UK: Resident Labour Market Test Must Be A Genuine Attempt To Recruit From The Settled Workforce

Last Updated: 17 April 2018
Article by Kerry Garcia

A recent High Court decision in judicial review proceedings emphasises the importance of ensuring that the Resident Labour Test is carried out correctly.  In particular, it is crucial that sponsors consider all applications received against the requirements set out in the adverts and shortlist for interview all applicants who meet the requirements in the role. It is not sufficient to shortlist only the best candidates in circumstances where other candidates also meet all of the requirements for the role. In this case the Home Office decision to refuse to grant a fresh licence application was upheld.



Exmoor Surgery employed Ms Palanisamy on a part time basis as a Business Development Manager and then wished to employ her and sponsor her under Tier 2 (General) in a similar full time role.

Exmoor Surgery advertised for the role in accordance with the Tier 2 sponsor guidance.  In most cases, this requires a Tier 2 sponsor to advertise the role for 28 days in two different locations.  Employers must also offer the position to a settled worker ahead of a non-settled worker when both candidates have the required experience and skills for the role as set out in the job advert.  

Exmoor Surgery received 42 applications and five were invited to attend an interview. Three of the five shortlisted candidates failed to attend.  After interviewing the two candidates the surgery offered the position to Ms Palanisamy and sponsored her under Tier 2.

Soon after this, Exmoor Surgery notified UK Visas and Immigration ('UKVI') of a change of sponsor circumstances, namely a change in its partnership.  This triggered an application for a new sponsor licence due to the change in control.  The surgery submitted its application for a new licence and, following a visit from UKVI, the application was refused.

UKVI gave several reasons for the refusal of the licence application, including:

  • When considering who to short list for interview the surgery had only shortlisted the best five candidates for interview.  They did not consider all of the applicants to assess whether any other applicant was suitable for the position.  In other words, they did not consider whether any other applicants met all of the criteria set out in the adverts. 
  • UKVI felt that the requirement for the successful candidate to have an MBA was exaggerated in order to be difficult for a settled worker for meet.
  • UKVI also queried the SOC Code chosen for the role and sought to argue that the role fell within a SOC Code at NQF level 4 and therefore that the role did not met the skills requirement of at least NQF level 6.  Interestingly, UKVI contacted the Office of National Statistics to try to determine what the correct SOC Code was.  

The surgery sought to argue that UKVI's decision not to grant the licence was irrational.


The High Court Judge found that the SOC Code used by the surgery was correct and also found that the requirement for an MBA was not exaggerated, holding that it was for the surgery to determine if they considered the qualification to be necessary.

However, the Judge upheld UKVI's decision that the surgery had not demonstrated a genuine attempt to recruit from the resident labour market.  The judgment serves as useful reminder that the effect of the resident labour market test is that a settled worker who is suitable for an advertised post should be recruited in preference to a non-settled candidate, even if the latter is the better candidate.  Before offering Mrs Palanisamy the role, the surgery should have considered the remaining applicants and whether there were any settled workers amongst them who were potentially suitable for the post because they had the requisite skills and experience.

In addition, some of the candidates had been rejected because they did not have experience of working in General Practice.  However, this was not a requirement stated in the advert and therefore the Judge agreed that candidates could not be regarded as unsuitable for this reason. 

This meant that the application for judicial review was dismissed and the decision not to grant the licence stood.


This case acts as a reminder to ensure that care is taken when conducting the resident labour market test. It is important to ensure that only skills, experience and qualifications genuinely needed for the role are included in the adverts and it is equally important to ensure that all key requirements are set out. 

Sponsors should ensure that they assess every applicant against the skills, qualifications and experience set out in the adverts and keep a record of why applicants were not short-listed for interview and explain which of the requirements set out in the advert were not met.

All applicants who, on the face of it, meet the requirements in the adverts should be short-listed for interview and copies of the interview notes must be retained.  The settled worker must be offered the role in preference to the non-settled worker if both candidates meet all the requirements.  If it becomes apparent after the interview that the settled worker does not meet the requirements set out in the adverts full reasons as to why this is the case must be retained. 

Further, sponsors may only reject settled workers for failing to have the skills, experience or qualifications set out in the adverts.  If there is no suitable settled worker for the role and the sponsor offers the job to a non-settled worker it is also important to ensure that the non-settled worker meets all the requirements.

Finally, this case is a reminder that, where there is a change in the sponsor's circumstances (including a change to the partnership or the immediate parent company), it will trigger the need to apply for a new sponsor licence and this may lead to further UKVI scrutiny.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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