The Court of Appeal has ruled that the Home Office cannot revoke a care agency’s licence to sponsor foreign workers simply because a worker’s pay dipped below one-twelfth of the promised annual salary in a given month. The judgment leaves the department’s enforcement drive intact. It also exposes how loosely the rules behind that drive were written.
On 5 November 2026, three Court of Appeal judges dismissed the Home Secretary’s appeal in R (Treal Care (UK) Ltd) v Secretary of State for the Home Department [2026] EWCA Civ 1420. Lord Justice Peter Jackson, with whom Lord Justice Green and Lord Justice Fancourt agreed, held that checking whether a sponsored care worker is being paid the salary on their visa paperwork “requires a rounded assessment, not a rigid application of a requirement to pay at least one-twelfth of the annual figure every month.”
The ruling upholds a July 2025 High Court decision that quashed the October 2024 revocation of Treal Care’s sponsor licence. The company, which supplies care staff to the NHS, local authorities and care groups, had around 75 workers on sponsored visas. Its licence has remained in place pending the appeal.
The Home Office lost on the meaning of its own guidance. The Court found that the guidance never said what the department’s barrister argued it said.
What the coverage misses
The specialist site Free Movement covered the High Court stage of this case in 2025, focusing on the Home Office’s salary miscalculations. RSN found no mainstream coverage of the appeal ruling at the time of writing. The appeal judgment matters for three reasons.
First, the Home Office tried to win on a rule it had not written down. Its counsel, Lord Murray of Blidworth, who served as a Home Office minister in 2022 and 2023, argued that sponsors must pay at least one-twelfth of the annual salary every month and must report any month in which they do not. The judgment records that “He accepts that the Guidance does not provide for assessment by reference to a monthly period, but argues that it does not prevent it” (judgment, para. 37).
Second, the department’s own rule change undercut its case. From 8 April 2026, a new paragraph of the Immigration Rules, SW14.3A, lets salary for workers on uneven hours be averaged over a cycle of up to 17 weeks. The judgment notes that Lord Murray “also accepts that the recent amendment to the Immigration Rules (see §16 above) did not sit easily with his submission” (para. 37). The Home Office changed the Rules but, the Court noted, not the sponsor guidance (para. 16).
Third, the original decision letter did not hold up. By the time of the High Court hearing, the Home Office had dropped its claims that workers were paid below the minimum wage, its claims about earlier tax years and its claim of unexplained deductions from pay (para. 22). It did not appeal the finding against its “genuine vacancy” ground at all (para. 8).
Background: a visa route the inspector called high-risk
Care workers were added to the Shortage Occupation List after the Home Office accepted a Migration Advisory Committee recommendation in December 2021. The route expanded quickly. In March 2024, the then Independent Chief Inspector of Borders and Immigration, David Neal, published an inspection of the immigration system as it relates to the social care sector, covering August to November 2023.
His findings were blunt. “There is just one compliance officer for every 1,600 employers licensed to sponsor migrant workers,” he wrote. The report described a fraudulently obtained licence used to secure 275 certificates of sponsorship, the document an employer issues to support a worker’s visa (often shortened to CoS), for a care home that “had no knowledge of the application,” and 1,234 certificates assigned over 15 months to a company that said it had four employees. The inspector concluded that the Home Office had applied a route “designed for a largely compliant sector” to “a high-risk area.”
The government then tightened the route. Sponsorship of new care workers from overseas closed on 22 July 2025, and enforcement against sponsors rose sharply. The Work Rights Centre, a migrant workers’ charity, reported in August 2026 that Home Office transparency data showed 4,403 Skilled Worker sponsor licences revoked in the 12 months to June 2026, compared with 1,828 in the previous 12 months. That is an increase of about 141 percent.
Treal Care’s case comes from the early part of that crackdown. Home Office compliance officers visited in March 2024. The department suspended the licence on 21 August 2024 and revoked it on 1 October 2024.
Deep dive: three workers, four months, one disputed formula
The revocation rested on three sponsored care workers, identified in the judgment as Ms A, Ms O and Ms L. Each held a certificate of sponsorship stating a gross salary of £22,400 a year for a care worker role. The Home Office examined their pay for May to August 2024.
Two grounds were given. The first was mandatory revocation ground (aa) in Annex C1 of the sponsor guidance, which applies where “You pay a sponsored worker less than you said you would on the worker’s CoS.” The second was ground (z), that the jobs were not genuine vacancies. The decision letter stated that each ground was, “individually and cumulatively,” a basis for revocation (para. 20).
