How Will a Merger Affect Your Sponsor Licence? Keeping Up With Compliance Duties

How a Merger Will Affect Sponsor Licence

Any kind of merger resulting in direct ownership, acquisition or organisational restructuring affects sponsor licence holders. This is an incredibly complex project, although most of the attention is on finances, taxes and stakeholders’ communication, immigration rules and compliance are often overlooked.

For instance, the employer will either have to report this merger to the Home Office (while respecting their strict deadlines) or apply for a completely new licence. The bottom line here is that the licence is not transferable.

Failure to comply with the implications and ensure compliance puts your company ownership at risk. Any issues with your licence could have you downgraded, suspended, or your valid sponsor licence revoked.

Notifying the Home Office

As a part of their licence compliance duty, sponsor licence holders are obliged to notify the Home Office of the changes to the company structure.

Reporting requirements include notifying the merger, partial takeover, or change of ownership via the Sponsorship Management System (SMS) within 20 working days. The change should be made by the appointed sponsor licence Level 1 user.

It is important to mention that the Home Office may request additional documentation as evidence.

Examples of Documents

The Home Office may request the following documents:

• Sale or purchase evidence (a letter from a practising solicitor, notary or affidavit that is signed by one of the partners or senior executives)
• Employment contracts (documents confirming that the employment application of sponsored worker is maintained and arrangements are unchanged)
• A certificated copy of the purchase agreement
• An original or certified copy of the TUPE agreement or contract referring to the employment of transferred sponsored workers
• A signed letter from the sponsor’s authorising officer assuming full responsibility for sponsored employees

What Effect Does a Restructure Have on Sponsored Migrants’ Leave?

Sponsored migrants that are involved in a merger, de-merger, or takeover are not obliged to submit a new visa application. Therefore, a new sponsor is not obliged to assign a new certificate of sponsorship.

The only exception is when the migrant changes jobs and does not have TUPE (Transfer of Undertakings Protection of Employment) or similar protection.

If the reports have not been submitted or a new sponsor licence application has not been made, their leave will be reduced to 60 days. It is important to highlight that a new licence also requires assigning a new certificate of sponsorship.

The Impact of TUPE

The Transfer of Undertakings Protection of Employees, otherwise known as TUPE, are a set of rules aimed at the protection of employment regulations when the company they work for is transferred to a new employer. This is provided that their role is not changed – they are simply transferred to a new company.

TUPE affects both the outgoing (making the transfer) and the incoming (taking on the transfer) employer.

When Does TUPE Apply?

Essentially, two types of transfers are protected by TUPE regulations. They are:

• Business transfers
• Service provision changes

Business Transfers

Business transfers include situations when one business moves from one employer to another. In order to be protected by the TUPE transfer, the employer’s identity must be changed.

Service Provision Changes

Service provision changes occur when:

• Services provided in-house are awarded by a contractor
• A contract ends and is forwarded to a new contractor
• A contract ends, and the work is transferred in-house by the former customer

What Happens When Workers Are Transferred Under TUPE?

According to TUPE, the acquiring company has a legal duty to transfer its employees under the same contractual terms and conditions. This includes sponsored migrant workers.

It means that the employees do not need to apply for a new work visa or have to request a certificate of sponsorship. This is all as long as:

• The new sponsor possesses a sponsor licence in the same route and accepts responsibility for workers.
• The duties of the sponsored workers do not change.

As for the first point, the sponsor will have to take full sponsorship responsibility for its workers, which is done through an SMS portal. The challenge that arises from this situation is that some businesses do not have a sponsor licence at all.

How Can Our Immigration Services Help You?

Immigration Advice Service (IAS) is a team of highly professional lawyers well-versed in immigration law. We are here to provide you with expert advice and help you get through your application process successfully.

No matter how complicated your immigration issue is, we can help. Our offices are located in all four corners of the UK, and our specialists are ready to tend to your needs.

You can get in touch with our team and seek legal advice.

You can call us on 0333 305 9375, or use our live chat.