If you employ workers from overseas, you should be aware that there are strict immigration compliance duties and companies who fail to meet these can incur fines.
Few companies set out to breach their immigration duties but may end up doing so inadvertently through relatively minor administrative errors or oversights.
In such a situation, the first intimation that a breach has occurred may be the receipt of a civil penalty notice. Employers may find themselves wondering how to react to a penalty for something that they hadn’t even realised they had done.
What to do when a civil penalty notice is received
A firm incurs a civil penalty if it has employed a person who did not have permission to work in the UK. This is a breach of Section 15 of the Immigration, Asylum and Nationality Act 2006. If a company receives a civil penalty, there are several key stages for any response.
They can either accept and pay the fine or they can instigate a challenge to it. Whichever option they choose, they only have twenty-eight days to act.
The Home Office offers a 30% discount if payment is received within 21 days of the notice, so it’s clear that prompt payment is their preferred outcome. Notwithstanding this, a company can choose to complete and return the objection notice that will accompany the notification of the civil penalty.
If the company does object, they will have to provide supporting evidence that the civil penalty was issued in error. However, the company needs to be sure of its ground because it is entirely possible that the Home Office may in fact increase the level of the fine, based on the new information received.
The level of fines is particularly high – they can amount to £20,000 for every illegal worker employed. There is also the reputational damage caused by fines and the effect on future Home Office applications.
So, should the company pay the fine or raise an objection?
Before making any decision, the company needs to take a good look at the evidence the Home Office has against them. If that evidence is clear-cut, overwhelming or otherwise unarguable, it would be unwise to try and object to it. The company should pay up and learn from what went wrong, particularly when the Home Office is likely to pay them another visit to ensure that they have not re-offended.
Challenging the penalty
When presenting a challenge to the civil penalty, the company should build its defence on specific grounds which include:
1) No proof of the offence
The Home Office will be asked to provide proof that the company has committed an offence under the Act. They will need to prove two things:
that the person in question did not have the appropriate right to work in the UK and
that they were employed by the business in question. This may hinge on whether the person was ever employed rather than being an independent contractor or engaged through a recruitment agency.
2) The due diligence excuse
This defence revolves around the employer being able to prove that they carried out the document checks required by law on the illegal employee. The employer will not have to pay the fine if they can show compliance with the requirements of the Act by producing the relevant documents. This can be done by:
proving that the employee has shown a listed document such as a UK or EU passport, Birth Certificate or Residence Permit;
showing that the employer has done all that they need to do to verify that the document is valid and that the employee producing it is the rightful owner;
copying all material relating to the employee and retaining it for not less than two years after the employment has finished;
checking any photographs or date of birth information and verifying that it matches the appearance and apparent age of the employee.
3) The Home Office has exceeded its powers
A further basis for challenging a civil penalty UK immigration notice may be that the Home Office has obtained evidence unfairly or in excess of its statutory powers. The Home Office has a wide range of powers to investigate and enforce civil penalties.
However, these are not unlimited and a report in 2014 by the Chief Inspector of Borders and Immigration said that two thirds of immigration raids were conducted with inappropriate use of search powers, including six that were carried out unlawfully, where the searches were approved by a civil servant who was of too low a level or were used out of time.
4) Statutory mitigating factors
When deciding how high the penalty will be, the Home Office will consider several different factors:
The checks that the employer carried out before taking on the illegal worker.
How often such offences have been carried out in the past by the employer.
If notification to the Home Office about the illegal worker was made by the employer.
The degree of co-operation between the employer and the Home Office during the investigation.
If the company’s objection is rejected, a further objection can be made to the County Court. This step must be made within twenty-eight days of the Home Office’s decision. A rehearing will then be held, where the court examines whatever documentation it deems relevant to the case. This may include documents that hadn’t previously been considered.
Points to bear in mind
It is illegal to hire an employee aged 16 or over subject to immigration control and who is not able to work legally in the UK. An employer has a duty to prevent illegal working. A right to work check must be carried out correctly in every circumstance.
An applicant’s confirmation of a right to work in the UK is not legally sufficient to fulfil the right to work check requirements of an employer. An employer must:
a) obtain the individual’s original document(s),
b) check the validity of the document in the presence of the individual,
c) make and retain a clear copy of the document(s), including a date of the record the employer carried out the check.
A check must be done before an employee starts work. It will not be valid if it is completed after the employee begins his/her employment.
Criminal penalties will occur if the employer knows the employee does not have a right to work. Employers can be liable for an unlimited fine as well as up to five years in prison.
Home Office figures which are released quarterly show the number of penalties and their value.
Figures relate to the period between October 1st and December 31st 2016