As a result of recent immigration changes intended to reduce net migration and the number of sponsored workers, the minimum salary and going rate salary thresholds have increased significantly. This means that, increasingly, existing Skilled Workers are not able to extend their immigration permission because their salary is not high enough to meet the new salary threshold for their role. This means that sponsors are finding they need to balance compliance with immigration law against employment law risks, including unfair dismissal claims.
The recent first instance Employment Tribunal decision in Surya Dhakal v Fintru Limited provides practical guidance for employers navigating dismissals in these circumstances. This case is helpful as it demonstrates that dismissals in these circumstances can be fair, but this very much depends on the steps taken before the decision to dismiss is made.
What Happened in this case?
The claimant, Mr Dhakal, was employed by Fintru Limited between December 2021 and April 2025. He initially held a graduate visa and then transferred to Skilled Worker leave.
In April 2024, significant increases to salary thresholds for sponsored workers came into effect. This meant that his salary was not high enough to meet the new going rate salary threshold under the Skilled Worker route and therefore the sponsor was unable to extend his sponsorship.
Importantly, before dismissing the employee the employer took the following steps:
- Held multiple meetings with the sponsored worker to discuss the issue
- Sought advice from external immigration specialists
- Explored alternatives, including possible relocation to another jurisdiction within the group
The employee declined relocation and, following a formal process, he was dismissed when it became clear he would no longer have the right to work in the UK.
The Tribunal’s decision
The employer successfully defended the employee’s claim for unfair dismissal. The Employment Tribunal accepted that the employer had a fair reason for dismissal and had acted reasonably in all the circumstances. The Tribunal also placed weight on the fact that the underlying issue arose as a result of government policy changes rather than any failing on the part of the employer.
What are the lessons from this case?
1. It's still crucial to follow a fair process
The loss (or impending loss) of the right to work can constitute a potentially fair reason for dismissal. However, an Employment Tribunal still expects employers to follow a fair process before making the decision to dismiss.
2. Speak to the employee early on and be open about the potential issue
In Dhakal, the employer engaged with the employee early and on several occasions. This included clearly explaining the implications of the salary threshold changes and the potential impact on his employment.
HR teams should undertake an audit of sponsored workers and check if the salary requirements will be met for extension. They should ensure that employees understand early on:
- What has changed
- Why it affects them
- What the potential outcomes are
This also gives the employee an opportunity to seek alternative employment at a higher salary before their visa expires.
3. Undertake meaningful consultation and engage with the alternatives
In this case, the Tribunal noted that multiple discussions were held with the sponsored employee before dismissal and the employer genuinely explored the options.
Consultation should include:
- Inviting input from the employee
- Considering alternative options, such as whether relocation or another role is possible or whether it is possible to increase the salary
- Allowing time for consideration
5. Take specialist advice
In this case, the employer took external immigration advice before making its decision. This is recommended as the rules around minimum salary are complex and further, there may be alternative immigration options to enable the sponsored worker to remain in the UK.
Sponsors should also take advice before deciding to increase the salary simply to ensure the salary threshold is met. The sponsor guidance now states that the Home Office will revoke a sponsor licence if they reasonably suspect the sponsor has artificially inflated the salary of a worker to enable them to meet the relevant salary threshold.
6. Follow a fair process
Even where dismissal may seem inevitable, procedural fairness is key – especially if the employee has the requisite length of service to bring a claim for unfair dismissal. Employers should ensure:
- Formal consultation meetings take place
- The decision is clearly explained
- The employee has an opportunity to respond
- The employee is given the right to appeal against the dismissal
7. Document the process
Employers should keep clear evidence of the steps taken. Documentation (including meeting notes) demonstrating consultation, alternatives considered, and the reason for the decision is essential in defending claims.
Although it is a first instance decision, Dhakal v Fintru Limited is a reassuring decision for employers facing the challenge of immigration-driven dismissals. It confirms that, in these circumstances, a dismissal can be fair. However, the case also reinforces a broader principle – that a fair process is also key.
For HR teams, the message is clear: engage early, consult meaningfully, explore all viable options, and document every step. In doing so, employers can significantly reduce the risk of successful unfair dismissal claims from sponsored workers.
