Moon Fish Limited, R (on the application of) v The Secretary of State for the Home Department

Neutral Citation Number: [2026] EWHC 2289 (Admin)

IN THE HIGH COURT OF JUSTICE KING'S BENCH DIVISION

ADMINISTRATIVE COURT Case No: AC-2026-LON-000686 Royal Courts of Justice Strand, London, WC2A 2LL Date: 4 September 2026 Before : Thomas Raphael KC, sitting as a Deputy Judge of the High Court - - - - - - - - - - - - - - - - - - - - - Between :

THE KING (on the application of MOON FISH LIMITED) Claimant - and –

THE SECRETARY OF STATE FOR THE HOME

DEPARTMENT Defendant - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Mansoor Fazli (instructed by City Heights Solicitors) for the Claimant Matthew Howarth (instructed by the Government Legal Department) for the Defendant Hearing dates: 30 July 2026 - - - - - - - - - - - - - - - - - - - - - Approved Judgment This judgment was handed down remotely at 10.30am on Friday 4th September, 2026 by circulation to the parties or their representatives by e-mail and by release to the National Archives. ............................. Judgment Approved by the court for handing down. R (Moon Fish) v SSHD Thomas Raphael KC (sitting as a Deputy Judge of the High Court): A. Introduction 1. 2.

3. This is a claim for judicial review brought by the Claimant, Moon Fish Limited (“MFL”), against the decision dated 18 November 2025 (the “Decision”) of the Defendant, the Secretary of State for the Home Department (the “SSHD”). By the Decision the SSHD ordered that MFL be removed from the list of licenced sponsors and revoked its licence to sponsor workers. MFL contends the Decision was procedurally unfair, based on a misdirection, and irrational. It claims the Decision should be quashed, its licence should be re-instated, and the matter should be remitted to the SSHD to reconsider what sanction should be imposed. The SSHD denies there was anything unlawful about the Decision.

4. The central events fall within a narrow compass: i) ii) iii) iv) v) vi) MFL was a licensed sponsor under the “Tier 2” sponsorship regime. It sponsored and employed three foreign workers. On 20 October 2025, the SSHD requested certain documents as to their employment, including salary records. On 3 November 2025 MFL provided the documents requested, without further explanation. Those documents indicated that in May and June 2025 MFL had paid one of the workers, a Mr Riaz, £3,560.51 less than his headline salary. This happened because Mr Riaz was on unpaid compassionate leave between 27 April 2025 and 22 June 2025. It is not contested that this lesser payment and the period of unpaid leave were lawful in employment law and, in themselves, not a breach of the sponsorship scheme’s rules. However, the lesser payment and period of unpaid leave were not reported to the SSHD. The Claimant accepts this was a breach of the reporting obligations under the sponsorship regime. vii) The SSHD did not ask the Claimant for an explanation of the “underpayment”. viii) On 18 November 2025, without any further communications having been exchanged, the SSHD gave the Decision. The Decision concluded that Mr Riaz had been underpaid without this being reported, in breach of the provisions of the sponsorship scheme. This made out the ground of revocation specified in Annex C1(aa). The SSHD revoked

the Claimant’s sponsor licence with immediate effect. Judgment Approved by the court for handing down. R (Moon Fish) v SSHD ix) x) In a pre-action letter of 5 December 2025 the Claimant explained the circumstances of the lesser payment and Mr Riaz’s absence on unpaid leave, and explained the failure to report was due to an innocent error. In her response of 19 December 2025 (the “PAP Response”) the SSHD refused to change her decision. xi) This claim was commenced within time on 16 February 2025. xii) xiii) Permission to appeal was granted on all grounds by Vikram Sachdeva KC, sitting as a deputy judge of the High Court, on 15 June 2026. Further, he granted a measure of expedition and directed the hearing should come on no later than 31 July 2026, because of the time that had expired since the making of the decision and the issue of the claim. xiv) The matter came on for hearing on 30 July 2026.

5. I have concluded that the Decision should be quashed and the matter remitted to the SSHD, for the reasons explained below. B. The Sponsorship Regime and Guidance (1) The Tier 2 Sponsorship Regime 6.

7. The “Tier 2” immigration regime in UK immigration law is concerned with skilled workers. A central part of it is the Tier 2 Sponsorship Regime. The genesis and function of the Tier 2 Sponsorship Regime was explained in R (Raj and Knoll Ltd) v SSHD [2015] EWHC 1329 (Admin): 15. The ‘Tier 2’ route for entry and leave as a non-EEA worker came into effect in 2009 under the 'Points-Based System' (“PBS”), contained within the Immigration Rules. This was introduced by an amendment to Statement of Changes in Immigration Rules, HC 395 by HC 1113 which replaced the previous ‘work permit’ scheme. The aim of the new scheme as set out in the Explanatory Notes to HC 1113 was to enable UK employers to recruit individuals from outside the EEA “to fill a particular skilled job that cannot be filled by a British or EEA worker”.

16. Central to the ‘Tier 2’ scheme is the role of the UK sponsor/employer. As a prerequisite to obtaining leave to enter or remain under the PBS 'Tier 2' route, a non-EEA worker must obtain a Certificate of Sponsorship (“CoS”) from a licensed sponsor. Employers can only issue a CoS if they are a licensed sponsor, i.e. they have been approved and placed by the SSHD upon the Register of Licensed Sponsors.

17. A CoS confirms that the non-EEA worker in question has been offered employment within an eligible category and includes a summary job description and the relevant ‘Standard Occupational Classification’ (“SOC”) Code for the particular job contained in the applicable UKBA's Codes of Practice for Skilled Judgment Approved by the court for handing down. R (Moon Fish) v SSHD Workers. The CoS is held electronically on the ‘Sponsorship Management System’ (“SMS”) and accessed electronically.

8. The parallel “Tier 4” sponsorship regime is concerned with foreign students attending UK educational institutions. It operates in the same fashion as Tier 2, and was explained in R (Global Vision College Limited) v SSHD [2014] EWCA Civ 659, in terms which give context to the Tier 2 regime as well: 10. Except as provided by or under the Immigration Act 1971 (“the 1971 Act”), a person who is not a British citizen is not permitted to enter the United Kingdom unless given leave to do so in accordance with the provisions of the 1971 Act or provisions/rules made under it. Permission may be given either for a limited or an indefinite period: see sections 1(2) and 3(1) of the 1971 Act. By section 3(2), “the Secretary of State shall from time to time…lay before Parliament statements of the rules, or of any changes in the rules, laid down by him as to the practice to be followed in the administration of this Act for regulating the entry into and stay in the United Kingdom of persons required by this Act to have leave to enter, in different including any rules as circumstances…”. These statements are contained in the Immigration Rules (HC 395 as amended). to…the conditions to be attached (i) Context and background 11. The Points-Based System was progressively introduced during 2008 and 2009. Its details are set out in the Immigration Rules, Appendices to those Rules, and supplementary

guidance. Jackson LJ has stated that “none of these documents are light reading” and, more recently, that the provisions “have now achieved a degree of complexity which even the Byzantine emperors would have envied”: R (WGGS Ltd t/a Western Governors Graduate School) v Secretary of State for the Home Department [2013] EWCA Civ 177 at [6] and Pokhriyal v Secretary of State for the Home Department [2013] EWCA Civ 1568 at [4].

12. Previous decisions (in particular R (New College Ltd) v Secretary of State for the Home Department [2013] UKSC 51, reported at [2013] 1 WLR 2358 at [1] and [3], and see Toulson LJ in the Divisional Court at [2013] EWHC 31 (Admin) at [35]) have referred to the centrality of the status of a licensed sponsor to the operation of the Points-Based System. That centrality is the result of the policy decision to try to improve immigration control by ensuring that sponsors carried out a high degree of due diligence to check that CAS holders would meet the requirements for entry clearance or leave to remain. Licences are of great economic importance to educational institutions because, if licensed, they can market themselves to international students on the basis that their acceptance will, in the ordinary course, enable the student to enter the United Kingdom. In the New London College case, Lord Sumption stated (at [19]) that, although “the grant of a CAS by an educational institution is not tantamount to leave to enter or remain”, it is “strong but not conclusive evidence of some of the matters which are relevant upon the migrant’s application for leave to enter or remain”.

13. In Alvi’s case Lord Hope stated (at [42]) that the introduction of the Points- Based System has created a system of immigration control in which the emphasis Judgment Approved by the court for handing down. R (Moon Fish) v SSHD is on “certainty in place of discretion, on detail rather than broad guidance”. Lord Walker stated (at [117]) that the system is “aimed at eliminating any need or possibility of further evidence being produced in support of an application” and for “the decision making process to involve as little discretion or judgment as possible”. With the certainty and detail referred to by Lord Hope, however, comes some rigidity and also the possibility of strategic behaviour by those subject to the system in order to navigate their way around obstacles in the Rules. Where the Secretary of State considers that such behaviour has led to an unwarranted evasion of the Rules, her response has been to amend the Rules or the guidance.

9. The Confirmation of Acceptance of Studies (“CAS”) in the Tier 4 scheme has the same role as the CoS in the Tier 2 scheme. (2) The Status of the Tier 2 Guidance 10.

11. The terms of the Tier 2 regime are set out in guidance issued by the SSHD: “Workers and Temporary Workers: Guidance for Sponsors” (the “Guidance”). This changes frequently over time. The version before me was Version 11/25, in force from 11 November 2025. No one suggested there was any material difference to the version in force at the date of the earlier communications. The Guidance is non-statutory. It is made by the SSHD under the administrative powers she uses when controlling immigration under the Immigration Act 1971. It does not concern the entry position of the migrant but only the position of the sponsor under the scheme. It is thus not authorised by statute; does not have to be put before Parliament under s. 3(2) of the 1971 Act; and does not receive the approval of Parliament: R (New London College Ltd) v SSHD [2013] 1 WLR 2358 (SC), [6]-[9], [28]-[29], applied to Tier 4 in Prestwick (CA) at [5].

12. The Guidance is a statement of policy but it does not bind the SSHD, who can depart from it, if she has good reason to do so. (3) The Terms of the Guidance 13. Part 1 of the Guidance is titled “Apply for a licence”. Section L1, paragraphs L1.1-L1.6 explain the basic features of the scheme. To employ a worker without pre-existing leave to remain, an employer must have a sponsor’s licence (L1.1). The worker must have a CoS from the sponsor, confirming his or her job offer, before he or she can enter the UK (L1.4). Under L1.5: “Sponsorship … involves a pledge from the sponsor that it accepts all of the duties of sponsorship.” 14. Section L2 is headed: “Sponsorship: Your responsibilities”. L2.1-L2.3 are concerned with "Guiding Principles”: L2.1. Sponsorship is based on two main principles: • sponsorship is a privilege, not a right – this means that those who benefit most directly from employing migrant workers must: o play their part in ensuring the immigration system is not abused o comply with wider UK law o not behave in a manner that is not conducive to the public good Judgment Approved by the court for handing down. R (Moon Fish) v SSHD • overseas nationals who apply for permission to enter or stay in the UK to work are eligible, and a trustworthy and licensed employer genuinely wishes to employ and sponsor them When a sponsor is granted a licence, significant trust is

placed in them. With this trust comes a direct responsibility to act in accordance with the UK’s immigration laws, all parts of this sponsor guidance, and with wider UK law, … We have a duty to ensure all sponsors discharge these responsibilities, and we will take compliance action when it is considered that a sponsor has failed to do so, or otherwise poses a risk to immigration control. L2.2. … L2.3.

15. L2.10, “Abuse of Sponsorship Arrangements”, provides: L.2.10 UKVI will consider information about abuse of the sponsorship arrangements, including behaving in a manner that is not conducive to the public good, investigate it and, if appropriate, tell the relevant authorities. UKVI will also take action against you (the sponsor). This could include downgrading your licence, suspending your licence, or revoking it. There is more information in Part 3: Sponsor duties and compliance 16. “UKVI” is UK Visas and Immigration, part of the Home Office.

17. The application process is dealt with in L.3. Under L3.8, a sponsor licence will generally be valid indefinitely. L3.10 to L3.13 further explain: L3.10. As a licensed sponsor, you must meet certain duties, such as telling us if your sponsored workers don’t start their employment or are absent without permission for a significant period. … You must also give any documents to us, within the timeframe specified, if we request them. L3.11. We will continually monitor your ability and willingness to comply with your duties. We will make regular checks with HMRC to ensure you are paying your sponsored workers appropriately, and we may also: … • conduct a compliance check … L3.12. If you fail to comply with your duties, or become no longer eligible or suitable to hold a sponsor licence, we may take action against you, including: • downgrading your licence rating – see Sponsor ratings for further information reducing the number of CoS you can assign (or setting your limit to zero) suspending your licence while we investigate further revoking your licence • • • Judgment Approved by the court for handing down. R (Moon Fish) v SSHD • in serious cases, reporting you to the police or other relevant authorities 18.

19. L8.23 to L8.25 explain that a sponsor starts with an “A” rating but may be downgraded to a “B” rating. If a sponsor is downgraded it will be subject to a time-limited action plan setting out the steps required to regain an A-rating. If the plan’s requirements are not met, “we will revoke your licence”. A sponsor with a “B” rating only has limited abilities to grant a CoS: S3.2 to S3.3. Part 2 is titled “Sponsor a worker: general information”. S1.16, “How you sponsor a worker”, provides: “You must assign a valid Certificate of Sponsorship (CoS) to the worker so they can make a successful application for permission to enter or stay in the UK. …” 20. A set of provisions are headed: “Understand your sponsorship duties”: S1.41 You are responsible for checking that your sponsored workers carry out the role for which they are being sponsored and for monitoring their attendance. You must tell us if they don’t turn up for work, are absent without permission, or there are significant changes to their employment or to your organisation. … S1.43 If you fail to comply with your reporting and record-keeping duties, we may take compliance action against you – this could include revoking your licence.

21. Under S2.2, a CoS is a database record, assigned to the worker through the online “Sponsorship Management System” (“SMS”). Further: S2.3. A CoS is confirmation from you, as a licensed sponsor, that you: … • are satisfied the worker can meet the relevant immigration requirements • are eligible to sponsor the worker on the relevant route • agree to abide by the terms and conditions as stated on the SMS 22. 23.

