Civil Penalties under the Prevention of Illegal Working provisions (UK Immigration Laws) -Case study

If you are a UK business or an individual employing persons without permission to work in the UK then you are liable for a fine up to £20,000 per employee or a 2 year prison sentence. Your company will be listed by the Home Office in a public register and in newspapers – named and shamed.

The Scenario –

NOTE: the names used are fictitious but facts are from a real case with adaptations to preserve confidentiality.

J B Masonton Ltd (JBM) is a UK retail company. They also run subsidiary companies in the food and leisure industries. It has two retail shops. JBM imports goods from India, China, USA, Australia, Canada and Turkey. JBM has been trading for the last 10 years and the business is growing rapidly along with the numbers in the work force. Currently there are 45 full time employees, 10 part-time employees and numerous third parties working for/with them on temporary basis. The retail outlets are busy. There are 20 full time employees and 10 part-time. They also work closely with a local business Institute. The business institute refers students to JBM through the institute’s program to provide work experience. JBM maintains close ties with their overseas suppliers and clients. They intend to ‘partner’ with some of their overseas counterparts and are intending to merge with USA, India and Turkish counterparts.

Issue 1.

JBM finds itself amidst high-season and high volume of imports. It hires two students and 5 part-time workers on 3-month temporary contracts. A week after they started work at JBM, Home Office carries out random checks on local businesses for illegal workers. The immigration officers have the powers to check, search and arrest illegal workers from any business premises without prior warning to the employer. This is referred to as an ‘immigration raid’. Home Office officers find one student and two part-time workers at JBM with no legal rights to work in the UK.

JBM is issued with a Civil Penalty of, minimum £30,000.

Solutions and remedies

JBM will be given an opportunity to mitigate their circumstances via written representations for a reduction or a cancellation of the penalty. JBM will have to satisfy the Home Office that they had taken reasonable precautions and has implemented systems to check the employee’s immigration status and such reasonable checks were breached by the employee. Therefore JBM must have systems in place to check employees and even if the employees submit immigration documents, JBM must have a system to check their validity and means to keep track of potential expiry dates or limited rights to work.

JBM must have a system to carry out ‘immigration-health checks’ on personnel files on a regular basis.

Issues 2.

JBM’s HR department deals with recruitment of new staff and they rely on third party agents and adverts online. What essential precautions must the HR department take under UK Immigration Laws? Solutions and remedies If a candidate is a non-EEA or is not a Swiss national then JBM needs to check if the candidates have the right to work in the UK by checking their immigration documents. Illegal workers may be - a. international students with expired visas, or students working more hours than they’re allowed to b. people who work on a visitor’s visa c. people who over-stay their permission to stay in the UK d. people who have entered the UK illegally and had had no immigration control e. person has restrictions on taking up paid or unpaid employment during his/her stay in the UK. JBM must have systems in place to carryout checks on employment candidates before signing employment contracts or engaging them in any work. The systems have to be fool-proof thus knowledge on how to implement checks are paramount. 

Issue 3.

JBM decides to employ a non-EEA national. What steps should JBM take?

Solutions and Remedy-

JBM must apply for a Home Office Sponsor Licence enabling JBM to legally employ non-EEA or a Swiss national.

Obtaining a licence from the Home Office can be an arduous process as the Home Office requires sensitive documentation and information from the business. The licence is not a one-off licence but a process which needs careful attention. If the Home Office is not satisfied with the application then the application will be refused and the process has to be started all over again.

Before the application is lodged, JBM must carry out an internal audit mirroring the Home Office requirements against JBM’s HR practices. JBM must check if personnel files are in order and systems are in place to check key dates affecting the migrant workers and their permission to work in the UK.

Issue 4.

JBM has merged with their American and the Turkish counterparts. JBM wants directors of the American and Turkish concerns to work in the UK. The American director on a 12 month contract and the Turkish counter-part to work on a permanent basis. Both directors make applications for work permits to the respective UK embassies in their countries but both visas were rejected.

Solutions and Remedies -

Restrictions and Immigration Laws pertaining to employing a non-EEA or a Swiss national is for all levels of employment albeit C.E.Os. Chairman, presidents or directors of companies.

The visa applications were refused because UK businesses cannot employ non-EEA nationals without a Home Office licence.

JBM must therefore obtain a Sponsor Licence before the Directors from America and Turkey could come to the UK for employment. It is only after the Sponsorship Licence is in place can JBM issue a Certificate of Sponsorship (COS) to the overseas directors to enter the UK on an ‘intra-company transfer’.

With regards to the Turkish counterpart, JBM could consider the ‘Ankara agreement’ provisions which would allow the Turkish counterpart to join JBM effectively and speedily.