Tier 1, tier 2 and tier 5 applications - enhanced criminal and other risks for employers (including managers, directors, HR representatives, etc) and individuals
We have become aware that the UK Border Agency (UKBA) has recently started to refuse applications to switch into tiers 1, 2 or 5 of the points based system (PBS) by work permit holders where the information supplied in the PBS application is substantially different to information which is held by UKBA in relation to the employee's work permit. They have also curtailed the leave of the individual employee in such circumstances.
Risks to employers
Where an allegation arises that work permit related employment has commenced or continued unlawfully because, for instance, incorrect information was provided to UKBA by the employer in the initial application or substantial changes of employment were not notified to UKBA by way of a new work permit application or a technical change of employment, there are a number of criminal and civil risks which are emerging which may be relevant to corporate entities and key individuals who are involved in operating and managing the organisation (managers, directors, HR teams etc).
UKBA may refer the organisation to the Crown Prosecution Service (CPS) to investigate allegations that a corporate entity and/or key individuals have facilitated a breach by an individual of UK immigration law.
Individuals may be in breach of immigration law (and hence employers could be at risk of an accusation of facilitating a breach if they have continued to employ them) in the following circumstances:
- they have worked unlawfully (ie under an incorrectly obtained work permit, for instance where information has not been fully disclosed or where an advert has been purposefully designed around one individual)
- their employment ceases to be authorised (eg by a substantial change to the duties or failure to notify of a technical change)
- they have breached the conditions of their stay (ie by working in unauthorised employment)
- they have overstayed.
There are of course additional sanctions under s8 of the 1996 Act and s21 of the 2006 in relation to instances where the corporate entity/key individuals knew the individual was working in breach of immigration law and general sanctions (fines/civil penalties) in relation to illegal employment where there was no knowledge.
As the full ramifications of the system emerge, further risks may become apparent.
The main risk of prosecution for corporate entities and key individuals within them comes from the following offences:
- Facilitating the commission of a breach of immigration
law
(Statutory maximum fine, six months imprisonment or both. If guilty on indictment unlimited fine, 14 years imprisonment or both). - Making or causing to be made to an immigration officer a false return, statement or representation (level 5 fine, 6 months imprisonment or both).
- Illegal working sanctions under s8 1996 Act and s15 &
s21 2006 Act
(Level 5 fine, 6 months imprisonment or both and civil penalties).
Definition of a substantial change of employment
As referred to in the internal guidance to caseworkers when dealing with work permit applications (under the pre November 2008 work permit scheme), a change of employment application (ie a fresh application) relating to an existing work permit holder employee should have been filed in the following circumstances*:
- the permit holder's salary has risen significantly in addition to annual increments as a higher salary was likely to attract more applicants when the post was advertised correctly;
- the permit holder's salary has been reduced below NMW or the 'going rate' as this undercuts resident workers;
- the permit holder's hours have been significantly reduced/increased (by at least 10%) as working more or less hours may attract other applicants when the post is advertised correctly;
- the permit holder's duties have changed due to promotion, demotion or restructuring, as the job will be different to that for which the original application was approved.
In cases where the permit holder's personal details changed (for instance due to marriage, etc) or where their employment address changed, best practice has been to notify UKBA of the change as a technical change of employment (unlike a substantial change, this did not require a new application or test of the resident work-force.)
Risks in relation to turnover, directors, reputation
Where a company and or its managers/directors, etc are found guilty of immigration offences there is potential for the company's turnover to be confiscated. In a 2008 case the Court of Appeal confiscated under the Proceeds of Crime Act a quarter of the employer's turnover during the period when workers were employed without appropriate permission. Additionally directors may be subject to disqualification and other sanctions. Association with illegal working is likely to have an adverse impact on reputation with associated potential impact on shares, contracts etc.
Risks to sponsors
In addition to prosecution and civil penalties, sponsors who are found to have breached immigration and/or criminal law may have their sponsor licence removed or downgraded to a 'B' rating by UKBA. Sponsored migrants are likely to have their leave curtailed in such scenarios.
Employers who have applied for a sponsor licence will be aware that appendix B of the sponsor licence guide outlines a number of immigration related criminal offences (including those referred to above).
Additionally in order to obtain a sponsor licence employers will have submitted a declaration to UKBA under which they permit UKBA to:
- enter their premises at any time and check information;
- share information with HMRC or other agencies and/or other governments.
This means that UKBA and other departments have permission from employers who have a sponsor licence to submit them to greater scrutiny than those who do not have a licence.
Employment law related risks
If an employee's leave to remain is curtailed due to the negligent or criminal action of his employer, then a range of employment related claims are open to the employee.
Equally it is essential that employers do not exclude non-EEA nationals from the opportunity to apply for positions in their organisations because such action may be regarded as discriminatory and there is recent case law on this point.
In terms of dismissing employees whom an employer suspects do not have permission to work in the UK, care must be taken to ensure that the dismissal process is conducted lawfully. There is case law which suggests that immediate dismissal may not always be lawful. There is also case law which suggests that courts will not deem an entire contract of employment to be illegal where only part of the work has been undertaken without appropriate immigration permission.
Risks to individuals
In cases where an application under the points based system (tier 1, 2 or 5) is refused because of a discrepancy in information relating to, for instance, previous salary or the job description or where illegal working is alleged, UKBA has also started to curtail the leave of the individual. The individual will have a right of appeal against such action.
If UKBA makes a referral, the Crown Prosecution Service (CPS) may prosecute an individual who has breached UK immigration law, for instance in relation to working illegally, overstaying, breaching a condition of stay, making a false statement, etc. In view of the costs of prosecutions, it is more likely that removal action will be taken against an individual other than in the severest of cases.
Advice to employers
- do not issue a Certificate of Sponsorship unless you have checked the previous work permit application(s) to ensure that substantial changes were notified to UKBA by way of a fresh work permit application
- if there are discrepancies which have arisen due to a genuine reason, take legal advice as it may be possible for an explanation to be filed with the tier 2 application;
- if a work permit was obtained as a result of a recruitment test, check that the test will hold up to scrutiny and that there is no risk of an accusation that it was designed around the work permit candidate which could lead to an accusation that the work permit was issued unlawfully;
- ensure that all information presented to the immigration authorities by the employer and the employee was genuine and can be verified and that all information generally which a company presents to UKBA in any application can be verified;
- always consider employment legislation and processes;
- in cases of mergers and takeovers ensure appropriate due diligence is undertaken to ensure employees may be employed lawfully and that previous work permits have been obtained correctly.
Penningtons is trying to ensure that UKBA agrees a set of guidelines whereby a company which discovers a problem can take agreed action to remedy it without the risk of prosecution.
Right to work checks by third parties
UKBA has confirmed to us that where an employer uses a third party (recruitment agency/outsourced HR/legal representative) to perform checks on workers to establish their right to work in the UK, such checks will not avail the employer of a defence or excuse under Section 8 of the 1996 Act or Section 15 under the 2006 Act.
We are trying to secure a change to the legislation in order that third party checks may enable an employer to establish a defence or excuse. However at this stage employers must continue to undertake the checks themselves.
Jobcentre Plus advertising
Jobcentre Plus checks all adverts to ensure they do not contain discriminatory elements. This can add several weeks on to the process of placing an advert which can have a knock on effect on the time-frame for entry clearance and leave to remain applications.
*Source: B&C internal guidance- website version 2.0
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
