The Court of Appeal has clarified the limits of procedural fairness in Home Office decisions to revoke skilled-worker sponsor licences, ruling that an employer was not entitled to make representations before revocation based on an undisputed breach involving a close relative.
What was the dispute about?
In R (on the application of TJ Trading Express Limited) v Secretary of State for the Home Department [2026] EWCA Civ 1368, the Court of Appeal considered the Home Secretary’s decision to revoke the company’s skilled-worker sponsor licence and the procedural safeguards required before such action is taken.
TJ Trading operates a petrol station and an attached convenience shop. It obtained a skilled-worker sponsor licence in September 2022. In November 2023, the company’s director and level 1 Sponsorship Management System user assigned a Certificate of Sponsorship (CoS) to a worker for a role described as “Petrol Station Manager”.
The Home Office’s records showed that the worker was the brother of the director’s wife. The family relationship had not been disclosed by adding the required sponsor note to the Certificate of Sponsorship. Following this discovery, the Home Office revoked the company’s sponsor licence by a decision dated 6 March 2024.
TJ Trading challenged the decision by judicial review. The High Court upheld the challenge and quashed the revocation decision. The Secretary of State appealed to the Court of Appeal.
Why was the sponsor licence revoked?
The Home Office relied on two grounds in Annex C1 of Part 3 of its Workers and Temporary Workers: guidance for sponsors.
- Ground C1(o): This applies where a Sponsorship Management System user assigns a Certificate of Sponsorship to their own close relative or partner without the required exception being met. The definition expressly includes a brother-in-law.
- Ground C1(z): This applies where there are reasonable grounds to believe that the role for which a Certificate of Sponsorship has been assigned is not genuine, including where it has been created mainly to facilitate a worker’s entry to or stay in the UK.
The revocation letter treated each ground as independently sufficient to revoke the licence. It stated that the “Petrol Station Manager” role had been created solely to facilitate the worker’s entry to or stay in the UK. It also said that the family-member assignment issue alone was sufficient for revocation.
At first instance, the High Court upheld TJ Trading’s challenge on two bases. It found that the company should have been given an opportunity to make representations in relation to ground C1(o), and that the Home Office had not adequately reasoned its conclusion under ground C1(z) that the vacancy was not genuine.
- TJ Trading was granted its skilled-worker sponsor licence.
- The company assigned a Certificate of Sponsorship for the Petrol Station Manager role to the director’s brother-in-law.
- The Home Office revoked TJ Trading’s sponsor licence.
- The High Court judgment in the judicial review challenge was given.
- The Court of Appeal heard the Secretary of State’s appeal.
- The Court of Appeal handed down its approved judgment.
What did the Court of Appeal say about procedural fairness?
Lord Justice Arnold, giving the leading judgment, emphasised that the requirements of procedural fairness depend on the context. The court rejected the argument that a person affected by every administrative decision must invariably be given an opportunity to make representations beforehand.
The court considered the nature of the sponsorship scheme, the relevant guidance and the particular breach. A sponsor licence is described in the guidance as a privilege rather than a right, and participation carries responsibilities that employers are expected to discharge with rigour and vigilance.
Ground C1(o) was a clear, hard-edged requirement concerning the assignment of a Certificate of Sponsorship to a close relative. The breach in this case was undisputed. Importantly, the court distinguished this ground from allegations that necessarily involve dishonesty or other reprehensible conduct: a breach of C1(o) may result from ignorance or carelessness.
The court also considered what the company could realistically have said if it had been invited to make representations. Its suggested misunderstanding was that the director believed the assignment was permitted. However, he knew the worker was his brother-in-law, and the misunderstanding was attributed to a failure to read the relevant guidance carefully. The court did not consider that this provided meaningful mitigation.
In addition, the court noted that the Home Office was not obliged to consider mitigation or to give it weight. TJ Trading could apply for a new sponsor licence after the relevant 12-month period. Taking these circumstances together, the Court of Appeal held that procedural fairness did not require the Home Office to invite representations before revoking the licence on ground C1(o).
Procedural fairness remains dependent on the context of the decision and the particular circumstances in which the power is exercised.
Why did the finding under ground C1(z) remain unlawful?
The Court of Appeal treated ground C1(z) separately from the family-member breach. The Secretary of State did not challenge the High Court’s conclusion that the decision was unlawful insofar as it relied on C1(z), because the Home Office had not provided adequate reasons for its conclusion that there were reasonable grounds to consider the role was not a genuine vacancy.
The Secretary of State argued that this defect should not affect the outcome. The revocation letter had expressly stated that each ground was sufficient on its own and that the grounds were relied on both individually and cumulatively. The Home Office therefore submitted that the same decision would have been made on ground C1(o) alone.
The court accepted that argument. It found that the wording of the revocation letter clearly treated C1(o) and C1(z) as independent bases for revocation. The inadequacy of the reasons for C1(z) did not undermine the separate and undisputed C1(o) ground.
In reaching that conclusion, the court applied section 31(2A) of the Senior Courts Act 1981. This provision requires a court to refuse judicial review relief where it appears highly likely that the outcome for the applicant would not have been substantially different if the challenged conduct had not occurred.
What was the final outcome?
The Court of Appeal allowed the Secretary of State’s appeal on both grounds. It held that the High Court had been wrong to find that procedural fairness required an opportunity to make representations before revocation under ground C1(o). It also held that section 31(2A) applied because ground C1(o) independently supported the revocation decision.
However, the court did not erase the finding that the Home Office’s reasoning under ground C1(z) was unlawful. It set aside the High Court’s order and substituted a declaration that the decision was unlawful insofar as it relied on ground C1(z). Lady Justice Elisabeth Laing and Lady Justice Asplin agreed with Lord Justice Arnold.
The judgment therefore distinguishes between two separate grounds for sponsor-licence revocation and demonstrates why the legal and factual basis for each ground must be assessed independently.
Frequently asked questions
Did the Court of Appeal overturn the High Court’s decision?
Yes. The Court of Appeal allowed the Secretary of State’s appeal and set aside the High Court’s order. It substituted a declaration that the revocation decision was unlawful insofar as it relied on ground C1(z).
What is sponsor-licence ground C1(o)?
Ground C1(o) concerns the assignment of a Certificate of Sponsorship by a Sponsorship Management System user to their own close relative or partner, subject to the terms and exception set out in the sponsor guidance. The definition includes a brother-in-law.
Does the Home Office always have to invite representations before revoking a sponsor licence?
No. The Court of Appeal confirmed that procedural fairness is context-specific. On the facts of this case, an opportunity to make representations was not required before revocation on the undisputed C1(o) ground.
Did the court find that the Petrol Station Manager role was genuine?
The Court of Appeal did not make that finding. It left intact the conclusion that the Home Office’s reasons for relying on ground C1(z) were inadequate.
What does section 31(2A) of the Senior Courts Act 1981 provide?
It requires the court to refuse judicial review relief where it appears highly likely that the outcome for the applicant would not have been substantially different if the conduct complained of had not occurred, subject to the statutory exception.