24. S.2.5 says the CoS “does not guarantee the worker will be granted entry clearance or permission.” But the CoS can be the essential platform, and often necessary precondition, to entry and leave to remain. S3.9 explains information to be included in the CoS including total weekly hours of work, or averages in case of variation, details of the worker’s job, salary and occupation code. Under S4.4 and S4.16, the salary amount to be entered must be “gross” and can be entered on a daily, weekly, monthly, or annual basis. Section S2 deals with pay and conditions and contains rules to prevent underpayment. One purpose is to protect workers. Another is to protect the scheme against its being abused to bring in low-paid labour. In this regard: Judgment Approved by the court for handing down. R (Moon Fish) v SSHD S4.1. S4.3. S4.4. If you are sponsoring a Skilled Worker, … you must ensure the worker’s salary meets or exceeds the relevant salary thresholds for those routes, as set out in the Immigration Rules and route specific guidance. We will refuse any application for entry clearance or permission, and reject any application for a Skilled Worker Defined CoS, if we are not satisfied the worker will be paid the appropriate salary. There are limited circumstances in which a worker can be paid less than the relevant salary threshold, or the amount stated on their CoS. You will normally

need to report any salary reductions to us and the worker may need to make a new application for permission – see: • Absence from work without pay or on reduced pay • Salary otherwise reduced We will make regular checks with HMRC (and, where necessary, compliance checks) to ensure you are paying your sponsored workers the amount you said you would. Unless an exception applies, if we find you are paying them less, and the new amount would not be eligible for a grant of permission on the relevant route, we will cancel the worker’s permission and take compliance action against you – this could include revoking your licence.

25. S4.19 to S4.23 deal with “Absence from work without pay or on reduced pay”: S4.19. … S4.22. S4.23. S4.24. Unless a valid exception reason applies, you must normally stop sponsoring a worker who is absent from their sponsored work without pay, or is absent on reduced pay, for more than 4 weeks in total during … any calendar year (1 January to 31 December) If a worker has been, or will be, absent from work without pay, or on reduced pay, for more than 4 weeks in total (as defined above), you must either: • • stop sponsoring the worker and report this via your SMS account if the period of absence is due to a valid exception reason, or you believe there are compelling reasons for you to continue sponsoring the worker, report the period of absence (including reasons, duration and any change to salary) via your SMS account You must also tell us if a sponsored worker has been absent from work for more than 10 working days without your permission (‘unauthorised absence’), whether or not you make any salary reductions for the period of unauthorised absence. You do not have to report shorter absences without pay, or on reduced pay. However, you may find doing so will help you monitor whether a sponsored worker has exceeded, or is likely to exceed, the permitted periods of absence. Judgment Approved by the court for handing down. R (Moon Fish) v SSHD 26. “Valid Exception Reasons:

Permissible Absences” are addressed from S4.26: S4.26. The following are permissible absences. You do not have to stop sponsoring a worker if they are absent without pay, or on reduced pay, for any of the reasons listed below (and they would not otherwise have been absent without pay, or on reduced pay, for more than 4 weeks): … • … sick leave S4.27. However, you should still report the period of absence via your SMS account, as outlined above. S4.28. If a valid exception reason does not apply but you believe there are compelling reasons for you to continue sponsoring a worker who has been absent from work without pay, or on reduced pay, for more than 4 weeks, you must report the absence and reasons via your SMS account for UKVI to consider. You should be aware that UKVI may cancel the worker’s permission if they are not satisfied there is a satisfactory reason for continuing to sponsor the worker. If this happens, you must stop sponsoring the worker. 27.

28. As explained below, MFL alleges that Mr Riaz’s absence was a permissible absence falling within “Sick Leave”, and so there was a “valid exception reason”; alternatively there were “compelling reasons” under S4.28. The SSHD does not deny that his period of unpaid leave was in itself justified within the terms of the Guidance, and so MFL did not need to stop sponsoring Mr Riaz. But conversely MFL accepts that since Mr Riaz’s unpaid leave was for longer than four weeks, it should have been reported, under S4.22, S4.27 and/or S4.28, and/or C1.13 (below), but that no such report was made. S4.29 deals with “Salary otherwise reduced” and requires the sponsor to notify UKVI “if a worker’s salary is reduced for reasons other than absence”. S4.31 deals with “Salary reductions” and provides that “you do not have to stop sponsoring a worker if you reduce their salary and any of the following exceptions apply (although you must tell us via your SMS account that you have reduced the worker’s salary)”. The exceptions include “a temporary reduction in the worker’s hours, or a phased return to work, for individual health reasons” (subject to conditions) and various others.

29. Part 3 is titled “Sponsor duties and compliance”. The “Guiding Principles” are: C1.3. Sponsorship is a privilege not a right. The sponsorship system reflects that those who benefit directly from migration (employers, education providers or other organisations who bring in overseas nationals) should play their part in ensuring the immigration system is not abused. Significant trust is placed in sponsors and they must ensure they comply with immigration law and wider UK law, and not behave in a manner that is not conducive to the wider public good. Judgment Approved by the court for handing down. R (Moon Fish) v SSHD C1.4. C1.5. To achieve these aims, all licensed sponsors must fulfil certain duties. Some of these duties apply to all sponsors, whilst others are specific to those licensed under certain routes. The objectives of these duties include, but are not limited to: • preventing abuse of immigration laws and sponsorship arrangements • capturing early any patterns of behaviour that may cause concern • addressing possible weaknesses in process which can cause those patterns • monitoring compliance with the Immigration Rules, all parts of the Worker and Temporary Worker sponsor guidance, and wider UK law (such as employment law) • ensuring sponsors do not behave in a way that is detrimental to the wider public good 30. C1.9-C1.10 are entitled “What are your sponsorship

duties”. They provide: C1.9. Your duties as a licensed sponsor include: reporting duties record-keeping duties • • • complying with our immigration laws, including all parts of the Worker and Temporary Worker sponsor guidance • complying with wider UK law • not engaging in behaviour or actions that are not conducive to the public good C1.10. These are described in more detail below. If you fail to comply with your sponsor duties, we may take action against you. This can include any of the following sanctions: reducing your CoS allocation or setting it to zero • • downgrading your licence rating • • • suspending your licence while we investigate further revoking your licence reporting you to the police or other relevant authorities 31. The sponsor’s “Reporting duties” are explained in more detail in C1.11 to C1.13. Generally, by C1.11, the sponsor “must report certain changes that affect your sponsored workers or your organisation within the time limits set out below: • changes to a sponsored worker’s circumstances – unless otherwise stated, you must report these changes within 10 working days of the relevant event occurring.” In particular by C1.13, amongst other required reports: C1.13 You must report the following changes to a sponsored worker’ circumstances by no later than 10 working days after the relevant change or event has occurred, or as otherwise specified below: …

[two bullet points] … Judgment Approved by the court for handing down. R (Moon Fish) v SSHD • a sponsored worker is absent from work without pay, or on reduced pay, for more than 4 weeks in total in any calendar year .. and a valid exception applies – see section S4 of Part 2: Sponsor a worker for more information on your responsibilities if a worker is absent from work without pay, or on reduced pay • a sponsored worker’s salary or pay is otherwise reduced from the level stated on their CoS – see section S4 of Part 2: Sponsor a worker for more information on salary reductions (you do not need to report increases in salary … … 32. Under C1.48 the sponsor must comply with wider UK law including employment law.

33. Section C7 deals with “Compliance checks”. The “Guiding Principles” are: C7.1. C7.2. C7.3. The ability to sponsor workers to work in the UK is a privilege that must be earned. When a sponsor is granted a licence, significant trust is placed in them. With that trust comes a responsibility for sponsors to act in accordance with our immigration law, all parts of the Worker and Temporary Worker sponsor guidance, wider UK law (such as employment law) and the wider public good. UKVI has a duty to ensure all sponsors discharge these responsibilities, and that a sponsor’s actions (or omissions) do not create a risk to immigration control or are not conducive to the public good. The majority of those who employ overseas workers are honest and willing to comply with their duties. However, because sponsorship transfers a significant amount of responsibility and trust to sponsors, we have a duty to ensure that we deal appropriately with the minority who do not comply with their duties. We place great weight on the importance of trust in the operation of the sponsorship system and the need to ensure that sponsors take their duties seriously. We will continually monitor sponsors’ compliance and take action against those who: • • pose, or may pose, a threat to immigration control breach their sponsorship duties, or otherwise fail to comply with the Immigration Rules or Worker and

Temporary Worker sponsor guidance, including the passing on of costs to workers that are explicitly prohibited are convicted of criminal offences or issued with certain civil penalties (such as those for employing illegal workers) have engaged or are engaging in behaviour or actions that are not conducive to the public good • • C7.4. Compliance checks may be taken on the basis of a reasonable suspicion that you have breached your sponsor duties or are otherwise no longer suitable to hold a licence. This may be based on a poor previous record of compliance with us or other government departments. Judgment Approved by the court for handing down. R (Moon Fish) v SSHD C7.5. We have a range of measures to make sure that we enforce sponsors’ duties and identify dishonest, incompetent, or otherwise inappropriate sponsors early on. Action we may take includes: • • • • • reducing your certificate of sponsorship (CoS) allocation downgrading your licence to a B-rating suspending your licence revoking your licence cancelling the permission of your sponsored workers to remain in the UK where we believe a criminal or civil offence has taken place, reporting this to the police or other relevant authorities • 34. The “Outcome of Compliance Checks” is addressed at C7.23 to C7.26: C7.24. Where there has been a breach, or suspected breach, of your sponsorship duties, or if we consider you pose a

threat to immigration control or are not conducive to the public good, we will assess the issue and decide on the most appropriate course of action to take. C7.25. Where the breach is a relatively minor issue and you are willing and able to correct it, we will, in most cases, support you in making the relevant improvements by downgrading your licence to a B-rating and issuing a time-limited action plan which sets out the steps you must take in order to retain your licence. C7.26. Where there is a more serious breach indicating: • • • • a significant or systematic failing you no longer meet the eligibility or suitability requirements for holding a licence you pose a serious threat to immigration control you are engaging, or have engaged, in behaviour or actions that are not conducive to the public good we may decide either to: • • suspend your licence, with a view to revocation, while we investigate further, or revoke your licence without prior suspension 35. In relation to downgrading, under C8.5 and C8.6: C8.5 We will consider downgrading your licence if any of the issues listed in Annex C2 or Annex C3 arise. We reserve the right to suspend or revoke your licence without first downgrading it. C8.6 If we consider downgrading your licence, we will write to you to tell you what action we propose and why, giving you 20 working days from the date of that letter to respond in writing. We may extend this period at Judgment Approved by the court for handing down. R (Moon Fish) v SSHD your request if we are satisfied there are exceptional circumstances for doing so.

36. This engages a process of responses and evidence in writing under C8.7.

37. Under C8.11, if a sponsor is downgraded, it cannot assign a CoS to any new worker until an action plan is complied with and the A-rating restored. But existing workers can remain sponsored. Under C8.12 to C8.13 an A-rating must be recovered within three months or the licence will be cancelled. 38. “Suspending your licence” is dealt with in section C9. Under “Overview”: C9.1. … If we believe that you are breaching your sponsor duties and/or pose a threat to immigration control, or are engaging in behaviours or actions that are not conducive to the public good, we may suspend your licence while we make further enquiries. C9.4. Workers you are sponsoring at the time of the suspension, and who have valid permission to enter or stay, will not be affected, unless or until we decide to revoke your licence. C9.5. If we decide to revoke your licence, we will write to you to tell you of this. There is no right of appeal and you will not be allowed to apply for a sponsor licence again until at least 12 months have passed since the date we notified you of the revocation (or 24 months if you have had your licence revoked on more than one occasion). C9.6. If we decide not to revoke your licence, we will lift the suspension and reinstate your entry on the register of sponsors on GOV. UK.

39. Under “How we decide whether to suspend your licence”, a distinction is drawn between Annex C1, and Annexes C2 and C3. C.9.7 C9.8. If any of the circumstances listed in Annex C1 arise, we will either revoke your licence immediately or suspend your licence pending further investigation or consideration. If any of the circumstances listed in Annex C2 or Annex C3 arise, we will first consider downgrading your licence. However, we may decide to suspend your licence without first downgrading it. This could be where there has been sustained non-compliance over a period of time, or where there have been a number of breaches which are minor in themselves but, taken together, indicate a more serious or systematic failing.

40. Under C.9.9 and following, if there is enough evidence to justify a suspension before further investigation, a suspension is imposed and there is then a further process. Under C9.10, the SSHD notifies the company: “giving our initial reasons for suspension and Judgment Approved by the court for handing down. R (Moon Fish) v SSHD telling you that an investigation will take place.” This triggers a process of response and assessment under C9.11 to C9.17: C9.11. C9.12. … C9.15 You have 20 working days from the date of the written notification to respond to our letter. This is your opportunity to seek a review of our decision and to set out any mitigating arguments you believe exist. Your response to us must be in writing and set out, with any relevant supporting evidence, which grounds you believe to be incorrect and why. We may give you more time to respond if we are satisfied there are exceptional circumstances. We will not hold an oral hearing. If we identify any additional reasons for the suspension of your licence during that 20-day period, including any additional information gained during the course of discussions or interviews with workers to whom you have assigned a CoS, we will write to you again, giving you another 20 working days to respond in writing to the additional reasons. Appropriate action may include one or more the following – we may: (sic: “of” is omitted in the original after “more”) • • re-instate your licence with an A-rating re-instate your licence with a B-rating (and issue you with an action plan) • prevent you from assigning any new CoS • prevent the use of any assigned, but unused, CoS • revoke your licence.

41. Section C10 then deals with “Revoking your licence”. It starts: “This section tells you about the circumstances in which we will, or may, revoke your sponsor licence.” The “Overview” provides, at C10.1: “Certain circumstances can lead to your sponsor licence being revoked. These include, but are not limited to, where: … • there is a serious or systematic breach of your sponsor duties …”.

