DIRECTORS AND OFFICERS

Immigration related risks in a “compliant environment"

20 December 2019

Tesco fined £115,000 for employing foreign students who were breaking the conditions of their visas” 

Daily Telegraph - 6th November 2012

Immigration raid on Byron Hamburgers rounds up 35 workers” 

The Guardian - 27th July 2016

Since the introduction of the Immigration Act 2014, the Conservative government has been open about its willingness to create a “hostile environment” for users of the immigration system, not least anyone who may not have a lawful basis to remain in the UK.  It has meant that not only employers but also landlords and banks have been required to take a more active role in assessing the immigration status of customers and tenants.  However, in the wake of the Windrush scandal, in June 2018 then Home Secretary Sajid Javid announced “I don’t like the phrase hostile” and instead went for a “compliant environment.”

Regardless of the term for it, what is clear is that D&Os must ensure focus on immigration compliance is maintained at all times.  Breaches would not only affect the business, but also potentially the individuals responsible and criminal prosecution is not off the table.  Where a director commits an immigration offence they could be disqualified from being a company director due to being deemed ‘unfit.’

Authorising Officers – are you one?

A key tool for UK employers who need to recruit talent from outside the EU is Tier 2 of the Points Based System.  Whilst the government plans to introduce an Australian-style Points Based System, there is a good chance that Tier 2 will remain at least in some guise.  All employers must have a Tier 2 Sponsor Licence to use Tier 2 and a central feature is that certain ‘key personnel’ must be appointed.  The person with overall responsibility for the Sponsor Licence is the Authorising Officer (AO).  The AO must be a UK based senior level employee or office holder (such as a director) in the UK company.  The Home Office will at some stage carry out an onsite audit of the company’s use of its Tier 2 Sponsor Licence.  Such audits are often unannounced and so the AO and other key personnel must be ready; no less so in relation to the company’s policies and systems to prevent illegal working.

Prevention of illegal working – what are the risks?

To have a statutory excuse against employing someone illegally in the UK, employers must have taken a compliant copy of a suitable right to work document before the employment commences.  Where an employer is negligent and does not have such an excuse and a worker is found to be working without appropriate permission to do the work in question, a civil penalty of up to £20,000 per worker can be issued.  There is a public register of those companies who have been issued with a penalty and so reputational as well as financial damage is caused.  Plus civil penalties could lead to the Tier 2 Sponsor Licence being revoked.

Of more concern for D&Os will be the possibility for criminal prosecution.  Previously, the test was whether the employer was “knowingly” employing someone illegally.  Now it is much broader and includes mere “reasonable cause to believe” they may be employing someone illegally.  It is an easier trap to fall into than may immediately appear to be the case – what of an employer that diligently diarises an employee’s visa expiry date?  If that employee overstays their visa they could be working illegally and the employer would know about it.  The criminal offence can be committed by an individual of the UK employer or the corporate body and penalties include fines and/or imprisonment (maximum 5 years).  The Home Office also has the power to close a business down for 48 hours where illegal working is suspected and the employer has received a civil penalty.

HMRC, crossing the border and Brexit

Increasingly, the Home Office is joining up the processing of visa applications with other government agencies.  For example, employment records are checked against HMRC tax records and some visa applicants are receiving an unpleasant shock.  Some of our corporate clients have also started to receive letters from HMRC saying a tax inspector will visit their premises to check the details of their expatriate workforce.  In particular, they are keen to see who has been entering the UK as a short term business visitor, no doubt partly to try and align that with the short term business visitor tax rules. 

For some time the UK has not counted people out of the UK and so has struggled to adequately ‘track’ and monitor travellers.  From 2022 the government plans to rectify that, not only automatically establishing whether someone has overstayed a visa but also whether their UK tax status is correct.  Earlier this year nationals of some countries have been able to use the new eGates on arrival at airports in the UK.  Whilst great for speedier travel through the airport, as travellers do not receive a stamp in their passport or have an interaction with an Immigration Officer, there is sometimes doubt  into which immigration status they have been landed.  In addition, as part of right to work checks, employers are now required to check the worker’s first date of entry to the UK.  For those who used an eGate and so do not have a stamp in their passport, that leads to the cumbersome requirement to check the worker’s boarding pass or travel ticket to ensure they entered within the validity of their initial visa.

With the Conservative government’s majority following the general election, employers look ahead to the new post-Brexit immigration system and more immigration challenges where new rules and categories of application abound.  That includes in relation to their existing EU citizen workforce where at some point, deal or no deal, employers will be required to decipher the rules which apply to each employee and their immigration status.  For current EU citizens who do not apply to register their stay in the UK by the required deadline, do they become illegal overstayers without the right to work?  With the government’s plans to introduce post-Brexit visa applications for EU citizens, those organisations well used to travellers from Europe-wide offices freely coming into the UK are likely to encounter headaches and further immigration related risks.

Kingsley Napley LLP’s specialist immigration team has been advising businesses and individuals on all aspects of UK immigration and nationality law for over 20 years and is top ranked in Chambers and Legal 500.   

The above article is intended to highlight issues that may be of interest only.  It does not constitute advice, i.e. is not intended to be a substitute for up-to-date, fact specific and comprehensive legal or other professional advice. If you have any questions arising out of the issues raised, please contact a member of our team on +44 (0)20 7814 1200 or visit our webpage.

About the author

Tim Richards is a solicitor with extensive experience in corporate and private client immigration matters and is responsible for the knowledge management and ‘know-how’ development for the immigration team. 

Tim has wide-ranging experience across UK immigration law, including:
 
  • Brexit and European free movement;
  • Tier 2 applications and Tier 2 Sponsor Licence applications;
  • Compliance and audit issues, including right to work;
  • Tier 1 (Investor), Tier 1 (Entrepreneur), Start-up and Innovator applications;
  • Family based applications and Indefinite Leave to Remain; and
  • British nationality applications.

 

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