Four lessons in prevention of illegal working

Samar Shams
Practice Development Lawyer
Lewis Silkin LLP
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The recent Employment Appeal Tribunal (EAT) case of Baker v Abellio brings to light a number of surprises about the prevention of illegal working – surprises which businesses should be aware of in light of this development in case law.

Lesson 1: Employers are not required by law to check employees’ right to work documentation.

The first thing to note is that it is contrary to Section 15 of the Immigration, Asylum and Nationality Act 2006 (IANA 2006) to employ an adult who is subject to immigration control and does not have a valid visa. Checking right to work documentation according to Home Office specifications reduces the risk of being issued a civil penalty if a worker is found not to have the required immigration status. Employers often think of right to work checks as a positive obligation but they are not, which can be significant when it comes to dismissal.

Employers cannot dismiss on the basis that failure to provide documentation contravenes law

In Baker, the Employment Appeal Tribunal set aside an Employment Tribunal (ET) decision which said that it was fair for the company to dismiss an employee because that employee failed to provide right to work documentation according to Home Office specifications. The employee in question was a Jamaican national who had the right to live and work in the UK. Nevertheless, the ET found that the employer had identified a fair reason for dismissal, namely under Section 98(2)(d) of the Employments Rights Act 1996 (ERA). Section 98(2)(d) of the ERA states that one of the fair reasons for dismissal is where an employee continuing to work would result in either the employee or employer contravening “a duty or restriction imposed by or under an enactment”.

The EAT overturned the ET decision. It confirmed that employers are not positively obliged to obtain right to work documents. Rather, doing so might excuse them from a civil penalty. It followed that there was no contravention of a legal duty where the employee continued to work without providing right to work documentation to the employer. Therefore, the employee’s failure to provide right to work documentation according to the Home Office specifications did not fall within Section 98(2)(d) as a reason for fair dismissal.

Employers should check documents even though they are not required by law to do so

It is a criminal offence for an employer to knowingly employ an illegal worker or to employ an illegal worker where it has reasonable cause to believe that an employee is working illegally. Criminal liability extends to directors, managers and secretaries of an offending company. If convicted, they could face five years in jail and an unlimited fine (IANA 2006, Section 21).

Under the civil penalty scheme, any employer found inadvertently employing an illegal worker could face an on-the-spot fine of up to £20,000 per illegal worker. Illegal working can also result in closure of a business’ premises and in personnel being disqualified from director status.

Employers who are sponsors are required to check the documents of sponsored workers

One of the compliance duties that sponsors sign up to is a duty not to employ migrants where they are not authorised to do the work in question.

An employer that already has a sponsor licence and is discovered to be employing an illegal worker could lose its sponsor licence. If the Home Office discovers an illegal worker at a business which does not yet have a sponsor licence, it will impact upon the business’ ability to obtain a sponsor licence.

Employers can dismiss on the basis of conduct and contractual obligations

An employer may want to dismiss an employee who does not provide documentation of their right to work in the UK, to protect itself from the risk of employing illegal workers and all the potential negative consequences. How can they do so fairly?

The simplest way for an employer to ensure its ability to dismiss someone who refuses to provide right to work documentation is to include a provision in employees’ contracts obliging them to provide right to work documentation in line with Home Office specifications on demand. In the event that the employee then fails to provide their documents, the employer should be able to dismiss on the basis of misconduct. The employer would cite the employee’s failure to comply with a contractual obligation, as well as their failure to comply with a reasonable instruction.

Lesson 2:  Individuals with right of abode and EEA nationals and their family members who benefit from rights under the Immigration (European Economic Area) Regulations 2016 fall outside the provisions under which an employer would be liable for sanctions for employing an illegal worker.

Baker v Abellio demonstrates why the restriction in Section 15 of the IANA 2006, against employing an adult who is subject to immigration control and does not have a valid visa, is not a solid basis for a dismissal under Section 98(2)(d) of the ERA. In Baker, the restriction in Section 15 did not apply to the employee: he was not subject to immigration control because he had the right of abode in the UK.

EU nationals and their family members who benefit from rights under the Regulations are not subject to immigration control and therefore similarly fall outside of Section 15 of the IANA 2006.

Lesson 3:  A reasonable but mistaken belief that to continue someone’s employment would be illegal can be grounds for fair dismissal

Fair reasons for dismissal also include “some other substantial reason of a kind to justify the dismissal of an employee holding the position which the employee held”. An employer may be able to rely on this potentially fair reason for dismissal if it can show that, following a thorough investigation, it genuinely believed that to continue employing the employee would breach a statutory restriction.

The EAT in Baker v Abellio acknowledged that a genuine but mistaken belief that continued employment would contravene a statutory restriction could potentially amount to ‘some other substantial reason’ for fair dismissal. However, in Baker, the employer did not satisfy the EAT that its mistaken belief was reasonable. The employer had insufficient evidence of its communications with the Home Office to establish that it gave full information when enquiring as to its obligation to check his documentation. It also had insufficient evidence of the Home Office’s responses.

Lesson 4:  The Home Office gives employers incorrect advice on employees’ right to work in the UK.

Baker v Abellio is not the first judgment to refer to incorrect advice that employers have received from the Home Office. Another recent case, Olatinwo v Qualitycourse Ltd T/A Transline Group, reflects that it is not uncommon for the Home Office to provide incorrect advice or incomplete information about employees’ immigration status. The lesson for employers is simple: obtain the Home Office’s advice in writing whenever possible and make a contemporaneous note of any oral communications.

Follow dismissal procedures

An employer would be required to carry out a fair procedure before dismissing an employee for some other substantial reason. The procedure should include investigation, a written explanation of the employer’s position, an invitation to a meeting to discuss the issue, make representations and put forward any relevant evidence, and a right of appeal against the employer’s decision to dismiss.

About Samar Shams

Samar Shams

Practice Development Lawyer at law firm Lewis Silkin


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