42. The approach to revocation varies according to the type of breach. Under “How we decide whether to revoke your licence”, the Guidance provides: C10.4. Annex C1 of this document sets out the circumstances in which we will revoke your licence – these are known as ‘mandatory’ grounds of revocation. If any of these circumstances arise, we may revoke your licence immediately and without warning. If we do not revoke your licence immediately, we will suspend your licence pending further investigation. C10.5. Annex C2 of this document sets out the circumstances in which we will normally there are exceptional licence, unless circumstances. revoke your C10.6. We cannot define in which exceptional circumstances we may not revoke your sponsor licence but, when one of the circumstances listed in Annex C2 of this guidance applies, we view this as a serious matter. Judgment Approved by the court for handing down. R (Moon Fish) v SSHD We will look for evidence you have adequate processes and procedures in place and have taken all reasonable steps to verify information you are required to obtain and hold in connection with your duties under this guidance, as well as any information that you send to us. C10.7. Annex C3 of this document sets out the circumstances in which we may revoke your licence. Generally, we will not revoke your licence if only one of these circumstances arises, but we

reserve the right to do so, depending on the gravity of the issue. The more of these circumstances that are present, the more likely it is that we will revoke your licence. C10.8. If any circumstances in Annex C2 or Annex C3 arise and we believe the evidence we have shows you are breaching your duties and/or pose a threat to immigration control, we will first suspend your licence while we investigate further. C10.9. If any circumstances in Annex C2 or Annex C3 arise and we do not believe it is necessary to suspend your licence, we may first downgrade it to a B rating instead. 43.

44. Annex C1, “Circumstances in which we will revoke your licence”, starts: “This Annex sets out the circumstances in which we will revoke your sponsor licence. We may suspend your licence first while we consider the matter, but we reserve the right to revoke your licence immediately without suspending it.” Annex C1 lists matters mostly of obvious seriousness, including criminal convictions for offences under the immigration acts or other serious offences (listed in Annex L4) (C1(b)); deliberate major breaches, such as giving false information in a CoS application (C1(r)), sponsoring a person for a non-genuine role (C1(z)), or non- compliance with the downgrading process (C1(l)-(n)).

45. The ground central to this case is C1(aa), which covers where: You pay a sponsored worker less than you said you would on the worker’s CoS, and: • • you have not notified us of the change in salary; or the reduction is not otherwise permitted by the Immigration Rules or the “Workers and Temporary Workers: guidance for sponsors” 46. Annex C2 is titled: “Circumstances in which we will normally revoke your licence”. It starts: “This annex lists the circumstances in which we will normally revoke your sponsor licence. We may downgrade or suspend your licence first while we consider the matter, but we reserve the right to revoke your licence immediately without downgrading or suspending it. ....” 47. The situations in Annex C2 are in general less serious than those in Annex C1 and include matters of variable seriousness. They include at C2(a): “You fail to comply with any of your sponsor duties set out in section C1”. They also include, at C2(b), “As a Judgment Approved by the court for handing down. R (Moon Fish) v SSHD result of information available to us, we are not satisfied you are using a process or procedure necessary to fully comply with your sponsor duties”; C2(e) “You fail to co- operate with a compliance check, where required, or delay compliance activity”, and C2(f) “You have provided a false statement or false information, or have not provided, when required,

information that you held, to us ….” C2(g) and (h) cover not providing documents or evidence requested. A final head is C2(ff) “We have reason to believe that you otherwise pose a risk to immigration control.” 48. Annex C3 is titled “Circumstances in which we may revoke your licence”. It starts: “This annex lists the circumstances in which we will consider revoking your sponsor licence. Generally, we will not revoke your licence if only one of these circumstances arises, but we reserve the right to do so, depending on the gravity of the issue. The more of these circumstances that are present, the more likely it is that we will revoke your licence. We may downgrade or suspend your licence first while we consider the matter, but we reserve the right to revoke your licence immediately without downgrading or suspending it.” It includes less serious situations, such as receiving a civil penalty under immigration rules (C3(a), (j)); or where a sponsored worker is in breach of immigration rules and the sponsor has not followed good practice guidance (C3(e)).

49. The interpretation of policy documents such as this is a matter of law which the Court must decide for itself: Mandalia v SSHD [2015] 1 WLR 4546 (SC) [31]. (4) Legal principles governing the system of sponsorship 50. Key principles governing the scheme were set out in Prestwick (CA) [19]-[23]: 19 The legal principles governing the system of sponsorship and its review by the courts are established in a series of cases, some of which relate to the Tier 2 scheme (sponsorship of skilled workers) and others to the similar sponsor scheme under Tier 4 (for colleges who sponsor students). It is well established that the same principles apply to both Tiers: R (London St Andrew’s College) v Secretary of State for the Home Department [2018] EWCA Civ 2496 (“St Andrew’s College”), para 29 (considered below). 20 The sponsorship scheme is entirely voluntary. A care home can, if it chooses, engage only staff who already have leave to remain in this country. A sponsorship licence gives a care provider a business advantage through access to a wider labour market. But to enjoy that advantage the provider must comply with the rules of the scheme. In R (New London College Ltd) v Secretary of State for the Home Department [2013] 1 WLR 2358 Lord Sumption JSC said, at para 29: “There are substantial advantages for sponsors in participating [in the Tier 4 Scheme] but they are not obliged to do so.

The Rules contained in the Tier 4 Guidance for determining whether applicants are suitable to be sponsoring institutions, are in reality conditions of participation, and sponsors seeking the advantages of a licence cannot complain if they are required to adhere to them.” 21 In St Andrew’s College, at para 29, Haddon-Cave LJ reiterated a summary of the principles he had articulated in R (Raj and Knoll Ltd) v Secretary of State for Judgment Approved by the court for handing down. R (Moon Fish) v SSHD the Home Department [2015] EWHC 1329 (Admin) (“Raj and Knoll”), at para 21, which had been approved by this court on appeal at [2016] EWCA Civ 770. For the purposes of these appeals they can be expressed as follows: “(1) The essence of the system is that the Secretary of State imposes ‘a high degree of trust’ in sponsors granted (‘Tier 2’ or ‘Tier 4’) licences in implementing and policing immigration policy in respect of migrants to whom it grants Certificate of Sponsorship (‘CoS’) or [under the Tier 4 scheme] Confirmation of Acceptance (‘CAS’) . . . “(2) The authority to grant a certificate (CoS or CAS) is a privilege which carries great responsibility: the sponsor is expected to carry out its responsibilities ‘with all the rigour and vigilance of the immigration control authorities’ . . . “(3) The Sponsor ‘must maintain its own records with assiduity’ . . “(4) The introduction of

the Points-Based System has created a system of immigration control in which the emphasis is on ‘certainty in place of discretion, on detail rather than broad guidance’ (per Lord Hope in R (Alvi) v Secretary of State for the Home Department [2012] UKSC 33, reported at [2012] 1 WLR 2208, para 42). “(5) The [certificate] is very significant: the possession by a migrant of a requisite CAS [or CoS] provides strong, but not conclusive, evidence of some of the matters which are relevant upon the migrant’s application for leave to enter or remain . . . “(6) There is no need for UKBA to wait until there has been breach of immigration control caused by the acts or omission of a sponsor before suspending or revoking the sponsorship, but it can, and indeed should, take such steps if it has reasonable grounds for suspecting that a breach of immigration control might occur . . . “(7) The primary judgment about the appropriate response to breaches by licence holders is that of the Secretary of State. The role of the Court is simply supervisory. The Secretary of State is entitled to maintain a fairly high index of suspicion and a ‘light trigger’ in deciding when and with what level of firmness she should act . . . “(8) The courts should respect the experience and expertise of UKBA when reaching conclusions as to a sponsor’s compliance with the Guidance, which is vitally necessary to ensure

that there is effective immigration control . . .” 22 In the following paragraph (para 30) in St Andrew’s College, Haddon-Cave LJ endorsed the following four further principles which he derived from the judgment of Silber J in R (Westech College) v Secretary of State for the Home Department [2011] EWHC 1484 (Admin): “(1) The SSHD has stringent powers to suspend or revoke a sponsor’s licence if the SSHD becomes concerned that a sponsor is not complying with its obligations and must be sensitive to any factors which might suggest the possibility of any breaches of immigration control having occurred or being about to occur because of lapses or omissions committed by a sponsor . . . “(2) There is a clear need in some circumstances for the SSHD to invoke the SSHD"s powers where there is a risk that the sponsor might not be Judgment Approved by the court for handing down. R (Moon Fish) v SSHD complying with its duties provided of course that UKBA complies with its public law duties . . . “(3) The expertise and experience of the SSHD and UKBA in being able to detect the possibility that a sponsor might not be or be at risk of not complying with its duties is something that the court must and does respect because, unlike the SSHD, courts do not have this critically important experience or expertise . . . “(4) An entity which holds a sponsor licence has substantial duties to

ensure that the rules relating to immigration control are adhered to strictly and properly, such that if the SSHD were concerned that a sponsor is not complying with those duties, it would entitle, if not oblige, UKBA to prevent that sponsor from either granting more [certificates] or revoking its licence . . .” 23 In Raj and Knoll in the Court of Appeal, Tomlinson LJ said (at para 32): “I was not . . . immediately impressed by the submission that the supervision of this scheme by the SSHD attracts an enhanced standard of judicial scrutiny. The mere fact that the decision-making in this area may have serious commercial consequences for licensed sponsors is not of itself a reason to impose heightened scrutiny. The circumstance that the SSHD has special expertise in and experience of decision-making in this field, and that the court possesses no particular institutional competence and can claim no special constitutional legitimacy militates against that submission . . . It is also clear that the exercise in which the SSHD is engaged involves no fundamental right of the appellant but on the contrary a right contingent upon adherence to the rules . . .” 24 These principles have since been applied in a number of first instance cases, including, in respect of Tier 2 licences, R (Birds Hill Nursing Home) v Secretary of State for the Home Department [2015] EWHC 2241 (Admin) and R

(Operation Holdings Ltd (trading as Goldcare Homes)) v Secretary of State for the Home Department [2019] EWHC 3884 (Admin) (“Goldcare"). In the latter case, the deputy judge, Alison Foster QC (as she then was), observed: “21. It is clear that sponsorship is based on two fundamental principles: (i) Those who benefit most directly from migration, that is to say employers, education providers or other bodies who bring in migrants, must play their part in ensuring that the system is not abused; and (ii) The Home Office needs to be sure that those applying to come to the UK to undertake work or to study are indeed eligible to do so and if a reputable employer or education provider genuinely wishes to take them on. “22. This provides the context for the application of the scheme, and reflects, as was said by McGowan J [at first instance] in R (London St Andrew’s College) v Secretary of State for the Home Department [2014] EWHC 4328 (Admin) at [13], that the obligation of a sponsor is to carry out its responsibilities ‘with all the rigour and vigilance of the immigration control authorities’. This approach is found throughout the case law . . ." Judgment Approved by the court for handing down. R (Moon Fish) v SSHD (5) No issue of precedent fact 51. 52.

53. The Claimant contended the doctrine of precedent fact applied to proof of the facts making out a ground of revocation. That is, the SSHD must prove on the balance of probabilities that the ground is made out. There is a series of decisions holding precedent fact does not apply here. Instead the SSHD is the primary fact finder whose factual assessment can only be challenged by a ground of public law review: R (London St Andrews College) v SSHD [2014] EWHC 4328 (Admin) [16]-[18]; R (Datamatics UK) v SSHD [2016] EWHC 1780 (Admin) [18]-[20]; R (Taste of India) v SSHD [2018] EWHC 414 [63]-[65], R (Hartford Care) v SSHD [2024] EWHC 3308 [49]. The key reasons given are (1) This is not a case of a statutory power, with a precedent jurisdictional fact, but concerns the application of the SSHD’s own guidance. (2) Under the scheme the Court’s role is only supervisory. (3) These situations are not analogous to the cases of fundamental rights engaged by the definition of an illegal entrant (R v SSHD ex p Khawaja [1984] 1 AC 74). (4) The SSHD has an expertise that includes an understanding of the Guidance and its application. A host of other cases assume this is the position.

54. Prestwick (CA) states “the primary judgment” as to the “appropriate responses to breaches” is the SSSD’s, and “the Court’s role is ‘supervisory’”: [55], quoting Raj and Knoll [21(7)]-[21(8)] (quoted above). This suggests the same applies to fact-finding.

55. MFL cited a number of cases, but they related to different situations and did not assist. MFL also argued that the decision to revoke affects the fundamental rights of migrant workers, and is made within the scope of the Immigration Rules, and so is analogous to Khawaja. That ignores the distinction, established in New London College, between the Immigration Rules, which govern the position of migrant workers, and the sponsorship rules, which do not. As explained in Raj and Knoll [32]: “the exercise in which the SSHD is engaged involves no fundamental right of the appellant but on the contrary a right contingent upon adherence to the rules.” 56.

57. I add that requiring satisfaction of precedent fact would likely be unworkable. The SSHD has to control the compliance of a very large number of sponsors in complicated factual situations where precise proof is often difficult. I would only have departed from the line of first instance cases capped by Taste of India had I concluded they were clearly wrong. I am not so persuaded. Thus, to challenge the SSHD’s factual assessment as to the existence of a ground of revocation the claimant must make out a ground of public law review. (6) Discretion and “Mandatory” Grounds of Revocation 58. The situations identified in Annex C1 are said to be “mandatory” grounds of revocation and C.10.4, and the title and introduction to Annex C1 refer to them as “circumstances in which we will revoke your licence”. This contrasts to Annexes C2 and C3 which Judgment Approved by the court for handing down. R (Moon Fish) v SSHD expressly allow for an assessment as to whether to revoke: C10.5, C10.7, and the introductions of Annexes C2 and C3. 59.

60. Yet despite the “mandatory” label, it is clear that a “residual” discretion not to revoke exists even where an Annex C1 situation is made out. This has been conceded by the SSHD on other occasions (eg R (TJ Trading Express Ltd) v SSHD [2025] EWHC 1274 (Admin) [93]); and was accepted here. It has also been upheld, notably in R (One Trees Estates Ltd) v SSHD [2024] EWHC 1644 (Admin) [36], adopted by the Court of Appeal in Prestwick (CA) [100]-[101]. The discretion allows the SSHD to determine “when and with what level of firmness she should act” and allows for lesser sanctions than revocation: TJ Trading [37], [93]. However, “in the absence of a particular reason to exercise it (for a reason that is not already factored into or provided for in the Guidance), there is no obligation to address or provide reasons for not exercising this discretion in particular cases”: One Trees [36]; Prestwick [100].

