We have had a spate of questions recently from employers who have discovered or who suspect that one of their employees is working illegally. This is a surprisingly tricky area of the law and employers are required to balance their obligation to prevent illegal working with the employment rights of the individual in question.
Obligations to prevent illegal working
The two main offences in respect of employing individuals illegally are:
- the civil offence of negligently employing someone who does not have the right to work; and
- the criminal offence of knowingly employing someone who does not have the right to work.
Employers risk significant civil fines of up to £10,000 for each individual who does not have the right to work in the UK or uncapped criminal fines in addition to imprisonment of up to two years. In view of the serious consequences of a failure to comply with the legislation, it is crucial that employers carry out the requisite checks and procedures in respect of documentation evidencing an entitlement to work before the employment relationship commences.
What to do if you discover illegal working
If, after employment has commenced, you obtain information which leads you to believe that an employee is working illegally, you should immediately investigate the situation. The knee-jerk reaction in these cases is often to dismiss the employee immediately but employers should be aware of the risks involved in doing so.
All employees who have been employed for two years (one year for employees whose employment started before 6 April 2012) have the right not to be unfairly dismissed and employers who fall foul of the Employment Rights Act 1996 (“ERA”) can be liable for up to £72,300 by way of unfair dismissal compensation.
In order to dismiss an employee fairly, an employer must demonstrate that there is a potentially fair reason for doing so and that it has followed a fair procedure. If illegal working is discovered, employers can look to rely on the fact that a dismissal is potentially fair if the employee’s continued employment would contravene any statutory restriction. However, in order to rely on this basis for dismissal, it is necessary to show that continued employment would actually be illegal. It is not enough that the employer simply suspects the employee is working illegally, or even has a reasonable belief of that fact. This has caught employers out in the past who have been too quick to dismiss employees without a clear understanding of their immigration status.
A second potentially fair reason for dismissal in these cases is “some other substantial reason”. This is a catch-all provision in the ERA and case law shows that it can capture dismissals in scenarios where the employer believed that the employee did not have the right to work in the UK (even in fact if that belief is incorrect). Even on this basis, however, it will still be necessary for an employer to demonstrate that it had reasonable grounds to believe that the employee was working illegally.
If an employer can show a potentially fair reason for dismissal, in order to avoid liability for unfair dismissal, it must also demonstrate that it has gone through a fair procedure in the circumstances. As a minimum, this should involve investigating the documentary evidence surrounding the employee’s legal status and meeting with them to discuss the position. If the employee is to attend a meeting which could result in their dismissal, they should be informed of this fact and of their right to be accompanied to the meeting by a colleague or trade union representative.
A sense of perspective is very important in the cases and that is particularly so when employees are vague about the state or progress of their permission to work in the country: this is often unfortunately the case. Bearing in mind the potentially severe civil and criminal sanctions, employers need to be bold. That is not to say, however, that they should be peremptory and they should jump quickly through a few employment hoops in advance of any dismissal to avoid the galling scenario of having to pay compensation to someone whom they genuinely believed was not lawfully entitled to work here.