Unrestricted Certificate of Sponsorship Allocation Renewals in the UK to Be Automated

by Morgan Lewis

The Home Office has introduced a new automated renewal of Tier 2 (General) and Tier 2 (Intra-Company Transfer) Certificate of Sponsorship annual allocations.

All Tier 2 unrestricted Certificate of Sponsorship allocations are subject to a fixed allocation period that runs from 6 April to 5 April the following year.

Currently, if a business holds a Tier 2 sponsor licence to assign Certificates of Sponsorship in Tier 2 General and/or Tier 2 Intra-Company Transfer categories, the business must manually request an allocation of unrestricted Certificates of Sponsorship up to three months in advance of the allocation expiry date on 5 April each year.

The Home Office will introduce a new automated renewal of this annual allocation request. In 2015, when the annual allocation request is renewed, sponsors will not need to prepare and submit an allocation request. Instead, sponsors will automatically be granted the same amount of certificates that they used in the previous allocation year.

Although the new process will not remove the requirement for sponsors to forecast the number of certificates they will require, the new process does not take into account that the sponsor may require more Certificates of Sponsorship in the following allocation year. If the sponsor subsequently requires more certificates during the next allocation year, it must submit an additional request for further certificates, and there are no guaranteed processing times. Sponsors will therefore need to plan ahead to ensure they request any additional certificates in good time.

New Prevention of Illegal Working Code of Practice

The Home Office will publish a new code of practice that provides guidance for employers on the civil penalty scheme relating to the prevention of illegal working. The guidance is due to be published in full on 16 May 2014. The main changes are highlighted below.

  • For those employees with limited leave to remain in the UK (i.e., an end date to their visa), employers will not be required to conduct document checks every 12 months following the initial right to work check at the commencement of employment. Instead, a follow-up check will be required at the time when the employee’s visa is due to expire.
  • The list of documents that employers can accept as evidence of an employee’s right to work in the UK (and to establish a statutory defence to a civil penalty for illegal working) has been further reduced. A list can be found here.
  • For students who have a Tier 4 visa and a limited right to work, employers will need to obtain additional evidence from the student’s school or university and set out their term time and vacation times covering the duration of their employment. This is in addition to holding copies of their passports and visas (and biometric permits).
  • Employers that acquire staff as a result of a Transfer of Undertakings (Protection of Employment) transfer (TUPE transfer) will be given 60 days during which to conduct the relevant right to work checks for employees acquired as a result of the transfer. This is an increase from the previous 28-day grace period.
  • The Home Office will introduce a revised method for calculating civil penalty levels. The penalty amount will depend on an employer’s history of compliance with right to work checks and whether it has met the mitigating factors (for example, whether the employer has reported the suspected illegal worker to the Home Office, whether it has actively cooperated with the Home Office, and whether it has an effective document-checking practice in place).
  • There will be an option for employers to pay a civil penalty by instalments.
  • There will also be a reduction of the civil penalty amount by 30% if the payment is received within 21 days of the civil penalty notice.

The new code, which will replace the 2008 version, will come into force on 16 May 2014 and will be supported by separate guidance and a code of practice on avoiding unlawful discrimination while preventing illegal working.

It is imperative that employers ensure that all employees provide the relevant documents evidencing their right to work in the UK prior to commencing their employment and have an effective reminder system in place to monitor the end dates of any visas.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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