61. This is consistent with the Guidance considered as a whole, and with principle: i) ii) Some provisions of Annex C1 can be breached in ways of little significance for the scheme. Thus, C1(s) applies if the role undertaken does not match the occupation code or the job description on the CoS. That could be a minor discrepancy. Yet the Guidance as whole shows revocation is aimed at “serious” breaches. If there is a “more serious breach indicating” matters such as “a significant or systematic failing”, the SSHD may decide either to suspend or revoke without prior suspension: C7.26, also C8.2. C10.1 says the circumstances that can lead to revocation “include but are not limited to” matters such as a “serious or systematic breach of your sponsor duties”. Despite the “will” wording in C10.4, and Annex C1, C10.4 says: “If any of these circumstances arise, we may revoke your licence immediately without warning. If we do not revoke your licence immediately, we will suspend your licence pending further investigation” (underlining added). This uses “may” not “will necessarily”, and allows for a discretionary option to suspend instead of immediately revoking, even upon a finding of an Annex C1 situation (also C9.7). Further, suspension leads to an investigation and assessment, but a finding of an Annex C1 breach does not inevitably lead to revocation. C9.1, C9.5, C9.6 make clear that

revocation is only one possibility. Instead, the SSHD will consider all the circumstances including mitigation (C9.11). The range of sanctions includes revocation but less punitive options are available, including lowering the sponsor’s rating and imposing an action plan (C9.15, C9.24). iii) Similarly the PAP Response letter, §xxiii, accepts that “lesser sanctions, including downgrading or suspension” are available, and states that “immediate revocation may be warranted where there is clear evidence of a serious breach”. At §xxv it states “Revocation is reserved for serious or repeated breaches, or where sponsors fail to respond to opportunities to remedy non-compliance”. It seems that this explanation is intended to apply to Annex C1 as well as Annex C2. Judgment Approved by the court for handing down. R (Moon Fish) v SSHD iv) Irrespective of the terms of the Guidance, it is non-statutory, and cannot preclude departure from its terms. The SSHD would always have a discretion not to revoke in any event: Mandalia [31]; R (New Hope Care) v SSHD [2024] 1 WLR 4504 [116]. The Guidance passages quoted also suggest the seriousness of breaches is a central factor in the exercise of the discretion. In One Trees, [36], Obi J (as she is now) reasoned that a consideration that was already “factored into or provided for in the Guidance” might not warrant a decision not to revoke. It could be

argued that a ground within Annex C1 is inherently serious by definition, and so its seriousness is always “factored in”. I do not accept this. The terms of Annex C1 are at points drafted broadly and may capture non-central situations. Some could capture very minor breaches. Consider the example of an accidental small shortfall, swiftly corrected, under a payment instalment plan to pay a Civil Penalty, under C1(k). The decisions suggest that if a breach has a low level of seriousness that should be relevant to the discretion. In TJ Trading [93], Hill J rejected the SSHD’s arguments under s. 31(2A) because the evidence which was unfairly not considered “could have led to the conclusion that any breach of ground (o) was not deliberate … Such a finding could have led to a different sanction being selected.” See also New Hope, [113]; One Trees at [41]. Thus whether a ground within Annex C1 is serious or indicative of a systematic problem, in the light of its consequences and the sponsor’s culpability understood in the context of the scheme, as opposed solely to its placement in C1, is a relevant consideration for the exercise of the discretion. 62. 63. 64. 65. (7) Consequences of Revocation 66. 67.

68. Revocation of a company’s sponsorship licence has serious consequences for a sponsor because it can no longer sponsor migrant workers. There is some doubt as to whether after revocation the company can continue to employ workers it has already sponsored (unless and until their leave to remain is terminated). The Guidance does not in terms state this is prohibited, but MFL thought it was “probably” precluded. The submissions on this were incomplete, and I do not need to resolve the point. Irrespective of this, the revocation has serious consequences for the workers. The SSHD downplayed this, but (1) the revocation of the sponsorship licence also revokes any CoS (C10.12); (2) the workers’ permission to remain in the UK can be terminated. They can be served with curtailment notices, called “60-day” notices, giving them 60 days to find other employment, change their visa status, or leave the UK. The Guidance states “we will normally cancel the permission of any workers you are sponsoring.” (C10.2; also C10.10). The SSHD stressed this would be an independent decision.

69. It appears the SSHD has not yet terminated the three workers’ leave to remain or given 60-day notices since the revocation of MFL’s licence. But she could at any point. So the revocation put the workers at risk of losing their leave to remain and exposed them Judgment Approved by the court for handing down. R (Moon Fish) v SSHD to uncertainty. The evidence before me was unclear as to what precisely has happened to the workers since the Decision.

70. But while a decision to revoke a licence will inherently have serious consequences, for the sponsor, the sponsored workers and possibly others, the decision maker need not give particular consideration to potential specific consequences for the sponsor, its employees, service users or the wider community when deciding whether to revoke. See Prestwick (CA) [101]-[105]. The likelihood of problems of this kind is a predictable consequence of revocation, “built-in” to the inherent seriousness of any revocation decision: New Hope [127]. They are considerations the SSHD may take into account, not considerations she must consider. It can be rational to not take them into account, or to give them no weight: Prestwick (CA) [102]-[103]. (8) Scope of Annex C1(aa) 71. The parties disagreed as to the scope of C1(aa). The SSHD’s position was that any lesser payment compared to the headline salary stated in the CoS, even due to lawful and agreed unpaid leave, was a situation where “You pay a sponsored worker less than you said you would on the worker’s CoS”. Consequently, even if there was no other breach of the Guidance, within the second bullet point, then if the lesser payment was not notified, that fell within the first bullet point “You have not notified us of the change of salary”, and thus a mandatory breach of C1(aa) was made out. I do not accept this: i) ii) iii) It would mean

C1(aa) could be triggered by minor matters. To take one example, C1(aa) could be triggered if a worker had been on legitimate unpaid sick leave for two periods amounting to four weeks and 1 day, and the employer miscalculated and concluded that the total unpaid leave was four weeks and therefore did not report. It does not follow from the words of C1(aa). A CoS will report a headline salary. In this case, Mr Riaz’s CoS just gives his annual salary figure against “Gross Salary in pounds sterling”. If the salary figure was expressed as hourly, unpaid leave would not be a payment of “less” than “you said” in the CoS within C1(aa). In my judgment, this does not change just because the salary is expressed on an annual basis. Instead, the possibility of legitimate unpaid leave is implicit within an annual salary figure. I doubt it amounts to “paying the worker less” within C1(aa) and anyway conclude it does not amount to a “change of salary” within the first bullet point. As MFL argued at SFG §14, those words instead are focussed on paying a lesser salary than agreed. The rest of the Guidance is somewhat contradictory in the indications it provides. S4.26 and S4.29 seem to show a distinction between being absent without pay (S4.26), and where a “worker’s salary is reduced for reasons not related to absence” (S4.29), in which case the CoS may need to be changed. This would support a

reading distinguishing between (a) lower payments due to absence, which are implicit in the CoS, and (b) being paid less than the CoS due to non-absence related matters, suggesting that C1(aa) does not apply to the former. But on the other hand, S4.3 refers to there being “limited circumstances in which a worker can be paid less than the relevant salary threshold, or the amount stated on their CoS” and then points the reader both to “Absence from work without pay or on reduced pay” or “salary otherwise Judgment Approved by the court for handing down. R (Moon Fish) v SSHD iv) v) vi) vii) reduced” for further reading. This could suggest that unpaid leave is understood to mean being paid “less” within C1(aa). But the Guidance is not very tightly drafted. In the end, I do not think that much can be drawn from the indications in these other parts of the Guidance. Further, even if unpaid leave could fall within the initial words of C1(aa), I remain of the view that unpaid leave which is in itself legitimate under the other terms of the scheme, and so not within the second bullet point, is not within the first bullet point and so not within C1(aa) even if unreported. The focus of C1(aa) first bullet point on a “change of salary” is not consistent with all unreported unpaid leave which involves no actual change in salary being caught. There is no need to interpret C1(aa) in this

onerous way, because the failure to report unpaid leave will amount to a failure to report under C1.13, S4.22 and/or S4.27, and thus a breach of sponsor’s duties within C2(a). But C2(a) is a non- mandatory ground. The serious implications of satisfaction of a mandatory ground mean that it should be stipulated in clear terms. If, therefore, the SSHD had wished to create the onerous consequence contended for, clearer wording in Annex C1(aa) would have been required. Thus, the mandatory ground in Annex C1(aa) does not cover, or at least not with sufficient clarity, a failure to report unpaid leave which is otherwise consistent with the Scheme. This interpretation is more consistent with the overall operation of the Guidance. The inherent relative seriousness of a failure to report a legitimate period of unpaid leave seems more appropriately to fit within Annex C2 rather than C1. C. The Events and the Decision 72. MFL was incorporated on 6 April 2021 and granted a sponsor licence on 20 June 2023. It sponsored three migrant workers. No relevant compliance concerns other than the triggering events in this case have been identified. (1) The SSHD’s Request for Information 73. On 20 October 2025, UKVI requested information from MFL. The email stated: As per the published guidance, we reserve the right to revoke a licence where there is a serious or systematic breach of your sponsor

duties. We are looking into concerns that suggest your current sponsored workers may not be receiving a salary that matches the salary stated on their Certificate of Sponsorship. As per Annex C1(aa) of the sponsor guidance where it states such circumstances where we will revoke your licence: “You pay a sponsored worker less than you said you would on the worker’s CoS, and; • you have not notified us of the change in salary; Judgment Approved by the court for handing down. R (Moon Fish) v SSHD • or the reduction is not otherwise permitted by the Immigration Rules or the Workers and Temporary Workers guidance for sponsors”. So that we can make a fully informed assessment, please answer and provide ALL of the following: … 74. A detailed list of requests followed, including employment contracts, a monthly breakdown of each worker’s salary payment, payslips, and evidence of payments. It seems this email was triggered by analysis of HMRC data.

75. On 3 November 2025 MFL provided all the raw information requested without further explanation. UKVI asked no further questions. (2) The Decision 76.

77. On 18 November 2025 UKVI’s Sponsor Compliance Unit made the Decision. It stated: “we have revoked your sponsor licence with immediate effect, as we are satisfied on the balance of probabilities that you are failing to comply with your sponsor duties.” They explained: “HMRC data shows that you have sponsored workers that are being paid less than what is stated on their Certificate of Sponsorship (CoS)”, and this had led to the request. The information provided was analysed. The Decision concluded that Mr Riaz had been underpaid by £3650.51. Thus, “based on the salary stated on the above migrant’s certificate of sponsorship, they have not been paid in accordance with what is stipulated in their CoS and their contract of employment.” The Decision letter then set out Annex C1(aa), and S4. It also at §13 quoted Annex C2(a) dealing with failure to comply with sponsor duties, and immediately after that C1.13, requiring reporting of change of worker’s circumstances. It noted at §14 that “You have not reported any change of circumstances for any of your migrants which would justify the reduction in salary that some of your migrant workers have been receiving”. It then quoted L3.12 which referred to the possibility of various sanctions if the sponsor duties were not complied with, and said (§16) “In view of the above, and based on the documentation supplied on request, we consider

that you have failed to comply with your sponsor duties and are no longer considered suitable to hold a sponsor licence.” That preceded the section headed “Decision”, which said: 18. Migrants on a Skilled Worker visa have no recourse to public funds and are consequently reliant on their salary, as determined by the immigration rules. It is therefore crucial that a sponsor ensures the welfare of the workers they choose to sponsor by paying the agreed salary.

19. We always take into consideration the potential impact revocation may have on a sponsor and consideration is always given to re-rating a sponsor licence to allow a sponsor to demonstrate full compliance with their sponsor duties if appropriate. We have considered the possibility of downgrading your licence and issuing you with an action plan. However, as already stated, you have acted in contravention of Annex C1 aa) of the Workers and Temporary Workers: guidance for sponsors part 3. Downgrading your licence is not appropriate due to the seriousness of your non- compliance with your sponsor duties. Judgment Approved by the court for handing down. R (Moon Fish) v SSHD 20. Annex C2 of the Workers and Temporary Workers: guidance for sponsors part 3 states: We may downgrade or suspend your licence first while we consider the matter, but we reserve the right to revoke your licence immediately without downgrading or suspending it. For further information, see sections C8, C9 and C10 of this document.

21. As a result, your sponsor licence has been revoked. There is no right of appeal against this decision.

78. The reasoning of the Decision is not entirely clear, but as I explain further below, I interpret its essential logic as being that the SSHD finds a breach of C1(aa) only, and does so on the basis that there is an unexplained underpayment to Mr Riaz of less than his headline salary, combined with a failure to report. She then revokes for the breach of C1(aa). In contrast, the SSHD is not deciding to revoke under C2(a) on the basis of the failure to report in breach of C1.13. The C1.13 failure to report is part of the reasoning for the C1(aa) breach. (3) MFL’s explanations and mitigation 79. MFL sent a Pre-Action Protocol Letter on 5 December 2025. MFL explained that, while it was correct it had paid Mr Riaz £3650.51 less than his headline salary, this was due to authorised unpaid compassionate leave between 27 April and 17 June 2025, a period of two months, due to his mother’s serious illness. Email exchanges of April to May 2025 were produced recording requests and grants of the unpaid leave. The SSHD has not challenged the truth of these facts. Thus, it was argued, the unpaid leave and resulting lesser pay was legitimate under the Guidance, and not a breach of Mr Riaz’s employment contract. 80. 81.

