by Jacqueline Moore and Alan Rodgers

Given that the maximum Civil Penalty that can be imposed on a business has been increased to £20,000 per worker, coupled with the new powers introduced in The Immigration Act 2014 which make it much easier for the Secretary of State to enforce payment of unpaid civil penalties, businesses now, more than ever, require to ensure that they are civil penalty compliant.  

Making Sure Your Business is Civil Penalty Compliant

In short, to avoid a civil penalty, an employer has to ensure that she/he, at all times, complies with UK immigration law in respect of the employment of all workers.  This means, in practice, that the employer needs to have seen an original document evidencing the individual's right to work prior to that person's employment commencing.

The requirement to see documentation extends to all employees although, for British Citizens/EEA Nationals, proving that they have a right to work is fairly straightforward; sight of a valid passport; a birth or adoption certificate issued in the UK together with an official document giving the persons national insurance number and name; an identity card from an EEA country or Switzerland or a Registration Certificate or Document Certifying Permanent Residence issued by the Home Office to a national of the EEA or Switzerland will satisfy the scheme.

Right to Work Checks

For potential employees who are neither British nor from the EEA, the documentation you can rely on starts to become more complicated.  Businesses are strongly advised to familiarise themselves with Home Office guidance contained at pp14-15 of the Code of practice on preventing illegal working.

As well as actually seeing the correct document(s), an employer is also under a duty to retain a copy of the document, (even when an employee leaves your employment, you must continue to retain that document for 2 years) and the employer is required to take all reasonable steps to ensure the documentation is genuine.

Sounds pretty straightforward so far, but it is not difficult for businesses to make an innocent mistake which can lead to pretty catastrophic consequences for their businesses.  Firstly, the business may face a civil penalty of up to £20K per employee and, if that was not penalty enough, if that business has a Sponsorship licence to employ PBS migrants, it may find that their licence, itself, is at risk of suspension or, worse, revocation by the Home Office.

We now set out below some common mistakes that employers can make, based on real life cases where employers have consulted us after having been caught making the following mistakes by Compliance Officers of the Home Office.

5 Common Mistakes that Employers Make:

1.    Evidence from previous employment - Employers will often say to us, "Well, he used to work at the large supermarket down the road, he must be legal" - Do not, under any circumstances, rely on someone's previous work history to satisfy yourself of that individual's current right to work.

2.    Out of Date Visas - Often, an employee will have the right to work at the date of commencement of employment; however, the employer will then forget to diarise the visa expiry date. If this employee is caught working at the premises,  the fact that, at an earlier date a right to work existed, will not be a defense against illegal employment. Ensure your business has robust HR systems in place to ensure that all visa expiry dates are diarised ahead in order that further appropriate applications can be made.  The new code requires a business to have a thorough and consistent document-checking process in place and records of document checks for your staff to meet the effective recruitment practices standard.  

3.    National Insurance Numbers - Clients often come to us and say, "She/he had a National Insurance Number, that means they had a right to work". Again, the fact that someone has a National Insurance Number does not evidence a current right to work and evidence that you saw a National Insurance Number will not be a full defence against a Civil Penalty.

4.    "He told me he'd bring the documents in" - New employees are often introduced at a time when businesses are at their most stretched and meeting the urgent business needs can often, at the time, seem more important than the immigration paperwork. Adopt this approach at your peril - the duty is on you to ensure that you have seen the right paperwork before employment starts, otherwise you will have no defence against a civil penalty.

5.    "She was only filling in for a few weeks. I didn't think this counted as work" or "he/she was only helping out while I went to the bank" -  Increasingly, we are witnessing the Home Office targeting small businesses such as grocery shops and restaurants owned by ethnic minority business people. The Home Office's aim appears to be find someone on the premises who has no lawful basis to be in the UK and then to accuse the business owner of employing that person. The Home Office take a very wide view on what constitutes "employment" and, if someone helps you out by stacking shelves or washing dishes, then the Home Office will classify this as employment irrespective of whether you pay them or not.

Challenging a Penalty

The most important point here is that, not only can you challenge the imposition of the penalty, but you can also challenge the amount of the penalty.

Prior to 28 July 2014, an employer could opt to mount a legal challenge through the Sheriff Court or challenge the decision through the Home Office's own internal review process.  However, in order to have more control over the scheme, the 2014 Act makes it mandatory for an objection to be put to the Secretary of State before any appeal can be made to the court. 

First Stage - Written Objections to the Secretary of State

Please note that you have 28 days to lodge written objections to the Home Office and this is a strict time-scale.  We are experienced in drafting such objections and have had success in written objections resulting in a reduced fee.

Second Stage - Appeal to the Sheriff Court

If the Home Office refuses to cancel or reduce the fee, a second challenge can be made to the Sheriff Court. This takes the form of a summary application which requires to be lodged with the Sheriff Court within 28 days of receipt of the Home Office's final decision.

Your challenge requires to be based on one or more of the following grounds:-

(i)    You dispute that you are liable to pay the fine.  This may be the case where, for example, your argument is that you did not own the business or you did not employ the individual who the Home Office claims was working for you illegally;

(ii)    You did comply with the documentation requirements, including that you took reasonable steps to ensure that the documentation was genuine;

(iii)    The amount of the penalty is too high - in the most recent case in Scotland on Civil Penalties, Sheriff McGowan exercised his power to reduce the size of the penalty imposed on a business owner from £5,000 to £2,500 (

As mentioned earlier, the Home Office has recently increased the size of the penalty to a maximum of £20,000 per worker.  It is not difficult to see how, if several employees are targeted, the amounts involved can be seriously damaging to the operation of the business and why it may make business sense to challenge the penalty.

Litigation Before the Sheriff Court

One advantage of raising a Sheriff Court action is that, between the action being raised and the proof going ahead, we can act on your behalf to negotiate a lower amount through the Home Office's solicitors. If the case goes to proof, then a full hearing will take place with evidence, including witness evidence, being led by both parties.

At Drummond Miller, we have extensive experience in assisting clients in respect of the avoidance of and challenges to Civil Penalties.   All advice and representation is carried out by a team of solicitors who have the combined necessary skills and experience in both Immigration Law and Sheriff Court Procedure. 

For further information, please contact either Jacqueline Moore or Alan Rodgers on 0141 332 0086.