Illegality and the right to work in the UK

Mark Minns, 25 February 2009

It is a criminal offence to employ an employee that does not have the required permission to work in the UK. Many employers are currently taking steps to ensure that their employee ‘right-to-work’ records are up to date in order that they can ensure compliance with the changes to the Immigration Rules.

In reviewing their records, employers sometimes find that they have employees that are no longer entitled to work in the UK, or even employees that have no means of demonstrating that they were entitled to work in the UK in the first place.

Given the severe penalties associated with employing someone that lacks the required permission to work in the UK, employers will often immediately dismiss the employee, without recourse to usual good practice.

However, employers should tread carefully when doing so, and at the very least make an informed choice on how they will manage the tension that exists between complying with the Immigration Rules and general employment law.

For short service employees (those with less than a year’s service) the risks (with the exception of discrimination) are quite low in a dismissal that does not follow due process. However, some employers still take the view that they should comply with the minimum statutory dismissal procedures in any event, albeit in an abridged form.

If the employee has longer service (in particular more than a year’s service), the matter is a little more complex. In order to avoid a claim for unfair dismissal, the employer will need to establish a potentially fair reason for dismissal. There are three potentially fair reasons that could be applicable in a case where the dismissal is due to the employee not having the required permission to work in the UK, as follows:

1.The first potentially fair reason that could be applicable is that it is illegal to employ the employee, and as such it is a breach of a statutory restriction. The benefit for the company with an illegality dismissal is that the statutory dismissal procedures will not apply, and the dismissal can be implemented without delay. However, it can be risky to assume that illegality applies in all cases, and it is usually best practice for illegality to be one of the reasons for dismissal, rather than the only one.

The question of illegality was recently considered in the case of Blue Chip Trading Limited v Helbawi. In this case Mr Helbawi was permitted to work under a student working visa, but in fact worked in excess of his permitted working time. Mr Helbawi brought a claim that he had been paid less than the national minimum wage, and his employer sought to argue that by working in excess of his permitted working time, the employment contract was illegal and as a result there was no liability. The Employment Appeal Tribunal held that notwithstanding the flagrant and deliberate breach by Mr Helbawi of his permitted working time, he was still entitled to bring a claim for those hours that he was permitted to work.

2.The second potentially fair reason for dismissal could be misconduct. This reason can be made out if the employee has provided fraudulent documents, has lied in the process when his or her right to work was being considered, or has otherwise sought to mislead the employer. Many employers pre-empt such a situation by making it clear in their documentation that requests evidence of an employee’s right to work in the UK that if the employee deliberately misleads the employer, then a gross misconduct dismissal would follow.

3.The third potentially fair reason for dismissal could be some other substantial reason. This would be a reason of last resort, and could be open to the employer where it had a ‘reasonable belief’ that the employee in question was not entitled to work in the UK. The fact that the employer’s belief turns out to be incorrect will not necessarily make the dismissal unfair, provided that the belief is genuine in the first place.

When dismissing an employee that is not entitled to work in the UK, employers could where appropriate consider using all three of the above reasons, and taking each as being a standalone reason for the termination of employment.

Finally, employers should ensure that if they are going to pay notice (and perhaps not dismiss summarily for gross misconduct), then they should ensure that a payment in lieu of notice is made. The employee should certainly not be permitted to work a period of notice.