82. Subsequently MFL has refined its case. MFL now says that the lower payments were justified under the Guidance because: (1) the compassionate leave of absence to care for Mr Riaz’s sick mother fell within “sick leave” within S4.26, so that there was a “valid exception reason” and a “permissible absence” and thus it was allowed to continue sponsoring Mr Riaz; (2) alternatively there were “compelling reasons” to continue sponsoring Mr Riaz even though he had been absent from work without pay for more than 4 weeks, within S4.28. Thus MFL was not required to stop sponsoring Mr Riaz. It was also MFL’s case that this authorised unpaid leave was consistent with the contract of employment. The SSHD disputed none of these conclusions. She did not address the details of the operation of the Guidance or employment law, and said it was unnecessary to do so. But she did not deny that in itself the unpaid leave did not breach the Guidance, and identified no reason why it breached employment law. In the circumstances the meaning of “sick leave”, or the operation of employment law, were not explored. Given the SSHD’s stance, it is appropriate to proceed on the basis that MFL is correct that (1) there was no breach of employment law; (2) there was, at least, a “compelling reason” for the period of unpaid leave from work within S4.28, so MFL could continue sponsoring Mr Riaz; (3) as necessary, a “valid exception reason” Judgment Approved by the court for handing down. R (Moon Fish) v SSHD applied. However, it is not necessary to explore closely whether compassionate leave is “sick leave”, which the SSHD did not deny. The point, and the question of whether a “valid exception reason” applied, do not change the rest of the analysis.

83. However, even accepting there was a “valid exception reason” within S4.26, or “compelling reasons” within S4.28, MFL was required to report Mr Riaz’s absence without pay, which was for more than 4 weeks. This was obligatory either under S4.22 and S4.28 and also the third bullet point of C1.13.

84. MFL accepts it breached reporting duties. Its explanation in its Statement of Facts and Grounds (“SFG”) is: “The breach of the guidance in respect of non-reporting the absence arose as a result of a pure oversight because the C’s director mistakenly took the view that he did not need to report an authorised absence but that he was only required to report any unauthorised absence. This is an entirely human error and the sponsorship rules are very complex. It is perfectly plausible that a genuine error can be made without malice.” (§30).

85. MFL also explained why that explanation was not given when responding to the SSHD’s enquiry of 20 October: “The C’s director did not think it relevant to provide an explanation for a temporary non-payment of salary for a short period of time where there has been an agreed authorised absence on compassionate grounds. … The C at the time acted in good faith without legal representation and provided what the director considered relevant” (SFG §21).

86. There was no witness statement to support these explanations. But they are contained in the SFG, which is incorporated into the Claim Form, which is itself signed with a statement of truth, and is therefore evidence of the facts stated. The SSHD never sought to contradict or cast doubt on this story. (4) Basis of the Decision 87.

88. The breach found is a breach of C1(aa) (§19). Further, as I read it, the Decision was based on the interpretation of Annex C1(aa) under which a breach of C1(aa) is made out by any lesser payment, even if due to unpaid leave for which there was a valid exception reason or compelling reasons within S4.28, if that lesser payment is not reported. The Decision reasons from (a) the mathematical fact of a payment less than the gross salary stated in the CoS (§9) and (b) the absence of reporting of any valid reason not to pay the full headline salary (§14) to (c) the conclusion that Annex C1(aa) is satisfied (§19). No basis is given for any conclusion that there has been a change of salary, or that the lesser payment is itself independently in breach of the Guidance within the second bullet point of C1(aa). For the reasons above, this was a misinterpretation by UKVI of C1(aa). The SSHD argued the decision to revoke was made not only under C1(aa) but also alternatively under C2 or C2(a). I do not accept this. The only breach actually found is a breach of C1(aa), as “already stated”. While C2 and C1.13 are quoted, it is not said that the breach found which justifies revocation falls within C2 or that revocation is justified for breach of C1.13. Thus, the decision to revoke is not based on a breach of reporting obligations in relation to unpaid leave not in itself in breach. The reasoning at §14 is that because there was no reporting of reasons for underpayment, breach of C1(aa) can be inferred. Judgment Approved by the court for handing down. R (Moon Fish) v SSHD 89. 90.

91. It is true that aspects of the wording are partly ambiguous. At §16 the Decision says that “we consider you have failed to comply with your sponsor duties and are no longer considered suitable to hold a sponsor licence” which resembles C2(a). But the broad phrasing is compatible with the focus being on C1(aa). Similarly, while Annex C2 is referred to in §20, this appears to be done for the purposes of making a general point that the SSHD can revoke immediately, although the reference to Annex C2 is somewhat misplaced. Finally, at §19 the option of downgrading is discussed and it is concluded this is not appropriate. This is reasoning perhaps more evocative of an analysis based on C2 or C3, consistent with C8.5. But downgrading could also be considered in the context of a C1 breach, for example under C9.15 in the context of a suspension. If the Decision were to have found that revocation was justified under C2(a), one would expect an analysis of the structure for the discretion to revoke for C2 breaches, at C9.8, C10.5 and C10.6, yet this is not done. Finally, even if one could discern an intention to justify revocation partially based on Annex C2, this is not clearly stated. There is no focus on this as an independent alternative ground. Still less is it said in the “decision” section that the SSHD would have revoked even if C1(aa) was not satisfied. Consequently, the

SSHD’s reasoning for revocation is inextricable from the finding of a breach of the mandatory ground under C1(aa). D. The Claimant’s Grounds and the SSHD’s Response 92. The SFG puts MFL’s Grounds in rather fluid terms. However, three substantial Grounds can be identified, as well as a fourth (the second in order) which the SSHD denies is adequately pleaded: i) ii) iii) First, procedural unfairness (Ground (a), and SFG §§13-27): it was procedurally unfair to proceed to an immediate decision to revoke on the basis of the underpayment identified as to Mr Riaz without first raising the concern as to the £3560.51 with MFL and asking for an explanation, where all that had been identified was an unexplained discrepancy as to one employee for a limited period. The SSHD should have afforded the Claimant the chance to advance explanations and mitigation, including by potentially suspending the licence and then investigating further. The SSHD’s request for information of 20 October was not sufficient to put the SSHD’s concerns to the Claimant. Second, Tameside (SFG §27, 29): the SSHD did not carry out a sufficient inquiry to ask for an explanation of the reduction, which she was required to do in order to arrive at an informed decision. (The SSHD denies that this is adequately pleaded.) Third, Misdirection (SFG §§13, 29): the SSHD misinterpreted C1(aa) by applying it to lower payments due

to justified periods of unpaid leave, and therefore reached the decision to revoke on the incorrect basis that a “mandatory” ground for revocation was satisfied. iv) Fourth, there was irrationality in deciding to revoke on the basis of a breach of reporting duties which were one-off, limited in time period, not systematic and Judgment Approved by the court for handing down. R (Moon Fish) v SSHD sustained, and “harmless and extremely minor” (Ground (b), SFG §§28-33). The key points made are that there was irrationality by (a) not taking into account the factors mitigating MFL’s culpability or considering whether there might be mitigating explanations; (b) revoking on the basis of such minor breaches when “a mere reporting issue does not justify revocation”.

93. In the SFG the fourth challenge was also put on the basis that the SSHD’s decision was disproportionate (SFG §33). But there was no attempt to make good, by reference to authority or principle, a basis for treating disproportionality as a ground of review in law, or develop how it applied. The point was not pursued in MFL’s skeleton nor orally. I therefore do not address it. Similarly, a glancing reference is made to it being wrong to revoke “without proper and sound reasons” (SFG §32). But no properly particularised challenge was ever developed on the basis of lack of adequate reasons.

94. The SSHD’s answers, in summary, are: i) ii) iii) iv) The duty of procedural fairness was either excluded, or reduced to only a minimum requirement by the context of the sponsorship scheme. Further, there was no unfairness. The SSHD did not proceed direct to revocation. Instead, the SSHD’s concerns were sufficiently put by the email of 20 October which raised a specific concern as to salary compliance. MFL could and should have identified its explanations as to the underpayment to Mr Riaz in the responses of 3 November. The context of the scheme makes clear that there is no obligation on the SSHD to spell out the answers and documents required. Thus there was no obligation to send a second message specifying the SSHD’s concerns as to Mr Riaz and asking for further specific explanations and mitigation. In the circumstances, there was no denial of an opportunity to respond. Instead MFL had that opportunity but failed to take it. There was no misdirection as an unreported underpayment fell within Annex C1(aa). The annex serves an important function of preventing workers being underpaid. In any event, the decision was justified for breach of the reporting requirements in C2(a). No case on Tameside was properly pleaded and in any event in the context of the scheme it was legitimate not to make further enquiry. The SSHD did not act irrationally. It was a question for the SSHD’s

discretion as to how to respond. There was a clear underpayment which it was reasonable to regard as falling within C1(aa); and absent the provision of any explanations it was reasonable so to regard them and to conclude that revocation was the appropriate solution. As to the discretion not to revoke, there was no obligation to consider it at length given the breaches found. In any event, the SSHD considered the possibility of downgrading it but rejected it. Further or alternatively, the decision was a rational response to the admitted reporting breaches. v) Even if there was a challengeable error, there was no “prejudice” to MFL, as the same result would have been inevitable. In any event, relief should be refused under s. 31(2A) Senior Courts Act 1981, as it is highly likely that the outcome would not have been substantially different even if the alleged errors Judgment Approved by the court for handing down. R (Moon Fish) v SSHD had not occurred. Even if the SSHD erred in relation to the compassionate leave, the admitted reporting breaches would have been sufficient to revoke. The SSHD made clear that she had considered downgrading. The PAP Response also shows that the same result would have been reached in any event. E. Procedural Unfairness 95. Although the facts of the case are narrow and of limited importance save to MFL and the workers, it is appropriate to go into the law on procedural fairness in some detail because the SSHD, I infer for reasons of general policy, treated the issues as raising important questions of principle. (1) Principles of Procedural Fairness 96.

97. English law does not impose a duty of fairness in all cases, but the duty to act fairly now applies across such a broad range of public decision making that there is a presumption that, absent a particular reason why the requirements of fairness do not apply, a decision of a public body should be made in a procedurally fair manner: R v SSHD, ex p Doody [1994] AC 531 (HL), 560. The duty to act fairly can and will be implied even into a statutory scheme which does not expressly provide for it. The Court of Appeal stated in R (Citizens UK) v SSHD [2018] 4 WLR 123, [68]-[71], as quoted in R (Baljigari) v SSHD [2019] 1 WLR 4647 (which Mr Howarth cited to me orally), at [45]:  68. That the common law will supply the omission of the legislature has not been in doubt since Cooper v Wandsworth Board of Works (1863) 4 CB (NS) 180 (Byles J); see also the more recent decision of the House of Lords in Lloyd v McMahon [1987] AC 625. Accordingly, the duty to act fairly or the requirements of procedural fairness (what in the past were called the rules of natural justice) will readily be implied into a statutory framework even when the legislation is silent and does not expressly require any particular procedure to be followed.

98. The paradigm situation where the duty to act fairly applies is where a decision maker is taking a decision which will or may have a direct or specific impact on a person, such as the imposition of a sanction: Bank Mellat v HM Treasury (No 2) [2014] AC 700 (SC), [29], [178].

99. The classic statement of principle is Lord Mustill’s in Doody at p. 560: “My Lords, I think it unnecessary to refer by name or to quote from, any of the often-cited authorities in which the courts have explained what is essentially an intuitive judgment. They are far too well known. From them, I derive that (1) where an Act of Parliament confers an administrative power there is a presumption that it will be exercised in a manner which is fair in all the circumstances. (2) The standards of fairness are not immutable. They may change with the passage of time, both in the general and in their application to decisions of a particular type. (3) The principles of fairness are not to be applied by rote identically in every situation. What fairness demands is dependent on the context of the decision, and this is to Judgment Approved by the court for handing down. R (Moon Fish) v SSHD be taken into account in all its aspects. (4) An essential feature of the context is the statute which creates the discretion, as regards both its language and the shape of the legal and administrative system within which the decision is taken. (5) Fairness will very often require that a person who may be adversely affected by the decision will have an opportunity to make representations on his own behalf either before the decision is taken with a view to producing a favourable result; or after it

is taken, with a view to procuring its modification; or both. (6) Since the person affected usually cannot make worthwhile representations without knowing what factors may weigh against his interests fairness will very often require that he is informed of the gist of the case which he has to answer.” 100. Affording the affected person the opportunity to make representations only after the decision is made will usually be insufficient to satisfy the standard requirements of procedural fairness: Balajigari [60].

101. However, the statutory or administrative context will shape and can reduce what fairness demands and even preclude the common law duty. Even the requirement to allow the affected person an opportunity to make representations can be precluded by the statutory framework and administrative context in appropriate situations. Those can include: (1) Where it is impossible, impractical, or pointless to allow for representations, or where that would lead to unacceptable risks to the public interest (see below on “pointlessness”). (2) Where the statutory or administrative context is inconsistent with such a requirement, including where it provides an established existing framework for the making of representations, which may occupy the field and preclude supplemental requirements. Bank Mellat (No 2) (SC) [35]-[37], [178]-[179].

102. A question arises as to whether the terms of non-statutory guidance, as opposed to statute law or guidance authorised by statute, can exclude duties of procedural fairness. In New London College, [60] (quoted in TJ Trading at [52]) Wyn Williams J said: “The content of the duty to act fairly in any given case must be judged against the Doody principles; policy or guidance published by UKBA cannot by itself resolve what constitutes the duty, one way or the other.” [60]; see also TJ Trading, at [54]. Further, the guidance must be interpreted against the background of the “fundamental” requirements of common law fairness, which will as appropriate be implied: TJ Trading at [33], [55].

103. Nevertheless, the nature and operation of the sponsorship scheme, even if framed in guidance alone, can substantively prevent common law procedural fairness being imposed to supplement the scheme. That is what happened in Prestwick (CA) [112]. Thus exclusory wording in guidance cannot in itself exclude fairness; but the nature of a guidance-based scheme can organically mean that there is less, and possibly even no, room for the classic requirements of common law procedural fairness. Yet the “fundamental” importance of fairness means this is a conclusion which requires justification: Bank Mellat (No 2), [35], [179]; New Hope [104(v)], [105]; TJ Trading [33].

104. The context can also lead to a “heightened” duty of fairness. A key example is where the SSHD is considering an adverse decision on grounds which amount to a finding of dishonesty or other reprehensible conduct: Balajigari at [51], [55]; Prestwick (CA) at Judgment Approved by the court for handing down. R (Moon Fish) v SSHD [48], [112], [132]-136]. In that situation, the SSHD must, in general, put her suspicion to the affected person.

