Understanding the impact of redundancy on a sponsored worker's visa

The last few months has seen a big spike in the number of job cuts - or layoffs – especially in the global tech sector. Tens of thousands of workers have faced job cuts. Redundancies are always incredibly difficult for everyone involved, especially the affected employees. But it's easy to miss that there are extra considerations for employees that are in the UK on sponsored work visas.

Not all visas are sponsored - many workers have personal immigration status that's unaffected by leaving one specific employer. Examples of personal status include anyone with settled or pre-settled status through the EU Settlement Scheme, a partner visa, Youth Mobility visa, UK Ancestry visa, High Potential Individual visa, or Graduate visa. Sponsored visas are typically called 'Skilled Worker' or its predecessor 'Tier 2 General'. Sponsored intra-company transfer visas are usually labelled 'Global Business Mobility: Senior or Specialist Worker', or its predecessors 'ICT' or 'Tier 2 ICT'. Most sponsored workers are employees of the sponsor, but that's not always the case – for example self-employed partners in a partnership can also be sponsored.

The immigration status of a sponsored worker is tied to one sponsoring organisation - it’s not a general right to work in the UK. Redundancies are a deeply worrying time for anyone affected. But an unexpected job loss may cause additional anxiety for sponsored employees, because they’ll be worried about their ongoing ability to work in the UK and whether they’ll be forced to leave the UK. So, when the UK employment of a sponsored worker ends - including if the job cuts result in the early termination of a secondment so the worker leaves the UK to return to an overseas group office - what do sponsoring employers have to do, and what can they do to help affected employees? 

Reporting end of sponsorship 

If a sponsored worker’s employment terminates before the visa end date, the sponsor must report the end of sponsorship to the Home Office within 10 working days of the termination date. That mandatory sponsor obligation applies whatever the reason for exit - not just to redundancies - so for example will also apply on a voluntary resignation. Reporting must be done online through the Sponsor Management System (SMS) by a Level 1 User, also providing last known contact details of the worker.

Once reporting has been done, the sponsoring employer‘s duties are over, other than to retain access to sponsorship personnel records. They must be available for inspection for one year from termination, or until reviewed by the Home Office at an audit if sooner. 

Consequences for the worker 

Like H1B visas in the US, the end of UK sponsored employment starts a clock running for the worker to seek new immigration status, to avoid having to leave the country. It’s a concerning time for any workforce facing redundancies - and even more so for sponsored workers and any family members. One thing that employers can do to help is to provide departing sponsored workers with information about the immigration issues. That’s not a legal obligation but can be welcome support - as often sponsored employees are unaware of the exact restrictions on their status and the impact of termination on their visa. 

Right to work

Once termination of employment is effective, the worker’s right to work in the UK ends on the last day of employment, even if there’s still months or years left on the visa. Until new immigration permission is granted, the individual cannot work in the UK. There’s no way to avoid that prohibition with alternative solutions. So for example working as a self-employed contractor or freelancer (rather than an employee), being employed or paid by an overseas company rather than a UK company, or even working for a business on an agreed temporary unpaid basis while still on the original sponsored visa, does not allow the worker to work in the UK.

Supplementary employment rights, allowing up to 20 hours per week of work for another business in some cases, also end automatically when the main sponsored employment ends. But there’s no UK immigration issue if work is performed remotely outside the UK for a UK company. Obviously, the worker would need immigration status in the country that they work in, and those on Skilled Worker visas would need to assess the impact of absence from the UK on their settlement rights.  

Visa cancellation

As sponsored status is tied to skilled work with one specific organisation, termination of sponsorship may lead to cancellation of the visa. If there’s still time to run on the original visa and the individual has not already applied for alternative UK permission to stay, the Home Office will process the employer’s end of sponsorship notification and write to the worker. Unless there’s a reason to exercise discretion, such as pregnancy or ill-health, the Home Office will give the worker 60 days' notice to either apply for new immigration status or to leave the UK. If the worker does not take either step by the end of the 60 days, their visa and right to remain in the UK will be cancelled.

The unknown timing is the gap between the sponsor‘s termination notification and the Home Office sending the 60-day notice. It could be immediate – and the worker should plan for the period only being 60 days from termination – but it can often be weeks or months before it’s sent. So, the minimum period that sponsored workers have to apply for new status is 60 days from termination of sponsorship, but in many cases they have significantly longer. 