The worker-by-worker facts, as found by the High Court and summarised by the Court of Appeal, were these:
- Ms A: Her pay over the four months annualised at £22,190, about £210 below the certificate figure. She had taken unpaid leave in May and July, which the Home Office knew about but did not address. The Home Office also calculated her required August pay as £1,982.93, which works out to £23,795.16 a year. Neither the decision letter nor the department explained that figure (paras. 25 and 58).
- Ms O: Her pay over the period annualised at £22,693.56, above the required salary. Earlier shortfalls arose because training hours were not passed to payroll, and the company paid a lump sum to correct them before the decision (para. 26).
- Ms L: She was paid below the required rate in each of the four months because she worked reduced hours while caring for her seriously ill son. The company wrongly believed compassionate leave allowed a pay reduction. After the decision, it paid her what she would have earned (paras. 27 and 59).
The High Court found the conclusions on Ms A and Ms O irrational and inadequately reasoned. Because the “genuine vacancy” ground depended entirely on the pay ground, it fell too. The Home Office’s own compliance officer had raised no concerns about the duties the workers were doing (para. 31).
On appeal, the Home Office’s main argument was about the measuring period. Lord Murray said the “only workable approach” for monthly-paid workers was a month-by-month test, with a duty to report any shortfall and a breach of the licence if the sponsor did not (para. 37). He also argued that the Home Secretary had no residual discretion once a mandatory ground was met (para. 38).
The Court rejected both points. On the formula, Lord Justice Peter Jackson wrote: “It cannot sensibly be said that a worker who works ten hours less than normal hours in Month 1 and ten hours more in Month 2, and is paid accordingly, is not being paid the annual figure on their CoS” (para. 49). He added that a bright-line monthly rule would “of course provide clarity,” but “that is not what the Guidance requires, and it would in any case be for the Secretary of State to decide whether such an extensive level of reporting was desirable in any different scheme” (para. 50).
On discretion, the Court said a reading that removed all discretion “would be contrary to principle and to common sense” (para. 52). Without it, the judge reasoned, “it will be compulsory to revoke sponsor licences, even on trivial grounds or where the Secretary of State considers that it would be unfair to the sponsor or contrary to the public good” (para. 53).
The Court did not give the company everything. It said the High Court was wrong to state that Treal Care had committed no act within the mandatory revocation framework, since Ms L was in fact underpaid in each month examined (para. 59). It also disagreed that the Home Office had to give the company a further chance to respond if it revoked on Ms L alone (para. 60). Neither point changed the result.
The final question was whether the decision could be saved under section 31(2A) of the Senior Courts Act 1981, which requires a court to refuse relief where it is “highly likely” the outcome would have been the same. The Court declined. The revocation had rested on two grounds and three workers, not one ground and one worker. “In the Decision, dishonesty was implied, but that is no longer the case,” the judgment says. Quoting Lord Justice Green from the hearing, it concludes: “we simply do not know what the Secretary of State would have decided if the only established ground had related to Ms L in respect of a period when she had been unable to work for strong compassionate reasons” (para. 62).
Counter-arguments and the other side
The Home Office’s position has real force, and the judgment records it fairly. Lord Murray described ground (aa) as protecting vulnerable migrant workers from abusive sponsors and protecting the labour market from undercutting (para. 35). He argued that annual averaging lets a sponsor hide months of substantial underpayment, and that the ruling leaves employers unsure when they must report a shortfall (para. 36).
That concern is not hypothetical. The inspector’s 2024 report documented sham sponsors and workers at risk of exploitation. A test that is easy to apply at scale suits a compliance team the inspector described as badly stretched.
The courts have also backed the department in other recent cases. In R (J’s Supermarket Ltd) and R (Prestige Social Care Services Ltd) v Secretary of State for the Home Department [2026] EWCA Civ 1147, handed down on 4 September 2026, the Court of Appeal dismissed both sponsors’ appeals and upheld their revocations. In Prestige’s case it agreed that recruiting staff who could not pass an English test, or could not drive when the job required it, “posed a threat to immigration control.” The Court in Treal Care also repeated earlier authority that the Home Secretary may keep a “fairly high index of suspicion and a ‘light trigger’” (para. 35, citing R (Prestwick Care Ltd) v Secretary of State for the Home Department [2025] EWCA Civ 184).
Treal Care’s own record is not spotless. Its counsel, Zane Malik KC, accepted that the company did not make contemporaneous reports about the three workers (para. 39). The Home Office relied on the pay ground, not the separate reporting-duty ground, which falls under Annex C2 and “normally” leads to revocation. Whether a reporting-based decision would have survived was not tested.