105. Where a decision would deprive the affected person of a right or liberty, the requirements of procedural fairness may be intensified. But many benefits which are not rights are still important. So as Phillips LJ stated in R v SSHD, Ex p Fayed [1998] 1 WLR 763, 787, quoted in Balajigari at [49]: “The duty to disclose the case that is adverse to an applicant for the exercise of a discretion does not depend upon the pre- existence of any right in the applicant.” 106. As already noted, there may be no procedural unfairness if an opportunity to make representations is not given, if this is “pointless”. An example is where it would be inevitable they will make no difference: Bank Mellat (No 2), [179] quoted above, and R (Pathan) v SSHD [2020] UKSC 41, [120]-[121], [160]-[161]. This connects to the wider conclusion of the Court of Appeal that there is no, or no material, breach of procedural fairness if the affected person is not “prejudiced”: Singaram [49]-[50]. However, conclusions that representations would inevitably make no difference, will be of great rarity: see Balajigari, [134]. New Hope, [114] quotes John v Rees [1970] Ch 345, 402: “there are many cases in which apparently ‘open and shut’ allegations turn out not only to be answerable but actually wrong, once the person accused is given a chance to respond.” In Bank Mellat (No 2), Lord Neuberger said arguments that the obligation to give an opportunity to be heard is displaced by pointlessness will be “very closely examined, as the court will be slow to hold there should be no obligation to give such an opportunity”: [179].

107. Finally, the question of whether there has been a procedurally fair process, or not, is an objective question for the court to decide for itself. The question is not whether the decision-maker has acted reasonably, still less whether there was some fault on the part of the public authority concerned: Balajigari at [46]. (2) The duty of fairness within the Sponsorship Regime 108. Independent of the terms of the Sponsorship regime, the decision to revoke a sponsor’s licence is of a nature which is likely to give rise to a duty of procedural fairness. It has a direct and personal impact, and depends on a conclusion that the sponsor has in defined respects been at fault. It is the sort of decision in relation to which the person affected may well have something useful to say.

109. The central question, therefore, is whether and if so in what ways the context of the sponsorship scheme precludes or shapes the duty of procedural fairness.

110. The SSHD’s case evolved. In her written submissions, her position was that she did not dispute the existence of a “minimum” duty of fairness (§35), but that the Sponsorship regime limited and narrowed the duty of fairness. Specifically, in the context of immediate revocation under Annex C1, procedural fairness did not require the SSHD either (1) to put her specific concerns to the sponsor before revoking, nor (2) to suspend and investigate first, at least not in a case like this.

111. In oral submissions, however, I detected an evolution by which the SSHD may have been arguing that the effect of Prestwick (CA) was effectively to eliminate the common law duty of fairness in Annex C1 revocation cases, outside dishonesty. Judgment Approved by the court for handing down. R (Moon Fish) v SSHD 112. The SSHD stressed the provisions of the Guidance that state the sponsor’s licence is voluntary, and a “privilege” not a right (L2.1, C1.3); and refer to the “trust” given to the sponsor that brings with it a “direct responsibility to act … in accordance with all parts of the sponsor guidance” (L2.1, C1.3).

113. It is relevant here to recall the case law setting out the principles governing the scheme. This emphasises the points about voluntary participation, privilege and trust (Prestwick (CA) [21] above, quoting St Andrews’ College), and explains the requirements of the Guidance are “conditions of participation”, so a sponsor cannot complain it has to adhere to them, while possession of a licence is not a fundamental right, but a benefit contingent on adherence to the rules (New London College, [29]; and Raj and Knoll [32], quoted above).

114. This context will shape how the duty of procedural fairness is applied within the context of the scheme. The issue is acute in relation to the possibility of immediate revocation, without prior investigation, upon satisfaction of a head of Annex C1. Given that C10.4 provides that if so “we may revoke your licence immediately and without warning”, the SSHD has previously argued that in such a context the duty of procedural fairness is excluded altogether.

115. However, there is a consistent strand of first instance decisions, both before and after Prestwick (CA), which hold that the duty of procedural fairness, including fair warning of the SSHD’s concerns and a fair opportunity to be heard on them in advance of any decision, is not excluded by the Sponsorship regime, and specifically (in many of these cases) not excluded by the framework for mandatory grounds of revocation. This approach is not restricted to allegations of dishonesty or reprehensible conduct.

116. As summarised in TJ Trading they include: R (The London Reading College Ltd) v SSHD [2010] EWHC 2561 (Admin), [2010] ELR 809 at [48]-[60] (overturned in part in the Court of Appeal, but for other reasons); R (New London College) v SSHD [2011] EWHC 856 (Admin); New Hope, [96]-[103], [105]-[106], as well as TJ Trading itself. See also R (Liral Veget Training Ltd) v SSHD [2018] EWHC 2941 at [50(i)], [59]; and since Prestwick (CA), R (Blue Inn Ltd) v SSHD [2026] EWHC 1649 at [65(v)]-[66].

117. By the time of New Hope, the Guidance had evolved into similar terms as now. The SSHD had engaged the suspension pathway, by a general letter which did not identify her concerns, but then before the suspension process of evidence and submissions properly operated. The SSHD, faced with delays by the sponsor, revoked before putting her concerns to the company [6]-[13]. The SSHD argued that since a mandatory ground was made out, she did not need to. David Pievsky KC, sitting as a deputy judge of the High Court, disagreed. First, the SSHD was required by her guidance to put her concerns within the suspension process: [96]-[103]. Second, in any event, the common law requirement to be heard before important benefits were taken away applied, even though the licence was a “privilege not a right” [105]. The SSHD’s failure to give notice of the concerns which led to revocation departed from common law fairness [106].

118. As I explain below, aspects of the reasoning in New Hope now require qualification in the light of Prestwick (CA). But its core result remains sound.

119. TJ Trading follows Prestwick (CA). The SSHD identified mandatory grounds within Annex C1, the employment of a relation (C1(o)) and the creation of a vacancy that was Judgment Approved by the court for handing down. R (Moon Fish) v SSHD not genuine (C1(z)). There was no prior notification to the company, and the SSHD proceeded direct to revocation: [8]-[11]. The SSHD argued that since Guidance permitted her to revoke without warning, there was no room for the duty of procedural fairness to require that the company first be warned of concerns. This was rejected. Hill J reasoned: “the Guidance has to be interpreted against the background of the common law. The fact that the Guidance permits revocation without notice does not mean that, on certain facts, to take that course would [not] be procedurally unfair at common law.” [55] (The word “not” is missing but I infer should be interpolated.) This was because the “statutory context” did not preclude the basic requirement that “there is an irreducible minimum of information which a license-holder must be told if he is to have a proper chance to respond in these circumstances”: [45]. Turning to what procedural fairness demanded on the facts, Hill J regarded the SSHD’s findings as allegations of “reprehensible conduct” which triggered the heightened duty required by Balajigari [59]-[62]. But she then accepted there was “force” in

the conclusion that the duty of fairness would have flowed in any event from the impact on the company, and observed that in New Hope, which she followed [35], dishonesty was not a precondition: [63]- [64]. Taken in the round, the context of the scheme, and the conduct alleged, did not mean there need be no duty to afford the company the chance to make representations in advance. By not doing so, the SSHD was in breach of procedural fairness [65].

120. Hill J’s result is in part based on the premise that the SSHD’s accusations involved reprehensible conduct, but her reasoning is not confined to that case. It supports the proposition that the duty to afford the sponsor the opportunity to make representations is not precluded by the framework for mandatory revocation even outside a Balajigari situation. That was the obiter conclusion in Blue Inn [65(v)]-[66], adopting the reasoning in Prestwick at first instance.

121. Both New Hope and TJ Trading also reject the idea that the fact a sponsor’s licence is a privilege not a right removes the requirement of an effective opportunity to be heard: New Hope, [105]; TJ Trading [34], [45]-[46].

122. In support of his more restrictive propositions, Mr Howarth for the SSHD placed principal reliance on Prestwick (CA): i) In Prestwick itself, the suspension pathway had been triggered. The SSHD had put her central concerns to the sponsor which had had an extensive opportunity to respond. The suspension processes (then as now) allowed under C9.9 to C9.15 for a response and evidence within 20 days of the charges. In relation to procedural fairness, it was argued this was not enough. A heightened standard of fairness applied, principally because of the gravity of the consequences of the revocation decision: CA [35]-[36]; [47]-[48], [50]. HHJ Kramer’s first instance decision (which was not put before me, but which I read in order better to understand the Court of Appeal’s decision) shows that the specific complaint was that the processes of investigation and submissions should have been extended, with more rounds, and the SSHD putting her reasons for disagreeing with the sponsor’s case back to the company to get its further replies (Kramer [14]-[21], [34]-[36], [70]). ii) HHJ Kramer rejected the contention that such a “heightened” duty of fairness applied, since as he held, Prestwick did not concern allegations of reprehensible conduct (in contrast to the joined appeal in Supporting Care Ltd [56(3)], [107]). Judgment Approved by the court for handing down. R (Moon Fish) v

SSHD iii) iv) He held the process under the suspension provisions was fair in the circumstances. He accepted that ordinary standards of fairness applied, including that the company should be informed of the case against it, and have a fair opportunity to respond (Kramer [37]) but held they were satisfied by the suspension processes. The argument on appeal was therefore a challenge to HHJ Kramer’s conclusion that a “heightened” standard did not apply. The Court of Appeal rejected this: “the process to which a sponsor was entitled to have followed prior to a revocation decision was set out in the detailed provisions in the Guidance. A sponsor was not entitled to any greater protections than provided for in the Guidance. In most, if not all, circumstances, the supervision of the sponsorship scheme by the SSHD will not attract an enhanced standard of judicial scrutiny. Prestwick have not demonstrated any circumstances in their case which required greater scrutiny than provided for in the Guidance” (CA [112]). The SSHD relied on the words: “A sponsor was not entitled to any greater protections than provided for in the Guidance” to suggest Prestwick lays down a general rule that fairness does not require processes beyond those in the Guidance, even where the SSHD moves directly to revoke, where the Guidance provides no process of investigation. In my judgment that is not what the Court of Appeal intended. They were only dealing with the issue before them, as to whether a heightened duty of fairness imposed additional requirements compared to the processes in the suspension provisions.

123. Prestwick does, however, indicate that a qualification may be required to the reasoning in New Hope. While New Hope, at [105] suggests that common law fairness independently operates as a minimum in ways the Guidance cannot reduce, Prestwick shows the sponsorship scheme can shape fairness and even organically preclude the common law duty from adding additional requirements, in particular where the Guidance provides an existing process. However, that does not apply in a case, like the direct revocation situation, where the regime stipulates no specific process of charge and response at all. This difference does not affect the correctness of the result in New Hope.

124. The SSHD also relied on three other authorities: R (Manzay Ltd) v SSHD [2016] EWHC 2582 (Admin); R (Liral Veget Training Ltd) v SSHD [2018] EWHC 2941; R (Alpine Care UK Ltd) v SSHD [2026] EWHC 985 (Admin), as well as counsel’s note of an unreserved judgment in R (Real Social Care Solutions Ltd) v SSHD, AC-2026- BHM-000117. None were of real assistance.

125. As to his note of judgment in Real Social Care, Mr Howarth, who appeared in that case, informed me that it was an accurate note, although the Judge had declined to give a written judgment. I do not in any way doubt Mr Howarth, but I do not think it would be appropriate to pay regard to this note. No judgment has been approved by the Judge. It is a note taken by counsel for one side. Anyone who has taken such notes is aware of their imperfections. It would not be accessible to others. The Claimant was a litigant in person. For me to rely on it would add unhelpfully to the modern curse of the proliferation of authority. Judgment Approved by the court for handing down. R (Moon Fish) v SSHD 126. Similarly, Alpine Care is a decision on a renewed oral application for permission to proceed with judicial review, at which full argument was not heard, the standard hearing time being 30 minutes. It should not be cited given the principles of PD (Citation of Authorities) [2001] 1 WLR 1001, §6.2.

127. Liral Veget [50(i)], relying on Manzay, stated the duty of procedural fairness did not require the SSHD to specify what documents should be produced. But that was a fact- specific conclusion, not an articulation of general principle. Instead the relevant principles in Liral Veget [50(i)], [59] are: (1) SSHD has a duty within the Tier 2 scheme to give fair warning of her concerns and a fair opportunity to be heard on them in advance (in a case about revocation for mandatory grounds); (2) the extent of the duty depends on the circumstances. (3) The remaining duty of fairness within the Tier 2 scheme 128. I conclude that the duties of procedural fairness, and specifically the requirements to give fair warning of the gist of the SSHD’s concerns and a reasonable opportunity to make representations about them, are not precluded by the framework of the sponsorship scheme. Those requirements must normally be complied with, even where the SSHD is of the initial view that a mandatory ground of revocation is made out and is considering whether to proceed directly to revoke. Further, since there is a residual discretion, to which the seriousness of the “mandatory” ground is relevant, this should generally include a reasonable opportunity to be heard on the seriousness of the ground. This is so, even if the allegations relied on by the SSHD do not involve reprehensible conduct. Where the suspension pathway has been engaged, the provisions of C9.9 to C9.15 may generally provide a sufficient opportunity, provided the charges were adequately set out in the suspension letter. But where the SSHD is proceeding directly to revoke, and no such stipulated process exists, the common law duty will normally add a minimum framework.

