Legal Briefing

Enforcement: prevention of illegal working and compliance under the points-based system

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Human resources | 01 December 2012

The UK government tightened its stance on illegal working in 2008, imposing larger fines on employers that are found to employ people with no right to work in the UK and increasing unannounced visits on businesses in an attempt to tackle illegal working. The introduction of the points-based system in November 2008 also imposed on UK employers the responsibility for tracking and monitoring migrants sponsored under Tiers 2, 4 and 5. An organisation’s failure to comply with its obligations under prevention of illegal working legislation and sponsorship duties under the points-based system can have serious consequences: from the suspension and revocation of a sponsor licence to prosecution.


PREVENTING ILLEGAL WORKING IN THE UK

The law on preventing illegal working is set out in ss15 to 25 of the Immigration, Asylum and Nationality Act 2006 (the 2006 Act), which came into force on 29 February 2008. Employers are under a duty to carry out document checks on all employees before they commence employment, to ensure that they have the right to work in the UK. Under the 2006 Act, for all employees hired on or after 29 February 2008, employers have an ongoing legal obligation to check the immigration status of non-EEA national workers who have limited leave to remain in the UK at least once every 12 months. If an employer fails to carry out these key checks, the UK Border Agency (UKBA) has the power to impose a fine, known as a civil penalty, for up to £10,000 per illegal worker. Employers had a duty to ensure that relevant document checks were carried out before an individual was hired before 29 February 2008, however, it is the introduction of the annual checks under the 2006 Act that can and have been overlooked by businesses of varying size.

Document checks

UKBA guidance on preventing illegal working was updated in June 2012 to clarify which documents are acceptable when proving a right to work in the UK. Carrying out document checks is the only way businesses can be reasonably satisfied that they are employing people who are legally able to work and to establish what is referred to as a ‘statutory excuse’ against a civil penalty if a person turns out to be an illegal worker. Employers cannot be expected to determine whether a document is the ‘genuine article’, but taking steps to ensure that an individual has the right to work in the UK offers protection from huge fines if the UKBA find anyone to be working illegally during a planned or unannounced visit.

The UKBA has now incorporated an ‘Employers Right to Work Checklist’ into the ‘Preventing Illegal Working in the UK’ guidance, setting out the following 
three-step-procedure:

  • asking for acceptable documents showing right to work – whether 
an employee is a British national, 
EEA national or non-EEA national 
will determine the types of 
acceptable documents to prove 
their right to work eg a passport, national ID card, biometric residence permit of UK visa;
  • checking the validity of the documents – employers must satisfy themselves that the documents are genuine and that the person presenting the documents is the rightful holder and allowed to do the type of work they have been offered;
  • taking a copy of the documents – photocopies must be taken of the original documents in order to establish a statutory defence.

Not all UK businesses are aware of their obligation to carry out document checks before employment commences and during the course of employment for their non-EEA staff population, and this may be a result of the fact that UKBA guidance and advice are not easily accessible. Over the years we have seen an increasing number of reports in the media where companies have been found to employ people without the right to work in the UK, but historically very little information has been provided by the government to explain what steps need to be taken to ensure that document checks are carried out properly.

Yet, failure to carry out document checks is only half of the problem; not all businesses will understand what visa categories will enable people to work in the UK and the type of work that they may be able to undertake. For example, the rules relating to a Tier 4 student’s ability to work in the UK are not always clear cut, especially if they have already completed their course but still have permission to remain in the UK. Without employers having detailed knowledge of the immigration rules on receiving training, mistakes will inevitably be made.

Civil penalties

Between 1 January 2012 and 31 March 2012, the UKBA issued over 300 civil penalties across the UK, at a total value of over £3m, proving the government with a large revenue stream. The UKBA has published a list of companies issued with civil penalties which is updated and made available on the UKBA website and the government has certainly made it clear by doing so that it will ‘name and shame’ any business that is found to have employed migrants illegally.

A major household name supermarket was investigated in the summer of this year, where UKBA officials arrested more than 30 students for alleged breaches of visa terms that restricted the amount of hours they could work. In November 2012, it was announced that the company has been fined £115,000 for breaches involving 23 workers, although UKBA officials decided against revoking the supermarket chain’s sponsor licences. Smaller companies may not have been so lucky; between December 2011 and March 2012, the UKBA revoked the licences of 130 Tier 2 sponsors and ten Tier 5 sponsors. For a major business, the fine may be relatively small, however, for many smaller businesses, a civil penalty of £115,000 would be financially crippling.

The government is determined to crack down on illegal working and carry out intelligence-led operations, often in partnership with other agencies (such as Trading Standards, Health and Safety Executive and HM Revenue and Customs), which will lead to the imposition of more fines if employers do not start to carry out appropriate checks and have the right systems in place to prevent illegal working.

COMPLIANCE UNDER THE 
POINTS-BASED SYSTEM

Sponsors under Tier 2, Tier 4 and Tier 5 of the points-based system are subject to inspections or visits from UKBA immigration officials, to ensure that they remain compliant with their sponsorship duties.

Sponsors are required to maintain records with respect to their migrant workers or students, which will include holding copies of passports and evidence of their right to work or study, qualifications, salary information and so on. With the responsibility falling on employers and educational institutions to monitor, track and ‘police’ migrant workers and students, they are open to a great deal of scrutiny from the UKBA, particularly during inspections and visits from immigration officers.

While the UKBA does not have power to fine sponsors for the misuse of their licence, they can suspend licences pending further investigation, reduce the number of migrants an organisation can sponsor and revoke licences. The UKBA also has the power to prosecute sponsors who commit immigration offences.

As previously stated, the UKBA revoked the licences of 130 Tier 2 sponsors and ten Tier 5 sponsors between December 2011 and March 2012 (data taken from the report of the Home Affairs Committee printed in July 2012). Tier 4 sponsors have not escaped the scrutiny of the UKBA; many educational institutions also faced investigation and the revocation of their licences this year. The widely reported revocation of the London Metropolitan University’s Tier 4 sponsor licence was the result of a UKBA visit to determine whether the university was complying with its duties as a sponsor. Criticism was made of the university’s attendance checks and the UKBA concluded that, out of a sample of 101 students, a quarter did not have 
permission to be in the UK. We understand that the university is in the process of challenging the ban on its recruitment of overseas students; the loss of international student fees could be damaging for the university and the removal of their Tier 4 licence affects their ability to remain competitive.

It is important for any organisation with a sponsor licence to incorporate immigration compliance into HR practices and procedures. Certain businesses and educational institutions will rely on a migrant workforce/student population and turning a blind eye to obligations that fall under the terms of a licence is just simply not a risk worth taking.