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immigration – TUPE transfers

1 November 2018

If schools and academies do not conduct the correct right to work checks on employees, they risk significant penalties and, potentially, damage to reputation. Home Office guidance sets out specific requirements for employers in terms of conducting appropriate document checks. If followed correctly, this provides employers with a statutory excuse and thereby avoids having to pay a civil penalty for employing a person who does not have the right to work in the UK. There are further specific considerations for right to work checks and migrants who are sponsored under the Points Based System (PBS) when acquiring or transferring staff under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). This article seeks to explore these issues in more detail.


Right to work checks when inheriting employees

Where TUPE applies, right to work checks are deemed to have been carried out by the transferring employer (transferor). As the receiving employer (transferee), you therefore acquire the benefit of any statutory excuse obtained by the transferor. However, this ultimately depends on how well the transferor conducted its own checks. If the transferor did not conduct the original checks correctly, the transferee is liable for a civil and/or criminal penalty if any employees who commenced work on or after 29 February 2008, are later found to be working illegally.


If you acquire staff as part of a TUPE transfer, you should receive copies of all checks carried out by the transferor as part of the TUPE process and transfer of personnel files. Given there is no guarantee that these will be correct, however, we would recommend that you undertake your own right to work checks on all transferring employees whose employment commenced after 29 February 2008, as soon as possible after the transfer. This will also enable you to determine whether a follow-up right to work check is required for any time-limited transferring employees.


The Home Office allows a 60 day grace period after the TUPE transfer for transferees to conduct fresh document checks and thereby establish a statutory excuse. Failure to do so and subsequently being found to be employing someone illegally will result in robust sanctions which could include a civil penalty of up to £20,000 per illegal worker and/or a criminal conviction carrying a prison sentence of up to five years and an unlimited fine.


Transfer of PBS migrants

Where the TUPE transfer involves the transfer of sponsored migrant workers (usually under Tier 2 of the PBS), there are further duties on both the transferor and transferee.


Transferor duties

If you are the transferor, the Level 1 User must report the transfer via the sponsorship management system (SMS) within 20 working days of the transfer date. Your report should include the details of all the sponsored migrants who will be moving to the transferee; those that will not be moving to the transferee; and confirmation on whether or not you are surrendering your sponsor licence. Failure to report this may result in action being taken by UKVI against you and all sponsored employees having their permission to remain in the UK curtailed.


Transferee duties

If you are the transferee, your duties differ depending on whether you already hold a licence to sponsor.


a) Transferee does not have a Licence to Sponsor

A Licence to Sponsor is not transferrable. If you do not already have a Licence and the due diligence process identifies that sponsored migrant workers are in scope for transfer, you should take steps at an early stage to make an application for a Licence to Sponsor. This must be done within 20 working days of the transfer date.


Applications for a sponsorship licence are made online and prospective sponsors are required to provide specific supporting documentation within five working days’ of submitting the online application.


Applications can take between 8-12 weeks to be approved, but as long as the transferee makes the application within 20 working days of the transfer, it can continue to employ the transferred employees whilst the application is considered. If an application for a Licence to Sponsor is not made within the deadline, all of the sponsored transferring employees will have their permission to remain in the UK reduced to 60 days. If those employees remain employed beyond the 60 days, they would be employed illegally and the transferee would have potentially committed a criminal offence. If the transferee dismissed the migrant to avoid illegal working, any dismissal could be unfair.


In addition, if a transferring migrant has to leave the UK after the 60 days, a cooling off period would apply, which means those affected employees would have to stay out of the UK for at least 12 months before being able to be sponsored by you under Tier 2 again.


b) Transferee already has a Licence to Sponsor

Where the transferee already holds a Licence to Sponsor, it should check that the Licence covers the relevant categories of transferring sponsored employees. If not, it will need to make an application to extend the scope of its Licence to cover these categories within 20 working days of the transfer date.


In certain situations, the UKVI can give the transferee access to the transferor’s old Licence, so that it can report migrant activity for transferred sponsored employees through the SMS; otherwise the transferee may need to email the Tier 2 and Tier 5 Migrant Reporting Team with specific details in order to fulfil its reporting obligations.


Transferred employees do not need to submit a new visa application, nor does the transferee have to assign a new Certificate of Sponsorship (CoS) unless there is a change in the role that the migrant will be doing going forward. However, the transferee may need to apply for an increase to their annual CoS allocation in order to cover future sponsorship renewals for employees that have transferred.


Recruiting migrant workers after a TUPE transfer

If an employer wishes to recruit migrant workers who are eligible for sponsorship under a Tier 2 visa to start work in the transferring entity after the date of a TUPE transfer, they may need to request a change to their existing sponsor licence (e.g. by adding the new transferring entity as a branch), with sufficient time for the following to take place:

  • The employer to issue a CoS, including time for the Resident Labour Market Test to be satisfied, if required; and

  • The individual to make an application for their Tier 2 visa and receive their biometric permit before their start date.

Key tips:

  • Consider right to work documents and sponsorship issues at the early stages of an impending TUPE transfer;

  • Ensure those responsible for immigration and sponsorship licence compliance are aware of the TUPE transfer and dates involved;

  • Diarise and meet all specified deadlines in relation to Sponsorship and reporting changes to UKVI;

  • Check which Right to Work Guidance applies to transferring employees (n.b. there are different rules applicable depending on the start date of employment);

  • Carry out right to work checks on all transferring employees who commenced employment after 29 February 2008 in accordance with the applicable guidance, no later than 60 days after the transfer date; and

  • Seek professional advice if you are unsure on your responsibilities or timeframes.

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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