Sponsorship Licence when the business is affected by mergers and takeovers
If you sell all or part of your business, you must remember that your sponsor licence is not transferrable. What happens next will depend on whether there is a change in direct ownership, whether you are being taken over completely or only in part by another organisation.
You must always report a change of ownership, a merger or a takeover to the Home Office via your sponsorship management system (SMS) account. If you fail to do so, the Home office will take action against you and the migrants involved. These changes must be made by the Level 1 user. If, however your Level 1 user is not available because you have been taken over or merged into another organisation, then the Level 1 user at the new sponsor organisation should report the changes.
If your business has been taken over completely
If your business has been taken over completely, you also must report the change via SMS account within 20 working days, report if any of your sponsored migrants are moving to the new sponsor and confirm if you need to surrender your sponsor licence.
If the change is to the direct ownership of your organisation, for example if it is sold as a going concern, your sponsor licence will be either revoked or made dormant if sponsored migrants have been transferred to another sponsor’s licence. The new owner must apply for a new sponsor licence within 20 working days, unless they already have one under the tiers and categories needed to sponsor the transferred migrants.The new owner does not have to assign a new CoS to the transferred migrants, unless the migrant is changing their job or they don’t have TUPE protection.
What is TUPE protection?
Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) provide employment rights to employees when their employer changes as a result of a transfer of an undertaking. The effect of the Regulations is to preserve the continuity of employment and terms and conditions of those employees who are transferred to a new employer when a relevant transfer takes place. This means that employees employed by the previous employer (the ‘transferor’) when the transfer takes effect automatically become employees of the new employer (the ‘transferee’) on the same terms and conditions (except for certain occupational pensions rights). It is as if their contracts of employment had originally been made with the transferee employer.
The Regulations contain specific provisions to protect employees from dismissal before or after a relevant transfer. Representatives of affected employees have a right to be informed about a prospective transfer. They must also be consulted about any measures which the transferor or transferee employer envisages taking concerning the affected employees.
If your business has been taken over partially
If your business has been taken over partially or if you are splitting out to form one or more new organisations and some of your sponsored migrants will be moved to a new organisation under TUPE protection, you must report the change via SMS, including details of migrants who will be moving to the new organisation within 20 working days, confirm if you need to amend your allocation of CoS and continue to report on any sponsored migrants you are still employing.
If the change means that you will no longer have any sponsored migrants, you must report the change via SMS within 20 working days and confirm if you want to surrender your licence. If you are not sure if you will need to sponsor any new migrants in the future, you can keep your licence.
If your business is currently going through the changes in its organisation and the changes mean that you will become responsible for migrant workers who are being transferred to you, give our Business Immigration team a call and we will guide you through the process of obtaining the Sponsorship Licence for your business quickly and efficiently.