Under the new rules introduced by the Immigration Asylum and Nationality Act 2006, workers coming to the UK from outside the European Economic Area are subject to a points-based immigration system, under which most workers have to be sponsored in order for their application to be successful. Organisations have to be licensed by UKBA to sponsor migrants to come and work in the UK under this system. Immigrant workers need a job offer from a licensed employer and to be able to demonstrate that they have the requisite amount of points. In addition, licensed sponsors have to prove that they cannot fill skilled posts with resident workers and must show that the job vacancy has been advertised in the United Kingdom.
The new guidance sets out that if a licensed sponsor takes over an organisation that is not a licensed sponsor, the sponsor must inform UKBA within 28 calendar days. If a licensed sponsor is taken over by a company that is not a licensed sponsor, then the existing sponsor must tell UKBA about the takeover, and the new organisation must apply for a sponsor licence, within 28 calendar days. If the new organisation fails to apply for a licence, the permission for all sponsored migrants who have transferred to stay in the UK is likely to be reduced to 60 calendar days to allow them time to find a new sponsor, as they will no longer be working for a licensed sponsor.
If both companies are licensed sponsors, then both companies must tell UKBA about the takeover within 28 calendar days. The organisation that was taken over must state who now has responsibility for its respective migrants; and the organisation that took over must tell UKBA about the migrants that it has taken responsibility for.
These obligations must be considered alongside the obligation of the transferee to check the documentation relating to transferred employees to ensure that no illegal workers have transferred within 28 days of the transfer.
Editor’s Note: Unfortunately, these obligations will increase the cost of conducting due diligence and the post acquisition administrative processes. To minimize risks, transferees will need to address their minds to these obligation when conducting due diligence. Where possible, the checks should be done before the transfer and appropriate warrantees and indemnities must be obtained.