Nayak v Royal Mail Group Limited UKEATS/0011/15/SM

Why care?

Under Section 3C of the Immigration Act 1971 if a non-European national holds a visa and makes a valid in time application prior to the expiry of their current visa to extend their visa, or switch their visa status into another category, they retain the right to live and work in the UK under the terms of that initial or existing visa provided that a decision has not been made by the Home Office.

All UK employers are required to take and maintain evidence of their employee’s right to work in accordance with certain prescribed guidelines to establish a statutory excuse (i.e. defence) against findings of illegal working.

Whilst the requirement to undertake right to work checks, and retain evidence of those checks, applies to all employees, on 29 February 2008 the Home Office introduced civil penalties under section 15 of the Immigration, Asylum and Nationality Act 2006 where employers are found to be employing people illegally. These penalties are currently set at a maximum of £20,000 per illegal worker. Employers will have a defence against the civil penalty for those employees recruited before 29 February 2008 so long as compliant right to work checks were undertaken at the time of recruitment.

The case

Mr Nayak started work for the Royal Mail on 7 January 2008. At this point, the Royal Mail did not undertake right to work checks and retain evidence of his right to work in the UK. He made in time applications to extend his visa on a number of occasions, latterly by way of an appeal against a Tier 4 General student visa rejection. No evidence was produced to the Royal Mail about this.

Royal Mail submitted a number of Employer Checking Service (ECS) checks to verify Mr Nayak’s right to work first in March 2012 where they mistakenly gave an employment start date after 29 February 2008. The Home Office confirmed that, at that time, Mr Nayak had the right to work on the basis of his outstanding appeal and the check should be repeated after 12 months. In a second check in May 2013 they have the correct start of employment date. The ECS said that, based on the correct start date, Royal Mail did not need to undertake further right to work checks if, at the point of recruitment, the correct right to work checks have been undertaken.

Notwithstanding the ECS advice, Royal Mail wanted to ensure employees had the right to work legally in the UK. They wrote to Mr Nayak and interviewed him on a number of occasions to ask him to provide updated evidence of his continuing right to work lawfully in the UK. He chose not to provide this evidence. They explained that they were concerned that, given the passage of time, they could no longer safely assume that the application could no longer be pending and undetermined. Mr Nayak referred to Section 3C to say that this gave him the right to work lawfully. On 8 May 2014, Royal Mail dismissed Mr Nayak for some other substantial reason (namely not providing right to work evidence, and that they considered that they had taken all reasonable steps to confirm the position). On appeal he was offered a 42 day grace period during which Royal Mail suggested he submit a data subject access request to the Home Office to obtain the documentation requested. Mr Nayak chose not to do this and the decision to dismiss was upheld.

In the Employment Tribunal, Royal Mail accepted that if Section 3C applied then Mr Nayak had a continuing right to work in the UK. However, they considered they did not have sufficient evidence (having made reasonable enquiries) that Section 3C continued to apply. Mr Nayak countered that, if Section 3C applied, Royal Mail could not form a reasonable belief that he was working illegally and had no obligation to make reasonable enquiries into this. He also said that, had the Royal Mail not wrongly advised the ECS of Mr Nayak’s start date, he would not have been subject to these checks.

The Employment Tribunal and EAT agreed with Royal Mail. As Royal Mail dismissed on the basis of some other substantial reason (section 98(1)(b) ERA 1996) and not illegality (section 92(2)(d)ERA) they did not need to demonstrate actual knowledge that Mr Nayak was prohibited from working but just a genuine and reasonable belief that he could not legally work in the UK. Such a belief could be mistaken but still reasonable.

Both tribunals observed that Royal Mail had made repeated requests of Mr Nayak to confirm his status which amounted to reasonable questions which he refused to answer. The fact that Royal Mail had not carried out compliant right to work checks at the start of his employment did not, in fact, change the outcome in any event. Even had this been explained to the ECS at the outset, Royal Mail were still required to undertake the additional checks. Royal Mail had provided sufficient evidence of a reasonable and genuine belief that Mr Nayak had not demonstrated his ongoing right to work in the UK. This was assisted by Mr Nayak’s conduct when asked to make his own enquiries of the Home Office both during the four year period and when given an extended appeal period specifically to make enquiries.

What to take away

This case contains a number of interesting points which bear consideration:

Statutory excuse against illegal employment

  • Whilst the civil penalty regime was introduced in February 2008, employers must still retain compliant evidence of the right to work for employees recruited before this date to protect themselves.
  • Our experience suggests that Home Office audits and instances of the Home Office working with other government departments to identify potential illegal workers are on the increase. Ensuring you have compliant evidence of the right of your staff to work legally in the UK continues to be important.

Can you rely on the Employer Checking Service (ECS)?

  • The defence provided by the ECS is only as reliable as the information provided to it. It does not provide a defence for employees employed before 29 February 2008. Furthermore it can only provide employers with a response in relation to employees or prospective employees who have an outstanding application at the time the check is submitted.
  • If a company is provided with a partial (i.e. time limited) excuse by the ECS against illegal employment it is important to diarise to conduct the follow up check prior to its expiry to maintain the statutory excuse.

Evidencing a genuine belief – document, document, document

  • If you are concerned that you do not have evidence that one of your employees has the right to work legally in the UK, even if Section 3C applies. it is important you give the employee opportunities to produce that evidence before terminating their employment. It is not uncommon for immigration decisions and appeals to take months or even years in complex cases.
  • In some instances only the employee will be able to check their immigration position. Consider suggesting they make a subject access request if no Home Office correspondence is forthcoming.

Consider the grounds of termination

If you find evidence that someone may not have the right to work legally where Section 3C applies, we recommend you terminate their employment for some other substantial reason (SOSR) and not on the grounds of illegality (which may appear the more obvious grounds). Establishing a deference of SOSR requires you to demonstrate a genuine and reasonable belief for your decision to dismiss and not actual knowledge of illegality meaning it is easier to defend an unfair missal claim.

The future?

The Immigration Bill, when introduced in the next few months, will increase the maximum prison sentence for offences of illegal employment from 2 to 5 years. Furthermore the offence will be committed if someone should have reasonably cause to believe that someone was working illegally (rather than the current threshold of actual knowledge). This means that companies without compliant right to work evidence will be more exposed to potential civil penalties and the reputational damage that can arise in illegal working cases.

Find more articles in May’s edition of Law at Work