When a business that holds a sponsor licence is acquired, merges with another entity, or transfers part of its operations under TUPE, the immigration implications for sponsored workers can be significant. A sponsor licence is not transferable between legal entities. If the employing entity changes as a result of a corporate transaction, the new employer will need its own sponsor licence to continue employing the sponsored workers lawfully. Without this, sponsored workers may find themselves working without valid sponsorship, which can affect their visa status and expose the employer to civil penalties.
The interaction between TUPE and immigration law requires careful planning from an early stage in any transaction. The timeline for obtaining a new sponsor licence must be factored into the deal structure. There are circumstances where the Home Office may take a pragmatic approach to continuity of sponsorship during a transition, but this cannot be assumed and requires specific advice based on the structure of the transaction. Key personnel changes that come with a corporate restructure also need to be reflected in the SMS promptly.
NARA Solicitors works alongside corporate and employment law teams on transactions involving sponsored workers. We advise on the immigration risks at the due diligence stage, help plan the licence transition, prepare new licence applications where required, and advise on managing the sponsored workforce through the transition period. If a transaction has already completed and the immigration position has not been addressed, we can advise on how to regularise the situation and reduce the risk of compliance action.
