Mergers & Acquisitions: Corporate Immigration Compliance – Work Visas

In nearly all corporate transactions, a business needs to take
action to remain compliant as a sponsor to avoid the risk of having
your sponsor licence being downgraded or even revoked which can
have a devastating impact on a business and their sponsored
migrants who can have their visas curtailed to 60 days. In addition
to the compliance duties, the organisation must also consider its
obligations under the prevention of illegal working
regime. In this article, Usof Shah provides an overview into
the steps to take when a corporate transaction takes place to avoid
risk of compliance action or being fined for employing individuals
who do not have the right to work in question.

How will a corporate transaction impact your sponsor
licence? 

Sponsor licences are not transferrable between organisations.
How a corporate transaction will impact your sponsor licence will
depend on whether:

• there is a change in direct ownership




• you sell all or part of or the controlling number of shares in
  your business




• you are partly or wholly taken over by another business




• the business is being split into separate legal entities

If a business is sold as a going concern, resulting in a change
of ownership, its sponsor licence will either be revoked or made
dormant if sponsored workers have been transferred to the new
employer’s sponsor licence. 

How will a corporate transaction impact your sponsored
migrants?

As a result of a corporate transaction sponsored migrants do not
need to submit a new visa application and the new employer does not
have to assign a new Certificate of Sponsorship to them, provided
appropriate action has been taken by the business unless the move
involves migrants who does not have TUPE or similar protection.

Acquiring sponsored migrants under TUPE

If the acquiring company already holds a sponsor licence,
then they are required to report the acquisition within 20 days of
the corporate transaction taking place. Where TUPE is
triggered, or a similar arrangement exists, and sponsored migrants
are transferred to the acquiring company, then the new employer
will assume full responsibility for the migrant workers from the
date of the transfer.

To lawfully employ the transferring migrant workers, the new
employer must either already hold a valid sponsor licence to
sponsor the transferring migrants or the new employer must submit
an application for a sponsor licence, again within 20 days post
completion of the corporate transaction.

If a business fails to take this action and allows transferred
migrant workers to carry on working on their current visa
conditions, it can result in not only the migrant workers visas
being curtailed to 60 days, but it will also mean that the migrant
workers would be working illegally and for each illegal worker your
business can receive a fine of up to £20,000.

There are corporate transactions where just a report needs to be
made to the Home Office and no further action is required following
a restructuring.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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