Can sponsored employees transfer under TUPE if the new employer has no sponsor licence?

The Transfer of Undertakings (Protection of Employment) Regulations 2006 can move employment contracts and preserve existing employment rights when a business, service or part of an undertaking transfers. A sponsor licence, however, belongs to the organisation to which the Home Office granted it.

The receiving employer must establish whether it already holds a licence covering the relevant immigration route. If it does not, the transferred employment relationship does not itself authorise the employer to assume sponsorship without following the applicable Home Office process.

The analysis should begin with legal identity, not branding. A business may retain the same premises, managers and commercial name while its employing company changes. Conversely, an internal change that leaves the same licensed employer intact may produce a different immigration result.

Paragraph C4.22 of the sponsor duties guidance states that a new sponsor must make a valid sponsor licence application within 20 working days of the date the workers move to it if it does not already hold a relevant sponsor licence. The same section addresses reports concerning the transfer and the workers for whom the new sponsor accepts responsibility.

The requirement is to make a valid application within that period. It should not be confused with a promise that the Home Office will decide the application within 20 working days. The quality, supporting evidence and timeliness of the submission therefore matter immediately.

Before treating the provision as available, the parties should check that the movement is in fact a transfer covered by the relevant Home Office guidance and that all route specific conditions are satisfied. A new hire dressed up as a TUPE transfer does not acquire the benefit of the transfer framework by description alone.

An employee's existing immigration permission, the new employer's sponsor obligations and the statutory excuse associated with a right to work check are connected but not interchangeable. The employer should review the current guidance on transfers, the type of immigration permission held and the right to work evidence available.

The due diligence exercise should establish the employment entity, Certificate of Sponsorship, immigration expiry date, permitted role, work location and status record for each person. Inconsistencies between the transfer schedule and the immigration record should be addressed before the sponsor application is finalised.

The answer can also change where the worker's job duties, occupation, salary or location change as part of the transaction. A compliant movement on paper may conceal a separate requirement to report or apply for permission where the real role has materially altered.

The most defensible position is established before the transfer. The buyer or incoming service provider should identify sponsored employees during due diligence, determine whether its existing licence is adequate and prepare the evidence and personnel required for any new application.

Commercial documents can allocate responsibility for records, notifications and cooperation, but contractual indemnities do not amend the Home Office rules. Directors, human resources, corporate advisers and immigration counsel need a shared chronology and a clear decision owner.

Where completion has already occurred, the priority is to establish the actual transfer date, submit any valid application within the applicable period, protect the worker record and make accurate reports. A late discovery should be addressed with direct evidence and a controlled explanation rather than informal assumptions about automatic continuation.