129. This conclusion flows from the logic of the first instance authorities, in particular New Hope, TJ Trading, Blue Inn, and Liral Veget, and is consistent with Prestwick (CA). It also follows from the principles in section E(2) above: i) ii) iii) The decision to revoke is the kind of matter in respect of which the sponsor should generally be heard. Allegations of a mandatory ground to revoke are normally matters on which it will have something to say. Thus it is generally unfair for the SSHD not to put the gist of her concerns to the sponsor, or not to give a reasonable opportunity to respond (or to do neither), even where they involve a mandatory ground. The provisions of the Guidance relating to “mandatory” grounds do not purport to exclude this duty, nor in substance do they preclude it from arising. They allow for the SSHD to move direct to revocation “without warning”, but do not purport to say it will generally be fair to do so without the gist of her concerns first being put to the company. iv) Possibly immediate revocation without prior identification of concerns and an opportunity to respond might be appropriate in special cases – for example, perhaps where the mandatory breach and decision to revoke could not logically Judgment Approved by the court for handing down. R (Moon Fish) v SSHD v) vi) admit of any possibility of doubt, and so it was truly “inevitable”

that an opportunity to make representations was pointless. (However, cases of this latter kind will be rare as already explained.) Nor, in any event, could the possible existence of such exceptional cases justify a general disapplication of procedural fairness. The intensity of the application of the requirements of fairness is context sensitive and so affected by the framework of the scheme. Nevertheless, as Hill J said in TJ Trading [45], at least normally, “there is an irreducible minimum of information which a license-holder must be told if he is to have a proper chance to respond”. In Blue Inn the Court said that “the basic public law requirements of procedural fairness more generally do apply as usual” [65(v)]. I do not accept this logic follows only in cases of reprehensible conduct. Indeed, it would be odd if there was an obligation to put concerns and afford an opportunity for representations in cases of apparently evident dishonesty, but that such obligations would be precluded for more minor matters, which initially before a response appeared to fall within C1, but might well be capable of explanation or excuse. vii) While the SSHD pointed in argument to the administrative burdens that such duties might impose, no evidence was advanced to show that they would be impractical or even especially difficult to comply with. (4) The application of the duty of procedural fairness 130. I conclude that the essential charges the SSHD had in mind were not fairly put to MFL, and MFL did not have a fair opportunity either to address them, or to address the possible operation of the discretion not to revoke. Nor are there special facts which mean the SSHD did not have to comply with these requirements of procedural fairness in this case.

131. The SSHD relied on the email of 20 October. She argued that (1) by indicating that “We are looking into concerns that suggest your current sponsored workers may not be receiving a salary that matches the salary stated on their Certificate of Sponsorship”, and then referring to C1(aa), the gist of her concerns was sufficiently indicated. Further, (2) by doing so and asking for a list of specific documents “so that we may make an informed assessment”, MFL was given a fair opportunity to address the issues as to Mr Riaz’s salary. MFL should have considered the information it was providing; anticipated that the SSHD could take a point on the lesser payments to Mr Riaz; and therefore supplemented its documentary response by adding an explanation of those lesser payments and explaining its excuse for the failure to report. Not having received those explanations, it was procedurally fair for the SSHD to conclude without further enquiry that C1(aa) was satisfied and there had been a failure to report within C1(aa), which justified revocation.

132. In my judgment, this process was not sufficient, and the procedure adopted was unfair. On 20 October the SSHD said only that she was “looking into concerns” expressed in very abstract terms by reference to Annex C1(aa). Explanations were not sought, but only documents. The SSHD did not identify any particular underpayments which caused concern and a suspicion of breach. In the circumstances, the gist of the later Judgment Approved by the court for handing down. R (Moon Fish) v SSHD concern that there was a breach of Annex C1(aa) by reference to lesser payments to Mr Riaz was not put to MFL.

133. The SSHD’s case that MFL should, when faced with a general request for documents expressed in these terms, have addressed and explained in advance any particular concerns that those documents might suggest as to particular underpayments, amounts to saying that the SSHD did not need to put the gist of her concerns. I do not think the duties of procedural fairness are satisfied or displaced in this case, just because MFL might have guessed at what the SSHD’s concerns might be. It was not unreasonable for someone in MFL’s position to take the approach that this request for documents would be followed by a later identification of any specific concerns which the SSHD had, which could then be responded to, before any revocation decision. Further, the mention of Annex C1(aa) could have been understood to invite focus on changes of salary and the like, not unpaid leave otherwise legitimate under the scheme.

134. The unfairness is illustrated by the facts that (1) although an explanation of Mr Riaz’s situation was easily available, UKVI’s general request for documents did not in fact prompt MFL, acting in good faith, to realise that it was necessary or relevant to address the circumstances of the unpaid leave (see Section C3 above); and (2) as a result of UKVI’s method of proceeding, they deprived themselves of the most relevant information to understand the significance of the facts surrounding the underpayment with regard to Mr Riaz. For clarity, these illustrative consequences are not a necessary element of my findings of procedural unfairness, but they illustrate the way in which this kind of procedural approach can affect decisions.

135. The case is very different from Liral Veget, where the Court concluded that the SSHD did not have to identify all the relevant documents [50]. In that case, the SSHD had identified all its central concerns, but had not identified exactly what documentation might allay them: [29]-[36], [50]. That is different to the position here, where the concerns themselves were not identified at all.

136. In the circumstances, the consequence of not giving fair notice of the gist of the SSHD’s concerns was that MFL did not have a fair opportunity to make representations addressing the reasons for the lesser payment, the failure of reporting, and whether the discretion to revoke should be exercised.

137. Further, this is not a case of MFL being given fair notice of the SSHD’s concerns, and then failing to take the opportunity to respond. Instead, it is because the concerns were not properly identified with sufficient particularity, that it is not unreasonable that MFL did not identify them in advance as matters which it should respond to before they were clearly raised, and for that reason also that they were not in fact responded to. The SSHD did not dispute MFL’s evidence (SFG §21) that MFL did not realise from the SSHD’s 20 October email that it was relevant to address questions of agreed compassionate leave.

138. Contrary to the SSHD’s argument, this is not imposing a heightened duty of fairness. Instead, it follows from applying the basic requirements of fairness.

139. I do not think these requirements can be displaced by the context of the scheme, nor by special facts. I return to “pointlessness” and inevitability below. But leaving that to one side, requiring the SSHD to identify the gist of her specific concern to enable a response Judgment Approved by the court for handing down. R (Moon Fish) v SSHD before revoking, even for a mandatory breach, is not in my judgment inconsistent with the operation of the revocation provisions, nor the Guidance generally.

140. Nor would it, on the material I have, impose undue administrative burdens. I am conscious of the major administrative burdens on the SSHD in operating this scheme, and the need not to encumber it with extensive additional requirements. The Scheme must be capable of being operated efficiently. However, in the direct revocation situation there is no stipulated process of investigation which could occupy the field. No evidence was identified to show why it would have been unduly difficult here to send a short follow up email identifying the concern as to Mr Riaz and asking for an explanation, or why a similar general practice would create undue burdens. The other case law cited shows the SSHD engaging in much more detailed processes of charge and response on much more complicated, and much more apparently serious, sets of facts.

141. Thus even applying the approach that the SSHD is entitled to use a “light trigger” (which I am prepared to assume, without deciding the point, applies to procedural fairness as well as rationality in the context of this scheme), I conclude the SSHD here unfairly moved too fast by not identifying the gist of her specific concerns to MFL, and in turn not affording MFL an opportunity to respond, before moving to revoke. F. Misdirection 142. An objective misinterpretation of the Guidance can be a misdirection which vitiates UKVI’s decision, as UKVI is not applying the right test, or its reasoning involves a failure of logic. It can amount to irrationality, or taking into account irrelevant considerations. See Hartford [51], [61]; New Hope [16], [78]-[79].

143. In this case there was a misdirection because the Decision is based on the logic that a breach of Annex C1(aa) can be established by the fact of a lesser payment compared to the CoS combined with a failure to report. This assumes, or is logically only compatible with, a reading of C1(aa) in which any unreported lesser payment is enough, even if it is in itself due to permissible unpaid leave. But that is a misinterpretation as explained in Section B8 above. The first bullet point of C1(aa) is concerned with lower payments by way of changed salary, or the like, not with lower payments due to agreed unpaid leave. This is a misdirection of principle which vitiates the SSHD’s factual assessment. Alternatively, if C1(aa) were regarded as ambiguous, it was an error to proceed to revoke without consideration of the ambiguity.

144. The SSHD argued that, in the absence of an explanation for the discrepancies, it was rational to infer that a breach of Annex C1(aa) was made out. However, if as I have held Annex C1(aa) should be interpreted to require an unreported change of salary not just unpaid leave (under the first bullet point), or a breach of the guidance (under the second bullet point), then the SSHD would need to find breaches of those specific kinds and have a rational basis to do so. But first of all, this was not in fact the basis of the Decision, which reasoned from the mere failure to report and fact of underpayment to a breach of C1(aa). Second, in any event, UKVI would not have had any rational basis to conclude that there must have been a change of salary, or some lesser payment in breach of the guidance. It was just as possible (and as it happened, turned out to be the facts of the case, although the subsequent result is not necessary to my findings under this head) that there was some other explanation, such as legitimate unpaid leave which Judgment Approved by the court for handing down. R (Moon Fish) v SSHD had in error not been reported. UKVI had no rational basis to exclude this on the information they had. While a failure to report could give rise to concern and possibly a finding of breach of Annex C2(a), it could not rationally in itself justify a conclusion that Annex C1(aa) had been breached.

145. The SSHD sought at points to save the Decision by saying that it was sufficient to show that she had “reasonable grounds for suspecting that a breach of immigration control might occur”, relying on Raj and Knoll [21(6)]. However, I do not think that applies. The full quote is “(6) There is no need for UKBA to wait until there has been breach of immigration control caused by the acts or omission of a sponsor before suspending or revoking the sponsorship, but it can, and indeed should, take such steps if it has reasonable grounds for suspecting that a breach of immigration control might occur . . .”. That is concerned with assessments of the risk of future breaches of immigration control, which could fall for example within ground C2(ff). But the Decision was not based on that, nor on future risks at all (see §§16, 19).

146. This passage in Raj and Knoll is not intended to deal with decisions as to past breaches of the Guidance, and it does not say that an erroneous decision as to a past breach is lawful just because the SSHD had “reasonable grounds” for suspecting that a breach of the Guidance “might have” occurred. While the SSHD is the primary fact finder with a discretionary judgment, a breach must be found within one of the heads of the Annexes. Further, to justify revocation on the basis of a mandatory ground, the SSHD has to decide that the mandatory ground is made out, in a rational manner and based on a correct reading of the Guidance. A suspicion of future risks, even if reasonable, is not satisfaction of a mandatory ground. In any event, the SSHD did not base her decision to revoke on such suspicion, but on an actual finding of breach of C1(aa).

147. Finally, the SSHD cannot save the decision to revoke on the basis that it could have been justified under C2(a). As explained at Section D4 above, that was not in fact the basis of the Decision. An assessment of whether reporting failures under a non- mandatory ground like C2(a) might justify revocation under C10.5 and C10.6, would have looked very different. G. Tameside 148. The Tameside principle, arising from Secretary of State for Education v Tameside MBC [1997] AC 1014, imposes a duty of enquiry on the decision-maker where this is necessary to reach a rational decision. See the summary in Hartford [53], which is all that was originally cited to me.

149. In circumstances where I have upheld the procedural fairness challenge, I have concluded that it is not necessary nor desirable for me to resolve whether a Tameside duty was breached in this case: i) Tameside was briefly touched on at SFG §27 as part of the procedural fairness challenge, where it was said briefly that the SSHD had failed in her duty of enquiry. It was not pleaded as a distinct ground of challenge. It was not developed in MFL’s skeleton and no further authorities were cited, until the Court raised the question of whether it was being run. After that there was discussion of R (Plantagenet Alliance Ltd) v Secretary of State for Justice [2014] EWHC 1662, [99]-[100], which the Court had brought to the parties’ Judgment Approved by the court for handing down. R (Moon Fish) v SSHD attention. The SSHD objected that the point had been insufficiently pleaded. While it may have been rather vestigially pleaded at SFG §27, I consider that it was not pleaded nor later run in a way which allowed for it to be fully particularised and the authorities properly developed, inconsistently with Administrative Court Guide, §7.3.4. This created difficulties for the SSHD in responding, as well as for the Court in assessing the point. ii) The Tameside point in any event heavily overlaps with the procedural unfairness ground. It raises essentially the same point of

administrative conduct: was it right for the SSHD to proceed to revoke without first asking MFL for the answers to its concerns. Mr Fazli for MFL was initially content to treat the Tameside logic as part of his procedural fairness challenge. Neither party advanced arguments suggesting ways in which it would be likely to produce a different result. It is therefore not necessary, nor desirable, to lengthen this judgment by separately assessing the application of Tameside. H. Wider Rationality Challenge 150. I also do not think it would be necessary, or helpful, to address MFL’s wider rationality challenge (in SFG Ground (b)) as a separate set of points. The core of that challenge is that it was not reasonable to revoke on the basis of reporting failures only, or not reasonable to do so without considering what mitigating circumstances there might be. MFL’s rationality challenge has succeeded on the narrower bases of misdirection, or on the basis that the SSHD would not have had a rational basis to conclude that Annex C1(aa) on its correct interpretation was satisfied. The wider rationality challenge was not developed in MFL’s skeleton, beyond a cross-reference to the SFG, and only developed to a limited extent orally. To address the wider rationality challenge I would have to assume contrary to my conclusions that C1(aa) applies and/or that the Decision was based in the alternative under C2(a), and that the SSHD had acted fairly. That would be a difficult hypothetical mental exercise.

151. In addition, doing so would risk trespassing on the SSHD’s discretion. The consequence of my conclusions on the primary grounds is that the Decision will need to be quashed and remitted to the SSHD for reconsideration. In that context the assessment of the seriousness of the admitted reporting breaches, for example under Annex C2(a), and what, if any, sanction they deserve, should be for the SSHD in the first instance. It would not be helpful for me to address the seriousness of the breaches and the appropriate response to them in the abstract in advance of the SSHD’s further decision. I. Alleged Inevitability, Lack of Prejudice and s. 31(2A) 152. The SSHD argued: (1) The same result would have been “inevitable”, given the admitted reporting breaches, and so imposing the requirements of common law procedural fairness would be “pointless”; (2) For the same reasons, MFL has suffered no “prejudice” from any error, and so any error was immaterial. (3) It is “highly likely” the SSHD would have revoked even had these errors not occurred, so relief should be refused under Senior Courts Act 1981, s 31(2A). In substance this was the same point addressed under three frameworks. It will be convenient to consider first s. 31(2A) which sets the lower threshold. (1) Section 31(2A) does not apply Judgment Approved by the court for handing down. R (Moon Fish) v SSHD 153. Section 31(2A) provides that the Court must refuse relief “if it appears to the court to be highly likely that the outcome for the applicant would not have been substantially different if the conduct complained of had not occurred.” This can be “disregarded” if the court thinks it “appropriate” to do so for reasons of “exceptional public interest”: s. 31(2B), but no-one suggested that applied.

