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Are Your Claw-Back Clauses Compliant With UK Immigration Laws? Navigating the Latest Sponsor Licence Changes

From December 2024 and January 2025, significant changes have been introduced to the UK Sponsor Licence Guidance, and claw-back clauses in employment contracts have been in the spotlight. These changes are critical for employers sponsoring skilled workers under the UK immigration system, as non-compliance could result in severe penalties, including the suspension or revocation of your sponsor’s licence.

A claw-back clause allows employers to recoup certain costs associated with sponsorship and visa applications if an employee leaves their role prematurely. While these clauses can protect your company’s financial investment, the updated guidance introduces strict limitations to ensure fairness and compliance with UK immigration law.

Key questions to consider:

• Are your claw-back clauses clearly defined and legally enforceable?
• Are you aware of the costs you can and cannot recover from employees?
• Is your company prepared for a Home Office audit?

Employers would need to clearly define which costs can be recovered through a claw-back clause. Employers would typically include claw-back provisions for:

• Relocation expenses
• Sign-on bonuses
• Recruitment fees
• Specific training costs
• Visa and immigration costs
• Professional membership fees

Employers must ensure that these costs are reasonable and directly related to the employee’s role, and employment contracts must clearly set out the circumstances in which claw-back provisions apply, the specific costs that can be recovered, and the timeframe and method of recovery.

The newly updated guidance now explicitly prohibits employers from recouping the following costs from employees:

• Immigration Skills Charge (ISC)
• Certificate of Sponsorship (CoS) fees
• Sponsorship licence fee and ‘associated administrative costs’

These costs are considered to be the responsibility of the employer and cannot be passed on to the employee, even indirectly. The main concern revolves around associated administrative costs. According to the official guidance and the Sponsorship Management System, these costs definitely include priority service fees, which employers are not allowed to recover. In addition, following consultation with the Home Office, legal fees associated with sponsorship must also be covered by the employer.

In the case of newly established companies, even if the founder or entrepreneur initially pays for the legal and administrative costs personally, the application for a sponsorship licence and the associated fees must ultimately be paid by the company. This ensures compliance with government regulations and helps to avoid potential audit issues.

Employers need to review their existing employment contracts and sponsorship policies to ensure they comply with the updated guidance. Failure to do so could result in the suspension or revocation of their sponsorship licence. In addition, clear and transparent communication with both current and prospective skilled workers is crucial. Employers should provide detailed information on claw-back clauses and their implications, and ensure that employees fully understand their rights and obligations.

At Quastels, we specialise in corporate immigration and employment law, and offer tailored solutions to help employers navigate these changes with confidence. Our services are designed to ensure your business remains compliant while protecting your investment in global talent.

For further assistance or to arrange a compliance review, please contact our team. We are here to help you navigate these changes and ensure your sponsorship practices remain robust and compliant. Let us help you protect your business and your employees.

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Judicial Review in Immigration Law: Challenging Unfavourable Home Office Decisions

The UK’s immigration system is among the most intricate legal frameworks in the world, with the Home Office adjudicating thousands of visa and settlement applications annually. While many are granted, a substantial proportion are refused- sometimes even erroneously or unfairly. In 2022, over 50% of immigration judicial review claims that proceeded to a substantive hearing were either successful or settled in favour of the applicant. This statistic underscores the fallibility of the Home Office decision-making and the crucial role of Judicial Review (JR) in ensuring that administrative actions adhere to principles of legality, rationality, and procedural fairness.

For individuals, families, and businesses adversely affected by flawed Home Office decisions, Judicial Review can be a powerful legal remedy. However, it is not an appeal and does not re-evaluate the merits of an immigration application. Instead, it scrutinises the decision-making process to determine whether it was lawful, reasonable, and procedurally sound.

At Quastels, we have successfully represented clients in challenging Home Office decisions through Judicial Review, securing rightful reconsideration and redress for those treated unfairly under the immigration system.

What is Judicial Review?

Judicial Review is a mechanism by through which the courts assess whether a public authority, such as the Home Office, has acted within the bounds of the law. Unlike an appeal, which examines whether a decision was correct in substance, JR focuses on whether the decision was made in a legally permissible manner. The grounds for Judicial Review typically include:

• Illegality– Where the Home Office has acted beyond its statutory powers or misapplied the law.
• Irrationality (Wednesbury Unreasonableness)– Where a decision is so unreasonable that no rational authority could have arrived at it.
• Procedural Impropriety– Where the decision-making process was fundamentally flawed, for example, through failure to consider relevant evidence or to provide the applicant with an opportunity to respond.

When is Judicial Review Necessary?

Judicial Review is particularly relevant in cases where no statutory right of appeal exists or where all other legal avenues have been exhausted. It may be appropriate in instances such as:

• Visa refusals with no right of appeal or administrative review.
• Unlawful delays- when the Home Office has failed to make a decision within a reasonable timeframe.
• Deportation and removal orders that lack a sound legal basis.
• Indefinite Leave to Remain (ILR) refusals based on erroneous grounds.
• Unjust revocation of sponsor licences, adversely affecting businesses and skilled migrant employees.

Case Law: A Landmark Precedent in Immigration Judicial Review

A seminal case in this area is R (Balajigari) v Secretary of State for the Home Department [2019] EWCA Civ 673, where the Court of Appeal ruled that the Home Office had acted unlawfully by refusing visa applications on grounds of alleged dishonesty without affording applicants an opportunity to respond. The ruling reinforced a fundamental legal principle: decisions affecting immigration status must be procedurally fair, particularly when adverse findings could have severe consequences for applicants. This case illustrates the vital role of Judicial Review in holding the Home Office accountable.

