Article by Jacqueline Moore and Alan Rodgers

In this article Jacqueline Moore and Alan Rodgers highlight recent trends in Civil Penalties that they are dealing with in practice, as well as providing a reminder on the key changes to Civil Penalties introduced by the 2014 Act.

Over the last 6 months or so there has been a marked increase in activity by the Home Office in taking action against businesses that are caught employing illegal workers. This increase in activity on the ground has been accompanied by new powers introduced through the Immigration Act 2014, which makes it much easier for the Home Office to enforce penalties against businesses.

With the Labour Party also promising to be tough on businesses who employ workers illegally, action and penalties against illegal employment is here to stay. Whilst everyone would agree that illegal employment needs to be tackled, unfortunately it would seem that the Home Office are continuing to pick on easy targets; small, ethnic minority owned businesses such as grocery shops and Asian restaurants, where very often owners simply do not know how to do a proper right to work check.

We have identified 4 recent trends in practice which employers should be aware of.

1.     Home Office taking tough stance at Objection Stage

Under the old system, an employer issued with a Civil Penalty could choose to appeal directly to the Sheriff Court. The Home Office, through changes in the 2014 Act, have now made it mandatory for the Home Office to get the first chance to deal with all challenges through the Objection scheme.

These written objections are made to the Civil Penalty Team itself and it is rather like asking someone to mark their own homework.

Thus far, in practice, we are witnessing the Home Office taking a very tough stance and the objection stage of the process is on many occasions, simply a paper exercise. If you are a small business owner, please note that the Home Office won't take into account your ability to pay nor will they reduce your penalty due to partial checking.  They will only cancel the penalty where it has been issued in error, or reduce it where the relevant criteria apply.

You have 28 days to lodge written objections. These are normally considered within around 4-6 weeks and if the penalty is maintained thereafter, you will have a further 28 days to challenge the penalty in the Sheriff Court.  Thus far, the Sheriff Court is proving to be a much more meaningful remedy against the Civil Penalty, but to access this remedy you must first make the objections.

2.     Increased powers to enforce the Civil Penalty

In the past, the Home Office have been criticised for their failure to collect Civil Penalties. Government figures released have revealed that between February 2008 and the end of 2012, more than 8,100 Civil Penalty notices were issued, equating to £57.5 million in fines, yet less than half - £24 million - were paid. Now, through powers introduced by the Immigration Act 2014, a Civil Penalty Notice can be enforced without the need for the Home Office to go to the Sheriff Court (as was the case previously) and obtain a separate decree.

This means, for employers, who are very often small businesses, a Civil Penalty Order can result in their bank accounts being frozen, and their business being placed in administration if they do not pay the Home Office fine.

The key message here is that if there are grounds for challenging either the issuing of the Penalty or the size, you must do so before a Civil Penalty is issued against you. Once a final Civil Penalty Order is finally issued, there is no basis for challenging the lawfulness of its issue.

3.     Home Office targeting small ethnic minority businesses

It will come as no surprise that the Home Office are choosing to target small ethnic minority businesses as opposed to larger companies. Raids can occur at any time with or without notice and if the Home Office raid your business and find an individual that has no right to work, it is most likely that they will say that he has been employed by you irrespective of whether or not you have paid him/her.

Remember, it is no defence to say that you have partially documented the individual. The only defence is a full right to work documentation check. You must read and follow this guidance:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/390363/an_employers_guide_to_right_to_work_checks_december_2014_v4.pdf

One of the key criticisms we have of the removal of the partial checking defence, is that this has not been followed through by any publicity campaign highlighting the changes to the law. Whilst larger businesses have HR departments to keep track of the new changes, small businesses are simply not aware of the changes and what they mean, until the worst happens and they end up with a large fine, which threatens to close down their business.

4.     Impact on business owners' future immigration applications

A final warning goes to those of you who are running a business in the UK with Limited Leave to Remain here.

For those who have been successful under the Tier 1 (Entrepreneur) route and have set up in business, it is vital that you follow the 'Right to Work' checks. The Home Office has recently introduced, through the general grounds of refusal, a mandatory requirement to refuse any applicant further Leave to Remain or Settlement if they have previously had a Civil Penalty imposed against them. Therefore, if you are in this category, you require to be extra vigilant and to ensure that only those who have been checked are working for you.

As can be seen from the above, this is an area of law that is becoming more complex and with the Home Office taking a very tough stance, we would urge all businesses to ensure that they follow the 'Right to Work' checks in the first instance; and, if you are issued with a Civil Penalty then please get in contact with Jacqueline Moore or Alan Rodgers on 0141 332 0086.