A SYSTEM of civil penalties for employers that hire illegal migrant workers, introduced by the government in 2008, is being reviewed as part of a consultation on the prevention of illegal working regime.
The legislation was designed to encourage employers to prevent illegal working without criminalising those who make honest mistakes in operating their recruitment and employment practices.
The prevention of illegal working regime is now under review, with the latest Immigration Bill proposing changes that will make it easier for civil penalties to be recovered. A recent public consultation on increasing the maximum civil penalty and changing the way in which employers need to comply was published in October.
Nearly 500 individuals, employers and representative organisations responded to the consultation on the proposed changes. The results indicate support for the government’s aims to get tough on rogue employers while supporting compliant employers.
With more than 60% support from respondents, the government will increase the maximum civil penalty from £10,000 to £20,000 per illegal worker when an employer commits a breach on more than one occasion. The consultation did not explain how the government came to the increased figure, which will have a disproportionate impact on small businesses.
An employer can establish a statutory defence against illegal working by undertaking prescriptive right to work checks, eg copying a migrant’s original passport and UK immigration permission, where appropriate.
Currently, an employer must complete the right to work checks before employment commences, and additional checks must be carried out every 12 months for migrants with time-limited immigration permission. More than 80% of employers were in favour of the removal of the annual checks and the government intends to remove this, replacing it with the requirement to undertake a check ‘at the point of expiry’ of the migrant’s immigration permission. This will close the loop hole that gave employers a statutory defence during the 12 months following the annual check, despite the migrant’s immigration permission expiring during this period (provided that the employer did not knowingly illegally employ them).
A significant majority of respondents agreed with the calculation of civil penalties being simplified and the government has therefore decided to remove the partial right to work check, eg copying only one of the prescribed documents, as a mitigating factor when calculating the level of the civil penalty.
The government claims that its intention is to implement a straightforward, transparent and consistently applied process, and one which provides clarity to an employer about the likely level of sanction in the event of non-compliance. More than 80% of respondents agreed that, if an employer has already received one or more civil penalty notices, this should be considered an aggravating factor when determining the current penalty level. The notion of more severe penalties for repeat ‘offenders’ is not unreasonable but there is a real danger of employers being branded repeat ‘offenders’ for numerous breaches that occurred for different reasons.
Further, there needs to be a distinction between those employers that make honest mistakes and those that intentionally flout the law and fail to carry out any checks. Many large international businesses begin their compliance journey well-intentioned, implementing robust right to work practices and procedures. However, due to a high turnover of staff or restructuring, these fall to the wayside and the cracks appear when it is too late and an illegal worker is found to be working for them.
There is frequently tension between already over-stretched HR teams, trying to instil effective prevention of illegal working practices, and the business managers who needed migrants working for them yesterday. Whatever the size of a business, it will need to implement effective systems to which its staff can apply due care and attention, protecting the business from a civil penalty.
Employers should welcome the fact the government has listened to the majority of respondents and made a sensible decision to retain the current warning letter for first-time breaches – a saving grace for first-time offending employers that are otherwise compliant, co-operative and have reported the suspected illegal working.
A majority of respondents were supportive of directors and partners of limited liability businesses being held jointly and severally liable for civil penalties to allow recovery action to be taken against them if the business does not make payment. While the government acknowledges this, it will not be implementing this proposal, taking heed of the warnings that such a measure may have a wider impact on company and partnership law. So for now, directors and partners can breathe a sigh of relief.
The above amendments to the current regulations should be taken forward by the government in April 2014. As with all changes to UK immigration legislation and policy, the devil will be in the detail. Employers should take the opportunity to review their right to work practices, ensuring they are compliant – as the proposed changes will make non-compliance a costly mistake.
Natasha Chell is a partner at Laura Devine Solicitors