In substance, Treal Care did not argue that the rules should be relaxed. It argued that the Home Office should apply the rules as written, explain its calculations and weigh the explanations it had been given. On those points the Court largely agreed.
RSN analysis: Both sides of the immigration debate should be able to accept this ruling. Those who want firm enforcement need revocations that survive a judicial review. A decision that drops half its allegations in court, cannot explain its own salary figure and relies on a rule the department never wrote down is a gift to any non-compliant sponsor with a good lawyer.
What is established, disputed and not established
Established (from the judgment):
- The Court of Appeal dismissed the Home Secretary’s appeal on 5 November 2026, after a hearing on 6 October 2026.
- The Court held that ground (aa) calls for assessment over a period bearing “a fair relationship” to the period on the certificate, and a conclusion “based on all the available information,” not a single month (para. 51).
- The Court held that the Home Secretary keeps a residual discretion even where a mandatory revocation ground is met (para. 52).
- The Home Office abandoned its minimum wage, earlier tax year and unexplained deduction claims before the High Court (para. 22), and did not appeal the “genuine vacancy” finding (para. 8).
- One worker, Ms L, was underpaid in each of the four months examined, for compassionate reasons, and was later paid in full (paras. 27 and 59).
Disputed:
- Whether annual or periodic averaging creates a loophole that lets sponsors conceal underpayment. The Home Office argued in court that it does. The Court said it was for the department to write a clearer rule if it wants one.
- Whether the High Court was right that the company committed no act within the mandatory framework. The Court of Appeal said it was not (para. 59).
Not established:
- Whether any Treal Care worker was exploited. The Home Office’s implied dishonesty and “genuine vacancy” allegations were not upheld, and the Home Office confirmed its compliance officer raised no concerns about the workers’ duties (para. 31).
- How many other revocations relied on a strict monthly test. The Home Office does not publish that figure.
- Whether the Home Office will seek permission to appeal to the Supreme Court, or will make a fresh decision. No public statement had been found at the time of writing.
- The total legal cost to the taxpayer. The High Court ordered the Home Secretary to pay Treal Care’s costs. The appeal costs order is not stated in the published judgment.
What accountability would look like
- Rewrite Annex C1(aa). The Court said a monthly reporting rule would be for the Home Secretary to choose. If the department wants a monthly test, it should put one in the guidance, align it with SW14.3A and explain how uneven hours and unpaid leave are treated.
- Check the arithmetic before the letter goes out. A required monthly salary that annualises to £23,795.16 against a £22,400 certificate should not reach a decision letter unexplained.
- Publish litigation outcomes. Parliament should be told how many sponsor revocations are withdrawn by the Home Office or quashed by the courts each year, and what the department pays in costs.
- Follow up the 2024 inspection. The current Independent Chief Inspector could re-examine sponsor compliance capacity against today’s record revocation levels.
- Ask the Home Affairs Committee to probe. MPs could ask the Home Office whether other revocations relied on the monthly formula the Court of Appeal has now rejected.
The case also fits a pattern RSN has followed. Earlier this week RSN reported that a Lords committee found the Home Office had restored a deleted transit visa rule without Parliament, and that the High Court had told an Afghan embassy guard to wait out a Ministry of Defence queue of 3,500 reviews. The concerns are older than the care visa. A decade ago RSN published Center for Immigration Studies maps of H-1B employers, the American employer-sponsored visa, and the effect of immigration on less-educated workers. Employer sponsorship only protects wages and the public when the rules are clear and the enforcement is competent.
Sources: R (Treal Care (UK) Ltd) v SSHD [2026] EWCA Civ 1420 (Court of Appeal judgment, 5 November 2026); R (J’s Supermarket Ltd) and R (Prestige Social Care Services Ltd) v SSHD [2026] EWCA Civ 1147; ICIBI, An inspection of the immigration system as it relates to the social care sector (March 2024); Work Rights Centre, “Home Office revokes record number of sponsor licences” (27 August 2026); GOV.UK, Lord Murray of Blidworth; Bevan Brittan, changes to the Immigration Rules for health and care (2025).
Featured image: Home Office headquarters, 2 Marsham Street, London. Photo by Steph Gray, CC BY-SA 2.0, via Wikimedia Commons.
How this article was made: Right Side News researched and drafted this article with the help of AI tools. Sources are linked so readers can check them. Spot an error? Tell us in the comments and we will correct it.
