Employers beware of mistaken belief that employees are not entitled to work in the UK

17 November 2011

The recent Employment Appeal Tribunal case of Okuoimose v City Facilities Management (UK) Ltd has highlighted the potential risks for employers if they suspend or dismiss an employee on the mistaken belief that the employee is not entitled to reside and work in the UK.

Ms Okuoimose was employed by City Facilities Management (UK) Ltd (City Facilities) as a cleaner. As the family member of an EEA national through marriage, she had the right of residence in the UK and was thus entitled to work in the UK. This right was evidenced through a residence card endorsed in her passport with an expiry date of 8 July 2010. On that date, City Facilities suspended Ms Okuoimose without pay on the mistaken belief that she was no longer entitled to work in the UK. The company contacted the UK Border Agency, which stated that it could not confirm that Ms Okuoimose was entitled to work in the UK and warned that unless she could provide evidence of her entitlement to work, City Facilities could be liable for payment of a civil penalty for employing an illegal migrant worker. City Facilities dismissed Ms Okuoimose on the grounds of illegality. It reinstated her when later she provided evidence that she was entitled to work in the UK. However, she brought an Employment Tribunal claim for unlawful deductions from pay during the period of her suspension.

At first instance, the Employment Tribunal held that the employment contract was illegal and unenforceable during the suspension period and Ms Okuoimose was unsuccessful in her claim. In the Employment Appeal Tribunal (EAT), this decision was overturned. The EAT held that the case turned on whether Ms Okuoimose at any time ceased to be entitled to work in the UK. The application for a residence card had no effect on that right, as the residence card was evidence of the right, rather than the means by which the right was created. The EAT found that, at first instance, the Tribunal had been influenced by irrelevant factors in the determination of whether the contract was illegal, namely the reasonableness of City Facilities’ behaviour, the reasonableness of its belief and its concerns regarding financial penalties.

The type of situation which City Facilities faced is a challenging one for employers. On the one hand, if the employer does not meet its obligations under Section 15 of the Immigration, Asylum and Nationality Act 2006, by requesting evidence of the right to work, it risks a civil penalty imposed by the UKBA for employing a person who is not entitled to work in the UK. It is also at risk of being charged with a criminal offence, if it knowingly employs an individual who does not have permission to undertake the work for which he/she is employed. On the other hand, the employer faces potential employment tribunal claims if it suspends or dismisses the employee. Possible claims include unlawful deductions from pay (as in the above case), unfair and constructive dismissal, and discrimination claims. Legal advice on the relevant immigration and employment issues is necessary for an employer to minimise the risk of falling foul of these pitfalls. It will be important for an employer to understand accurately the immigration status of the employee and, in light of that, assess what course of action to take from an employment law perspective.

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