It's obviously essential that the worker receives the cancellation notice, to avoid the risk of unknowingly overstaying their visa if the Home Office has sent a 60-day notice that the worker never received. That's why the worker should ensure that they have notified online to the Home Office of any change to their home address, which can be done online. They should also provide to their sponsor their latest personal contact details, so that their sponsor can pass those details to the Home Office in the termination of sponsorship notification.

The worker must only apply for new status before the end of their visa or the 60 days written notice (whichever is sooner) – they don't need the decision by that date. It’s filing a valid application that protects status and the ability to live in the UK, although the right to work will be delayed until new permission is granted. In many cases, Priority or Super Priority processing can expedite the processing to a week or one to two business days respectively from delivering biometrics. 

Family members

What about family members of the sponsored worker on dependant visas? Their visas are tied to the main sponsored worker's visa, so any 60-day cancellation notices will be sent to all dependants, not just the main sponsored worker. Even though the right to work of the sponsored worker ends immediately on termination of sponsorship, any family members on dependant visas can continue to live, work and study in the UK on the same visas. Until a new application is filed, those visas continue to be valid until the end of the original visa or until it is cancelled by the Home Office, whichever happens first.

Travel

Once sponsorship has ended but before submitting a new application, can the worker travel outside the UK if they still have sufficient time left on their sponsored visa? Unless the worker is relocating away from the UK permanently, we advise against doing this, due to the risks to status. The Home Office will have received the termination notification, so will know that the purpose of grant of the original sponsored visa has ended. When returning to the UK, that may cause problems with an immigration officer, and possible refusal of entry. If overseas travel is unavoidable, on return to the UK the worker should not use the electronic gates at the arrival airport (if eligible) in case their entry is classed as a visitor rather than as a sponsored worker under the original visa. Entry as a visitor may prevent them from applying for a subsequent visa inside the UK.

What alternative visa options are available to the worker?

The obvious solution is to find a new employer willing to sponsor a new Skilled Worker visa. That hiring organisation will need a sponsor licence and use it to issue a certificate of sponsorship - as evidence of a qualifying job offer - which is then used in the visa application. Finding another sponsor quickly may be difficult if other businesses in the same sector have a hiring freeze after redundancy programmes. So alternative visa options include:

• if the worker’s non-settled partner already has (or can get) their own UK immigration status, apply for a partner visa. If the sponsored worker's partner is currently working on a partner visa, can they be directly sponsored by their own employer, so that the sponsored worker can apply for a partner visa? Those switch applications can be submitted in the UK, but it will reset the five-year settlement clock, as time spent on a partner visa is not compatible with time spent on a sponsored work visa
• a partner visa if the sponsored worker’s partner is a British or Irish citizen in the UK, or if they have settled status (indefinite leave to remain). Again, that would reset the settlement clock
• a Global Talent visa for leaders or potential leaders in their field, including digital technology
• a High Potential Individual visa for anyone that graduated from a non-UK university ranked in the global top 50 in the last five years (before they came to the UK on a sponsored visa), or
• a student visa for anyone considering returning to higher education, for example an MBA, but that will restrict ability to work to 20 hours each week during term-time. 

There may be other options available depending on individual circumstances and plans, but in most cases, applications can be filed from inside the UK. Workers should assess the advantages and disadvantages of each route - for example High Potential Individual, partner and Student visas are not eligible for settlement.

What can employers do?

Obviously, sponsors must report end of sponsorship. But as well as the support they may provide to all departing employees - like outplacement counselling and/or references in a   redundancy, employers can also consider additional steps for their sponsored colleagues facing redundancy or exit for other reasons:

• provide additional briefing information or pay for a legal consultation so that employees understand the immigration implications
• arrange for employees to work their notice period or be placed on garden leave, rather than paying out the notice period as a lump sum. That delays the termination date – and therefore the trigger for notifying the Home Office – and so provides the employee with more time to find alternative immigration status
• in cases where there's a negotiated enhanced redundancy severance, can the employee exchange some of the non-contractual redundancy payment for salary during an extension to the employment termination date? Extra time rather than cash may be more valuable to sponsored workers, and for employees subject to post-termination restrictions on exit, employers may prefer to use the extra protection gained from a longer garden leave period. That wouldn't cost the employer much more, but again would give the employee more breathing space to apply for a new visa – although in some cases this may not be as tax efficient for the worker, as enhanced redundancy pay can be paid tax-free up to £30,000.

Whenever an employer handles the exit of an employee – whatever the reason for departure – it should check whether the worker holds a sponsored visa, as there are additional considerations that can be easily missed. If you would like to explore any of this further, please do get in touch with us.

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