154. R (Bradbury) v Brecon Beacons NPA [2025] 4 WLR 58 (CA) [71]-[74] (quoted in R (Prestige Social Care Services) v SSHD [2025] EWHC 2860), explains: 70. Section 31(2A) of the 1981 Act provides that a court must refuse to grant a remedy on a claim for judicial review if it appears to the court that (1) it is highly likely (2) that the outcome for the claimant would not be substantially different (3) if the conduct complained of had not occurred. The outcome for the claimant is, usually, the decision or other measure that the public authority has taken. The ‘conduct complained of’… is the legal error or flaw which would justify the grant of a remedy in judicial review (unless a remedy was refused by reason of section 31(2A) or for some other discretionary reason).

71. In relation to s.31(2A) the court is concerned with evaluating the significance of the error on the decision-making process. It is considering the decision the public body has reached and assessing the impact of the error on that decision in order to ascertain if it is highly likely that the outcome (the decision) would not have been substantially different even if the decisionmaker had not made that error. It is not for the court to try and predict what the public authority might have done if it had not made the error. If the court cannot tell how the decision-maker would have approached matters, or what decision it would have reached, if it had not made the error in question, the requirements of s.31(2A) are unlikely to be satisfied. … 74 … [s.31(2A)] emphatically does not require the court to embark on an exercise where the error is left out of account and the court tries to predict what the public body would have done if the error had not been made. Approaching s.31(2A) in that way would run the risk of the court forming a view on the merits and deciding if it thinks that the public body would reach that view if it had not made the error. Rather, the focus should be on the impact of the error on the decision-making process the decision-maker undertook, to ascertain whether it is highly likely that the decision the public body took would not have been substantially

different if the error had not occurred.” 155. Bradbury also quotes R (Plan B Earth) v Secretary of State for Transport [2020] EWCA Civ 214 (overturned on other grounds in the Supreme Court): 272. The new statutory test modifies the Simplex test in three ways. First, the matter is not simply one of discretion, but rather becomes one of duty provided the statutory criteria are satisfied. This is subject to a discretion vested in the court nevertheless to grant a remedy on grounds of ‘exceptional public interest’. Secondly, the outcome does not inevitably have to be the same; it will suffice if it is merely ‘highly likely’. And thirdly, it does not have to be shown that the outcome would have been exactly the same; it will suffice that it is highly likely that the outcome would not have been “substantially different” for the claimant. Judgment Approved by the court for handing down. R (Moon Fish) v SSHD 273. It would not be appropriate to give any exhaustive guidance on how these provisions should be applied. Much will depend on the particular facts of the case before the court. Nevertheless, it seems to us that the court should still bear in mind that Parliament has not altered the fundamental relationship between the courts and the executive. In particular, courts should still be cautious about straying, even subconsciously, into the forbidden territory of assessing the merits

of a public decision under challenge by way of judicial review. If there has been an error of law, for example in the approach the executive has taken to its decision-making process, it will often be difficult or impossible for a court to conclude that it is ‘highly likely’ that the outcome would not have been ‘substantially different’ if the executive had gone about the decision-making process in accordance with the law. Courts should also not lose sight of their fundamental function, which is to maintain the rule of law. Furthermore, although there is undoubtedly a difference between the old Simplex test and the new statutory test, ‘the threshold remains a high one’ (see the judgment of Sales LJ, as he then was, in R (Public and Commercial Services Union) v Minister for the Cabinet Office [2017] EWHC 1787 (Admin); [2018] ICR 269, para 89).

156. The SSHD advanced two main arguments to support the conclusion that it was “highly likely” that the SSHD would have reached the same decision, even without the errors. First, the admitted reporting breaches justified revocation. Second, the SSHD’s PAP Response is good evidence that the same result would highly likely have followed in any event, and indeed shows it would have inevitably followed.

157. It is clear to me that the SSHD has not shown that it is “highly likely” she would have reached substantially the same decision, and revoked MFL’s licence, even if the procedural unfairness and misdirection errors had not occurred: i) ii) iii) It is evident that the unfairness and the misdirection had an important impact. They meant the SSHD (a) did not know the lesser payments had a legitimate explanation; (b) decided to revoke in the belief that a “mandatory” ground was made out. The relevant comparator if the errors had not been made is a situation where the SSHD proceeded on the basis that (a) there was a single 2-month period of unpaid leave, on compassionate grounds, for one worker, which in itself was legitimate within the Guidance, and had been explained by MFL; (b) this was not a breach of C1(aa); (c) MFL had failed to report that unpaid leave of more than 4 weeks, in breach of the Guidance, but had explained that this was due to a good faith oversight; (d) no other compliance issues had been identified; (e) whether to revoke would be being considered under C2. In that situation there could be reasons not to revoke under C2, which are at the least plausible, including (a) the Guidance principally aims revocation at serious issues or issues indicative of systematic failings; (b) the breach was minor and in good faith (see Section C3 above) and it had not been shown

it was indicative of a systematic failings. For clarity I do not say, and do not need to say, that those reasons are correct or should have prevailed, but they are realistically points which could have been part of the SSHD’s reasoning, had she been approaching the matter absent the errors. Judgment Approved by the court for handing down. R (Moon Fish) v SSHD iv) While I do not, and should not, predict or assess what decision the SSHD would or should have reached, I conclude there was at least a very real prospect that absent the errors she would not have revoked, and would instead have suspended and then applied some other sanction. Those prospects were at least sufficiently likely that it cannot be said it is “highly likely” that the SSHD would have reached substantially the same result anyway.

158. Even if, contrary to my finding on misdirection, there was a breach of Annex C1(aa), I would still conclude that s. 31(2A) was not made out. I do not accept it can be shown that it is “highly likely” that the SSHD would have reached substantially the same result but for the procedural unfairness. Even if there is a mandatory ground of revocation, there is a residual discretion, to which the seriousness of the breach is centrally relevant. On the undisputed facts, which the SSHD would have been aware of had the procedural unfairness not occurred, the breaches followed from a good faith error of reporting as to one worker, in relation to unpaid leave that was itself legitimate. Even if the breaches fell within C1(aa), there would have been real prospects that they would have been regarded as not sufficiently serious or indicative of systematic concerns to justify revocation. Further, while the SSHD would not have been obliged to consider the impact on the workers, this could have been taken into account. Thus, there would have been real prospects, of at least sufficient likelihood to preclude revocation being “highly likely”, that she would not have revoked, nor reached a decision in substantially the same terms.

159. The SSHD did not provide any evidence that it was in practice her policy or practice to revoke in situations of a limited reporting breach like this. (2) The PAP Response 160. I do not think the SSHD’s PAP Response leads to any different conclusion. It is true that in that PAP Response, the SSHD having heard MFL’s explanations re-affirmed her decision. However, the PAP Response must be considered with care, because it is framed in a context where the SSHD is acting defensively and may well have entrenched views. Thus, even if the PAP Response had clearly explained that the same decision would have been reached in any event, caution would have been required before accepting that at face value.

161. It is significant that no evidence was put in by the SSHD to support a case that it was “highly likely” that substantially the same result would have been reached. As Sales LJ said in R (Harvey) v Mendip DC [2017] EWCA Civ 1784, [47]: Although a court will be appropriately careful in reviewing evidence produced by a decision-maker long after the decision to say how they would have proceeded in the sort of hypothetical scenario on which application of section 31(2A) depends, and will evaluate it carefully in light of the contemporaneous materials in the case, it is nonetheless telling that none of the decision-makers in this case have felt able to put before the court any witness statements to support the contention that they would have granted outline planning permission for the development even if they had appreciated that it was in breach of the Local Plan. In the absence of submissions and evidence from the Council, I simply do not know whether the decision-makers on the Planning Board would say there were Judgment Approved by the court for handing down. R (Moon Fish) v SSHD material considerations which might have caused them to think it right to depart from the Local Plan and if so what those considerations were. 162.

163. In this case, the PAP Response contains no sufficiently clear statement that the same result would have been reached in any event. The SSHD at no point says that, if MFL’s explanations had been initially available, she would have reached the same decision. Nor does she say that on the facts as stated by MFL, revocation would be appropriate. Nor is it clearly said that the failure to report would itself have been sufficient to justify revocation independent of C1(aa). Instead, while the failure to report is relied on (§iv, xii, xxvii and elsewhere), it is central to the reasoning that MFL’s initial response could have but did not provide the relevant explanations (§iii, vii, xi, xiii, xxix), and that the way the SSHD proceeded is not unfair (§xvi). At §xv it is stated: “the revocation decision was therefore founded on the absence of the required salary payments and your client’s lack of mitigating evidence.” 164. The closest the PAP Response comes to saying that the reporting failures would in any event have justified revocation is at §xix, where it is said: The SSHD’s decision was not solely on underpayment but also on your client’s failure to report and explain the absence as required. Whilst you also note that your client misunderstood their reporting duty, believing it only applied to unauthorised absences, this omission was a substantive breach, not just an administrative oversight. The reporting failure is treated by Sponsor Guidance as a significant compliance issue as your client only took remedial action after the concerns were raised with them, however, they still failed to provide adequate reasons after being afforded opportunities prior to the decision.

165. However, this does not assert the reporting failure would have independently justified revocation, only that it was in itself a significant substantive breach. But not all breaches, even significant ones, will necessarily justify revocation. Further, the reasoning depends on the view that it was wrongful for MFL to fail to provide explanations in response to the email of 20 October, which I have concluded is an unfair approach.

166. At §§xxii to xxv, the SSHD relies again on the failure to report, which is called a “substantive compliance failure” (§xxiv). But she does so in the context of a conclusion that the finding of breach of C1(aa) was justified because there was clear evidence of this, combined with the failure to report and the asserted failure to respond with proper explanations to the email of 20 October (§§xxii, xxiv). What is not said is that the failure to report would independently have justified revocation. Further, the reasoning is again dependent on the conclusion that not providing full explanations in response to the email of 20 October was wrongful and in itself part of the justification of the conclusion of breach. Yet, again, I have concluded it was unfair for the SSHD to proceed to revoke because of the absence of detailed explanations in the response of 3 November, without asking further questions. Similar points apply to §§xxvii-xxx, and xxxi to xxxiii.

167. The PAP letter concludes with a section on “reconsideration” (§§xxxiv to xxxix). In that section, however, the SSHD does not say that the failure to report was in itself sufficient to justify revocation. Instead, again, the reasoning depends on a combination of matters including the breach of reporting (§xxxvi) but also including the alleged Judgment Approved by the court for handing down. R (Moon Fish) v SSHD failure to submit requested explanations, which I have found is an unfair approach (§§xxxvi, xxxvii), and also the proposition that the unpaid salary was within C1(aa). The key paragraph is §xxxviii, which says: “The Sponsor Guidance authorises immediate revocation in cases of serious infractions, such as unpaid salary, without the necessity for lesser sanctions. Your client’s failure to respond and address non- compliance constituted substantive violations rather than minor errors.” However, this (a) is dependent on the conclusion that C1(aa) is satisfied by unpaid leave; (b) does not say that the reporting failures in themselves would have justified revocation; (c) instead of saying the failure to afford an opportunity to respond was irrelevant, because it did not matter, instead turns the failure to respond with detailed explanations to the email of 20 October into a “substantive violation” in itself. This reconsideration cannot stand independently of the errors found in this judgment.

168. Thus, instead of saying that the alleged errors did not affect the decision, the essence of the SSHD’s PAP Response is to double down on the approach in the Decision, and to say that the very approach which I have concluded above is procedurally unfair in fact reinforces the Decision.

169. The PAP Response does not show it is highly likely that the SSHD would have reached substantially the same result but for the Decision. (3) Immateriality, No Prejudice, Pointlessness and Immateriality 170. This reasoning also deals with the arguments that the grounds of challenge should fail at common law because the errors were “immaterial” and/or MFL was not “prejudiced”, and/or imposing procedural fairness would be “pointless”. All these amount to much the same thing: the reason advanced by the SSHD for the alleged immateriality and/or pointlessness is that the errors did not affect the decision, and the same decision would have “inevitably” followed even without them. Likewise, the SSHD’s case on no prejudice was based solely on the proposition that the errors did not affect the result, and the same result would have followed, not on any independent ground of lack of prejudice.

171. The law on inevitability and pointlessness, and absence of prejudice, is set out at paragraph 106 above. In a case of this kind, this requires a high standard, encapsulated where the question is whether the errors affected the result, by the requirement that the same result would have been “inevitable”. Thus, as the Court said in R (Grinham) v Parole Board [2020] EWHC 2140 (Admin) [52]-[53], it is only in the “very plainest of cases” that the Court would conclude that fairly putting the gist of the authority’s concerns, and affording an opportunity to make representations, would have made no difference.

172. In turn, New Hope [111], followed in TJ Trading at [91], explains that if s. 31(2A) was not satisfied, in a case turning on the inevitability of the result, the same result would follow a fortiori when considering parallel arguments of immateriality, no prejudice, or pointlessness/inevitability at common law.

173. Consequently, my conclusion under s. 31(2A) that there are real prospects that but for the errors the SSHD would have reached a different result, also defeats the case that the same result would have “inevitably” followed. In turn the requirements of fairness were not pointless and the errors were not immaterial. Instead they were significant, affected Judgment Approved by the court for handing down. R (Moon Fish) v SSHD the result, and caused injustice. In relation to prejudice, if this is treated separately, the same applies. MFL was prejudiced by the errors, since the errors were material, clearly impacted the SSHD’s decision, and but for the errors, the SSHD might well not have revoked. J. Conclusion and relief 174. I therefore conclude that the SSHD’s decision to revoke was flawed, and must be quashed. The decision will be remitted to the SSHD for reconsideration under Senior Courts Act 1981, s. 31(5)(a).

175. The parties have agreed terms of an Order giving effect to this judgment, which I will make subject to limited modifications for clarity and precision.