfairness in respect of Annex C1(z) from C1(x). If procedural fairness required more time and more documentation here then it applied equally to both bases for revocation under this aspect of the decision.

I can deal with one other aspect of ground 1 summarily. I am not satisfied that the Claimant has come close to making out its case on legitimate expectation on ground 1. However, given my other conclusions on this ground there is no need for me to address it in any further detail. Understandably this issue was not pursued in any detail at the hearing.

I also need to consider whether despite the procedural unfairness on ground 1 the same is true in relation to ground 2. I acknowledge and accept that the position here is more nuanced in terms of the decision making. However, in my judgement, the outcome is the same because I am satisfied that the Claimant has also established procedural unfairness on ground 2.

In coming to my conclusion I have considered the interview notes of Mr Ramesh. In my judgement there was no clear indication in the interview that he was suspected of any dishonesty or deliberate wrongdoing or other reprehensible conduct. In addition and importantly given the basis for concluding that the grounds for revocation were made out there were no questions asked of him as to whether he was involved in analysis and design. The position is made more difficult for the Defendant by the fact that Mr Ramesh provided a letter dated 18^th March 2025 which sought to address the concerns set out in the suspension letter. Mr Ramesh’s letter confirmed that his duties were consistent with his job description on CoS. On that basis it is again difficult to understand how it can be contended by the Defendant that she was not alleging dishonesty here in light of that letter. Either the letter was correct and there was a genuine role or there was no role and the letter was false or at best misleading. It follows that in my judgement the Defendant also failed to comply with the requirements set out in Prestwick/SCL and this ground is established. Again I should make clear that I can see how it could have been contended when all of the material was considered that there was reasonable grounds to believe that dishonesty or misleading conduct or other reprehensible had occurred, but this was not done by the Defendant.

Just as with ground 1, even if I am wrong about dishonesty etc there was also procedural unfairness here. Having conducted a light touch interview then in light of the letter of from Mr Ramesh the Defendant was on the particular facts required to do more than to discount what he was saying. That may have required a further meeting with him or with the Claimant or a request for documentation not previously requested. Just one of those would or may have been sufficient. But none of that was undertaken and therefore ground 2 succeeds on that basis as well.

Annex C1(aa) provides a mandatory ground for revocation of the sponsor licence if the employee is paid “less than you said you would on the worker’s CoS”. That wording is not complicated but it must be considered in its context.

The CoS required the Claimant to pay £35,000 to Mr Sritharan for working 48 hours a week. The Defendant in the decision letter stated that she was not “satisfied that Mr D Sritharan has consistently received the hourly rate of pay specified on the CoS” and this was grounds for revocation.

In Treal Care v Secretary of State for the Home Department [2025] EWHC 1797 (Admin); [2025] 4 WLR 89 the Court considered this particular ground for revocation and stated [§§64 – 66]:

“The Guidance does not set out the period over which the SSHD should review a person’s pay when assessing whether the requirement has been met. The CoS, on the other hand, sets out an annual salary that the employee must earn.

The assessment is whether the employee is being paid the required annual rate. Neither the Guidance nor the CoS impose an obligation for the employee to be paid that annualised rate on each day of the year, nor in each week of the year, nor each month of the year. If that were the case, then a person would fall foul of the rules if they were paid for a seven-day shift one week and a three-day shift the next week, or took two weeks unpaid holiday in a particular month, or did not work five days in one week as it contained a bank holiday. That would be nonsensical.

The employees in this case had not worked for a full year when the compliance visit took place. There must therefore be some sort of assessment by the decision maker of pay over a period of time that is less than a year in order to assess whether the required annual salary is being paid.”

I note that the judgment in Treal was handed down after the decision was made in this claim. That fact does not assist the Defendant here but it may explain the approach taken by the Defendant. The difficulty for the Defendant is that the CoS for Mr Sritharan did not state an hourly rate but instead an annual salary. The Defendant was also aware of the hours that he worked and so could make a calculation but it had to be one that was balanced. An employee may not work an identical number of hours every day.

The Claimant provided three months of payslips for Mr Sritharan as had been requested in the suspension letter. In addition the Claimant provided transaction listings establishing that payments matching those payslips were paid by the Defendant to Mr Sritharan, again as had been requested in the suspension letter. Mark McGill of 4D Structures provided confirmation on 7^th March 2025 that Mr Sritharan’s hours included a one hour break. This was of potential importance and would undermine revocation on the basis of Annex C1(aa). Despite that fact the Defendant placed reliance on a certification on the timesheets which stated that “I certify that the temporary worker has satisfactorily completed the total hours worked after any breaks taken and is due any expenses or other costs indicated below.” Whilst this statement is potentially ambiguous I accept that it was capable of being regarded as inconsistent with what Mark McGill had said.

The issue for me is whether that conclusion was irrational and/or whether the failure to make an additional inquiry or inquiries alongside the other inquiries that were fundamental (and which I have addressed in relation to the other grounds above) is also of such a nature that it was procedurally unfair. I have found this issue more difficult to determine than the other grounds and I regard it as finely balanced. However, having considered the specific circumstances of this claim I have concluded that if taken in isolation and standing alone then the failure to make the further inquiry could certainly not be regarded as irrational. However, that is not a total answer to this ground because it relies upon procedural fairness as well. Again I cannot disentangle this alleged procedural unfairness from the other more fundamental unfairnesses which I have already addressed. Those other matters required more to have been done and investigated. In my judgement this ground cannot fairly be considered in a vacuum. Accordingly I have concluded that the more limited procedural fairness failings here are still sufficient to make out this ground. In reality the constellation of overall procedural unfairness vitiates the fairness of the approach taken to this aspect of the claim.

In light of my conclusions on each of the first three grounds of judicial review it is necessary for me now to consider section 31(2A) of the Senior Courts Act 1981, as the Defendant relies on this provision.

Section 31(2A) of the Senior Courts Act 1981 provides:

As is clear from the judgment of the Court of Appeal in R (Bradbury) v Brecon Beacons National Park Authority [2025] EWCA Civ 489; [2025] 4 WLR 58 what is required when considering the application of section 31(2A) of the Senior Courts Act 1981 is an evaluation of the significance of the error(s) in the decision making process in order to ascertain if it was highly likely that it would not have been substantially different even if the decision maker had not made the error(s). Further that it is important to focus on the statutory test as opposed to short statements of principle taken from other authorities and which have been set out in some of the authorities but which were capable of misleading if there were devoid of any factual or legal context.

Applying the approach in Bradbury and specifically the statutory test to the facts of this case which involves a number of aspects of procedural unfairness in the decision making as a whole and which led to a decision based on inadequate material it is simply impossible for me to conclude that it is highly likely that the decision would not have been substantially different.

Accordingly the Defendant has not persuaded me that I should apply section 31(2A) of the Senior Courts Act 1981 to prevent the Claimant from obtaining the remedy that they seek.

For the reasons set out above I allow the claim for judicial review on grounds 1, 2 and 3. By agreement I will not deal with the remaining grounds. I invite the parties to draw up an order reflecting the terms of this judgment.

The decision of 15^th April 2025 will be quashed and the Defendant will have to remake her decision in a way that is procedurally fair and lawful. Whether that leads to the same decision or a different decision will be a matter for the Defendant to decide.