The former head of AJ Design (Leic) Limited has been disqualified from being a company director after an investigation conducted by the Insolvency Service revealed that his business was employing illegal workers.
Employing Illegal Workers
Background
Under the Immigration, Asylum and Nationality Act 2006 (IANA) it is unlawful to employ an individual who does not have the right to work in the UK or who is working in breach of their conditions to stay in the UK.
In line with IANA, an employer may be liable for a civil penalty or may be found to have committed a criminal offence, punishable by up to two years imprisonment and/or an unlimited fine. The maximum civil penalty is currently £20,000 and details of the penalty are published on a public register, potentially bringing the offending business into disrepute.
Facts of the case
Mr Alihusen was the sole director of the Leicester clothing company, AJ Design (Leic) Limited, from 15 January 2013. In April 2015, the Home Office Immigration Enforcement (HOIE) visited the company’s premises and found it to be employing 17 members of staff who were not eligible to work in the UK. The company was fined £255,000 by HOIE.
The company failed to pay this penalty and subsequently entered into liquidation, with Mr Alihusen being banned from acting as a director or managing or in any way controlling a limited company for a period of seven years.
The Immigration Bill 2015-2016
It should also be noted that the government has published another Immigration Bill (the Bill), which contains proposals to further curb illegal working and prevent the exploitation of migrant workers. In particular, the Bill proposes the following:
- Extending the existing criminal offence to apply where an employer has ‘reasonable cause to believe’ that a person is an illegal worker. Conviction on indictment for this offence would increase from 2 to 5 years;
- A new offence of ‘illegal working’, which will enable the earnings of illegal workers to be seized under the Proceeds of Crime Act 2002;
- An ‘immigration skills charge’ on certain employers who sponsor skilled workers outside of the European Economic Area, which will address the current skills gap in the UK workforce; and
- Requiring public sector workers in customer-facing roles to speak fluent English.
The government will issue a code of practice containing guidance on the above proposals.
Employers need to be aware of the effect that the key proposals above will have on their business and how it will change the responsibilities of HR staff and managers when employing foreign nationals.
Key changes for employers to consider
- The new Bill increases the maximum penalty for employing an illegal worker to £20,000 per illegal worker, with a starting point of £15,000 for a first-time offence.
- A warning letter will no longer be issued to employers on a first-time offence, and employers will be expected to be aware of their responsibilities without being reminded of them.
- Employers will no longer be required to complete a right to work check every year until the worker’s visa expires. Instead, employers must simply conduct a follow-up check at the expiry of the visa.
- International students will be required to provide evidence of their term dates as part of the right to work checks to prevent them breaching their visa.
- Employers may have to pay an NHS charge on any foreign national they employ to contribute to the costs of healthcare used by the migrant whilst in the UK.
Best practice
Employers must recognise their responsibility for preventing illegal working in the UK and check that internal processes ensure immigration law compliance and protect the employer from penalties and negative publicity.
The following is advised:
- Take copies of right to work documentation prior to employees starting work and check that these are valid e.g. visa and passport.
- Retain evidence of an employee’s right to work and ensure these stay up to date.
- Ensure your licence notifications are up to date. If there is a change to a foreign worker’s details, the licence must be updated within 10 working days.
- If you discover a discrepancy with an employee’s paperwork, take advice on your options prior to dismissal.
For more employment law advice or to comment on this article contact us to speak to a member of our employment law team.