Civil Penalties, Right To Work and Protecting Your Business

The Home Office has published its list of civil penalties for the first quarter of 2016, with the fines imposed totalling more than £14 million. Elsewhere in the media, the relationship between certain employers and the Home Office when arresting those working illegally in the UK has been widely reported.

Businesses who employ those without the right to work risk prosecution and a civil penalty. There is also potential for significant damage to the business’ reputation. It is better to avoid these risks for your business from the outset.

The starting point is that knowingly employing someone without the right to work, or employing someone with reasonable cause to believe that person did not have the right to work, is a criminal offence, punishable by up to five years’ imprisonment and an unlimited fine. However, even if an employer had reasonable cause to think the person had the right to work, they may still be liable for a civil penalty of up to £20,000 per worker. On the other hand, employers must not use discriminatory employment practices. Balancing these obligations can be an onerous task, especially for small businesses.

The solution is a thorough system of right to work checks and records, equally applied to all prospective and actual employees. If you are later found to have unknowingly employed someone without the right to work, the document checks and records may protect you against a civil penalty. This is known as a ‘statutory excuse’. They may also protect you against any accusation that you should have known that the person did not have the right to work in the UK.

Who has the right to work in the UK?

This is not as straightforward a question as it seems. Some people may have a visa, but not have the right to work. Others may have no visa, but have a right to work.

The following people have the right to work in the UK:

• British Citizens;
• EEA Citizens (there may be additional restrictions on Croatian citizens);
• Those with the right of abode in the UK;
• Those with indefinite leave to remain (“settlement”) in the UK;
• Those with permanent residence in the UK;
• Those with a visa that permits the holder to work for you in that specific role. Some visas are valid to only work for one employer.

You must not assume that a person does or does not have the right to work from their appearance, accent or other personal characteristics. You should only rely on the documents they produce to you.

How do I protect my business?

You should conduct right to work checks on all employees before they begin working for you. You as the employer must undertake these checks, they cannot be outsourced to a third party. Depending on what the person claims as their right to work, you will need to check, copy and retain certain documents from the Codes of Practice. The Codes of Practice are regularly updated and should be consulted each time you employ someone, to ensure there have been no changes.

You must:

1. Obtain the person’s original documents;
2. Check them in the presence of the holder; and
3. Make and retain a clear copy, and make a record of the date of the check.

Depending on the document produced, you then either have a full or limited statutory excuse. A full statutory excuse is established for those who show a document demonstrating a permanent right to work in the UK (List A documents).

A limited, time-bound statutory excuse is established for those who supply documents showing a limited right to work in the UK (List B documents). For those with a limited right to work, you may need to use the Employer Checking Service to ask the Home Office to confirm the right to work. You may need to follow up checks regularly. Students who have restrictions on the hours they can work in term time require additional evidence of their term dates.

I already have people working for me who I have not checked. What should I do?

You should look at what you do have for each person, and make a note of when they were employed. It may be that you have employed them since before employers were required to carry right to work checks. The Codes of Practice for employers have also varied over time, so some documents may be acceptable for one person and not another.

You should seek advice at this stage, to ensure you know what you should have for each worker. If you do not have all the documents you need, you will need to establish whether the person does have the right to work. You cannot be fined for employing a person who does have the right to work whose documents were not checked correctly. You can only be fined for employing people who do not have the right to work. You must not check people’s right to work under discriminatory assumptions.

You will need to seek further advice if you establish that the person does not have the right to work, as you may need advice on terminating that person’s employment lawfully.

I have been issued with a referral notice – what do I do?

If you have been issued a referral notice this will shortly be followed by an Information Request asking you for documents, so start gathering evidence and ensure you know:

1. Are you the employer of the worker? Are they self-employed, or a contractor?
2. What checks did you undertake? Can the information be found in any of your record keeping systems?
3. Have you co-operated with the Home Office, or reported the worker yourself? If you have you should provide evidence.

Once you receive the Information Request, ensure you comply with any stated deadline, as even if you do have to pay a civil penalty, complying with the Home Office may mean you are entitled to a lower fine.

I have been issued with a civil penalty notice, what happens now?

Check the notice. Ensure it refers to the same employees stated on the earlier documents. Check the amount of the penalty. If you have co-operated with the Home Office, and if you have not been fined before, you should not be fined the full £20,000.

You can object to the penalty on one of three grounds:

1. You are not liable to pay the penalty (e.g. you are not the employer).
2. You have a statutory excuse (e.g. you have carried out document checks correctly).
3. The level of penalty has been miscalculated (e.g. mitigating circumstances have not been taken into account).

You must do this in writing and comply with the deadlines given on the notice. If you do not wish to object, and pay within 21 days of the civil penalty being due you may be entitled to a discount of 30%. You may be able to arrange to pay in instalments.

I have objected to my civil penalty but it has been upheld. What can I do?

You can either pay the penalty, or appeal. If you wish to pay the penalty you may still be entitled to a discount if you pay in full within 21 days. You may be able to arrange to pay in instalments.

Alternatively, you can appeal the civil penalty. You normally have 28 days to appeal. The appeal is made to the County Court, and can be made on the same grounds you objected to the civil penalty. You will need to address why the Home Office have upheld the civil penalty. If you have not sought legal advice up until this point, you should do so now. This is because if your appeal is not successful you may be liable to pay the Home Office’s costs as well as your own.

Contact Our Business Immigration Barristers

For professional legal advice in relation to avoiding or challenging a civil penalty, contact our business immigration barristers on 0203 617 9173 or via our online enquiry form.