The civil penalty regime introduced by section 15 of the Immigration, Asylum and Nationality Act 2006 on 29 February 2008 is one of a range of sanctions that can be imposed in relation to illegal employment. Those employers who are not fully conversant with how to successfully establish a statutory excuse against liability to a civil penalty risk paying up to £10,000 per illegal worker employed.
Common problems with establishing the statutory excuse
An employer is able to establish a statutory excuse if it can be shown that the employer complied with the requirements set out in the Immigration (Restrictions on Employment) Order 2007 (as amended).
The procedures to follow are outlined in detail in the Border and Immigration Agency document, Comprehensive guidance for employers on preventing illegal working, which should be read in conjunction with Guidance for employers on the avoidance of unlawful discrimination in employment practice while seeking to prevent illegal working.
Some of the most common mistakes employers make when seeking to establish a statutory excuse include:
- Failing to correctly identify whether a worker is an employee (in respect of whom a civil penalty may be applied) or an independent contractor (in respect of whom a civil penalty cannot be applied)
- Failing to undertake document checks for all employees
- Failing to undertake document checks prior to (rather than on) the first day of employment
- Failure to check and keep documents in the prescribed combinations
- Failure to keep copies of the documents as prescribed (for example not keeping a copy of the cover of passports or both the front and back of Identity Cards for Foreign Nationals)
- Failing to undertake and document 12 monthly follow up checks for employees holding limited leave to remain
- Failure to undertake a check with the Employer Checking Service for employees with outstanding immigration applications
- Failing to scrutinize documents closely enough to detect a reasonably apparent forgery, that the document does not belong to the holder or that the document does not confer entitlement to work as per the requirements of the employment
Dealing with civil penalties
If a UK Border Agency visiting officer detects an instance of illegal employment, a notification of potential liability (NOPL) is issued to the employer. Following review of the evidence gathered by the visiting officer by the UK Border Agency's civil penalty compliance team a notification of liability (NOL) may be issued.
The amount of civil penalty issued is determined in accordance with the document Civil penalties for employers – code of practice. The code provides for a civil penalty to be varied depending on the following factors:
- Whether the employer carried out right to work checks and if so, whether these were full or partial
- How many illegal employees were detected
- How many times the employer has previously been visited
- How many times the employer has previously been issued with a warning or civil penalty
- Whether the employer has cooperated with the UK Border Agency by reporting concerns and/or cooperating with the Agency's investigations
Where a NOL is issued, the employer must, within 28 days:
- Pay the civil penalty in full;
- Request permission to pay the civil penalty in monthly installments;
- Lodge an objection to the service of the civil penalty; or
- Lodge an appeal against the service of the civil penalty to the County Court (or Sherriff Court in Scotland)
A successful challenge may result in the civil penalty being reduced or withdrawn. It may also avoid damage to the employer's reputation and sponsor licence status (where the employer is a sponsor licence holder). On the other hand, an unsuccessful challenge may result in a higher penalty being imposed and the cost of the challenge being incurred.
Where an employer has been issued with a civil penalty, it is prudent to seek advice on the risks, costs and benefits of challenging it according to the specific circumstances of the case.
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.