Background
Moon Fish Limited held a licence to sponsor skilled workers and employed three sponsored workers. One worker, Mr Riaz, took unpaid compassionate leave from 27 April to 22 June 2025, resulting in payments during May and June that were £3,560.51 below his headline salary. The reduced payment and leave were lawful and did not themselves breach the sponsorship rules, but Moon Fish accepted that it failed to report the absence as required.
After requesting employment and salary records, the Home Office revoked Moon Fish’s sponsor licence with immediate effect on 18 November 2025 without asking the company to explain the apparent underpayment. Moon Fish later explained that the difference resulted from legitimate unpaid leave and that the reporting failure was an innocent oversight. The Secretary of State declined to reverse the decision, and Moon Fish sought judicial review.
The Court’s Holding
The High Court quashed the revocation decision. It held that the Secretary of State had acted procedurally unfairly by revoking the licence without first putting the concern about the apparent underpayment to Moon Fish and giving it a fair opportunity to explain. The documents originally requested did not call for that explanation, and the later reliance on Moon Fish’s failure to volunteer mitigating information could not cure the unfairness.
The decision was also affected by a misdirection concerning the mandatory revocation ground in Annex C1(aa) of the sponsor guidance. On the correct approach, the legitimate unpaid leave did not establish that ground merely because Moon Fish had failed to report it. The court left it to the Secretary of State to reconsider the admitted reporting breach, including its seriousness and any appropriate sanction, under the relevant discretionary provisions.
The court rejected the Secretary of State’s argument that relief should be refused under section 31(2A) of the Senior Courts Act 1981. It was not highly likely that the outcome would have been substantially the same without the errors: the case involved one legitimate period of unpaid leave, a claimed good-faith reporting oversight, and no identified additional compliance problems. The matter was remitted for lawful reconsideration.
Key Takeaways
- Before revoking a sponsor licence on an unexplained factual concern, the Home Office may be required to disclose the gist of that concern and allow the sponsor to respond.
- A failure to report legitimate unpaid leave does not necessarily convert the leave or resulting reduced payment into a mandatory ground for revocation.
- A court will not withhold judicial-review relief merely because the authority could reach the same result on reconsideration; the statutory test requires the same outcome to be highly likely absent the legal errors.
Why It Matters
The judgment underscores that the sponsor-licensing regime’s strict reporting obligations do not displace common-law fairness. Immediate revocation can seriously affect both an employer and its sponsored workers, so the Home Office must accurately identify the applicable ground and fairly investigate an apparent breach before imposing that sanction.
The ruling does not excuse Moon Fish’s admitted reporting failure or dictate the sanction on remittal. It requires the Secretary of State to reconsider the case on the correct legal basis, taking account of the company’s explanation and exercising the discretion available under the guidance.