The Judicial Review Process: A Step-by-Step Guide

1. Pre-Action Protocol (PAP) Letter
   • Before initiating formal proceedings, the applicant must submit a Pre-Action Protocol (PAP) letter to the Home Office.
   • This letter outlines the grounds for challenge and requests reconsideration.
   • The Home Office has 14 days to respond, potentially resolving the issue without litigation.
2. Issuing Judicial Review Proceedings
   • If the Home Office refuses to reconsider or fails to respond, a Judicial Review application is lodged with the Upper Tribunal (Immigration and Asylum Chamber) or the Administrative Court (High Court), depending on the nature of the case.
3. Permission Stage
   • The court conducts an initial assessment to determine whether the claim has sufficient legal merit.
   • If permission is refused, the applicant may request an oral hearing to argue their case in person.
4. Substantive Hearing
   • If permission is granted, a full hearing is conducted before a judge.
   • The court examines whether the Home Office’s decision was lawful and procedurally sound.
   • If the challenge is successful, the court may quash (invalidate) the decision and order the Home Office to reconsider it in accordance with the law.
5. Potential Remedies
   • The court does not grant immigration status directly but compels the Home Office to reassess the case lawfully.
   • In some cases, costs may be awarded if the court finds the Home Office acted unlawfully.

Critical Considerations Before Pursuing Judicial Review

• Time Sensitivity
  • JR applications must be lodged promptly, and no later than three months from the date of the impugned decision.
  • For urgent cases—such as imminent removal orders—applications must be made immediately, often accompanied by an injunction request.
• Strength of Legal Grounds
  • Judicial Review is not an opportunity to present new evidence or re-argue an immigration application. It is strictly a procedural challenge based on whether the decision was legally flawed.
• Costs and Litigation Risks
  • udicial Review can be costly, and unsuccessful applicants may be ordered to pay the Home Office’s legal costs.
  • However, where the challenge is well-founded, a successful outcome can overturn an unjust decision and provide a path to securing immigration status.

Exploring Alternative Remedies

Before pursuing Judicial Review, applicants should explore whether alternative legal remedies are available:

• Administrative Review – Certain refusals (e.g., Skilled Worker visa rejections) can be reconsidered internally by the Home Office through an administrative review, which may be a quicker and less costly alternative.
• Reapplication – In some cases, submitting a fresh application with stronger supporting evidence may be more effective than litigation.

How Quastels Can Assist

At Quastels, we are acutely aware that Home Office decisions can have profound consequences for individuals, families, and businesses. Our specialist immigration team offers:

• Strategic legal advice on whether Judicial Review is the appropriate course of action.
• Meticulous drafting of Pre-Action Protocol letters, often leading to resolution without litigation.
• Expert representation in the Upper Tribunal and Administrative Court.
• Urgent injunction applications in deportation and removal cases.

We are committed to ensuring that our clients receive fair and lawful treatment under the immigration system. If you have been subject to an unjust Home Office decision, it is imperative to act swiftly.

Contact Quastels today to discuss your case and explore your legal options.

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Docusign | How-To Guide

During the conveyancing process, your solicitor/conveyancing executive will ask you to sign a document(s) using Docusign. Below is a simple guide that takes you through the stages of setting up a witness and electronically signing the document(s). 

1. Client Receives Email From Docusign (/Infotrack)

Your solicitor/conveyancing executive will set up the signature request, and you will receive an email from Docusign titled  ‘Request for Witness Details.’ 

Please ensure to read the email in full to understand the witness nomination rules, and how to carry out your signing as swiftly and efficiently as possible. All parties involved in the transaction will be sent separate emails with invitations to sign (e.g. a husband and wife purchasing a property together will have to complete this process individually, via the invitations sent to their respective email addresses).

2. Start Signing Process

Click the blue ‘Start Now’ button at the bottom of the Docusign email.

3. Nominate A Witness

In order to sign, you must nominate a witness. All parties can use the same witness however, the witness must be in the physical presence of the signees, must not be related to the signee(s) (for example, your mother/father in law could not be a witness), the witness must also be over 18, and must not be partied to the transaction in any way (ie. giftor). 

4. Enter Witness Details and Sign

Enter all required witness details on the left-hand side and once all details have been correctly entered, select the orange ‘Nominate Witness’ button. Once you have successfully appointed your witness, you will be able to proceed with signing the relevant documents. When signing has been completed, please select ‘Finish.’

5. Witness Signs the Documents

At this point, your witness will receive an email from Docusign inviting them to confirm that they witnessed the parties signing. The witness must click the ‘Review Document’ button on the email (you might need to ‘download external images’ in order to see and click this button).

Your witness will need to authenticate their telephone number. Once that is done, the witness will be able to open the document, to confirm T&Cs, and select ‘Continue.’

The witness must then select the ‘Sign’ tab to finalise your signature.

Once all information has been auto-filled, please select the ‘Finish’ button at the top of the page. 

Please note, In order for your solicitor to receive the final and completed documents, all parties involved in the transaction and witnesses must have completed all tasks.

6. Signatures Complete

Once all parties have signed, your solicitor will receive a copy of the completed documents. 

If you have any queries during this process, please do get in touch with your solicitor or conveyancing executive. 

If you require legal assistance for the purchase or sale of a property, please contact our Residential Real Estate team. 

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