Under section 8 of the Asylum and Immigration Act 1996 (“AIA 1996”) an employer is guilty of an offence if it employs a worker subject to immigration control who does not have valid and subsisting leave to remain or is subject to a condition precluding him or her from taking up employment in the UK.
An employer can fairly dismiss an employee if continued employment would breach a statutory restriction (section 98(2)(d) Employment Rights Act 1996 (“ERA”)). In such circumstances the statutory procedures do not need to be followed. If there is doubt about whether continued employment would breach a statutory restriction this may amount to some other substantial reason for dismissal under section 98(1)(b) ERA. In these circumstances the statutory procedures should be followed.
In Klusova v London Borough of Hounslow the Court of Appeal has held that an employee was automatically unfairly dismissed in circumstances where the employer had been incorrectly informed by the Home Office that continued employment would be in breach of a statutory restriction and therefore did not follow the statutory procedures.
Ms Klusova is a Russian national who at the time of her employment had leave to remain until 15 May 2004. She made an application for on extension of her leave to remain on 14 May 2004. She did not receive an immediate response to her application and continued to work. In March 2005 during a Home Office investigation of Ms Klusova’s immigration status Ms Klusova’s employer, Hounslow Borough Council, was notified by the Home Office that Ms Klusova did not have permission to work in the UK. She was subsequently detained by the Home Office. Hounslow asked Ms Klusova for proof of her entitlement to work in the UK which she did not produce.
In August 2005 Ms Klusova was dismissed. Hounslow did not follow the statutory procedures. In November 2005 the Home Office confirmed to Ms Klusova, who in turn notified Hounslow, that they had received her 14 May 2004 application and her original leave was extended until her application was determined. Ms Klusova brought a claim for unfair dismissal.
The Court of Appeal upheld the Tribunal’s original decision that because, as a matter of fact, there was no breach of a statutory restriction by continuing to employ Ms Klusova, Hounslow could not rely on section 98(2)(d), despite Hounslow’s genuine belief, based on what they had been told by the Home Office, that to continue to employ Ms Klusova would be in breach of a statutory restriction. The Court of Appeal held, however, that Hounslow’s genuine belief in the unlawfulness of continuing to employ Ms Klusova was capable of amounting to some other substantial reason for dismissal under section 98(1)(b). As Hounslow had not followed the statutory procedures when dismissing Ms Klusova, her dismissal was automatically unfair.
What this means for employers
When dealing with employees subject to immigration control employers should be aware that, if an employee makes a valid application before their current permission to work expires, his or her permission to work will be deemed to be extended until such time that application is refused. Employers should ensure that they have documentary evidence of a valid in-time application having been made by an employee and therefore of their right to continue working.
Employers should proceed with caution if it is unclear whether continuing to employ an employee would actually be in breach of a statutory restriction. Where an employee’s immigration status is unclear and employers have real concerns about continuing to employ an individual, employers should conduct a reasonable investigation and follow the statutory procedures to ensure the dismissal is potentially fair for some other substantial reason.
Employers are advised to avoid making reference to breach of a statutory restriction in any dismissal letter and should state that the dismissal is based on a genuine belief based on reasonable investigation that the employee is not entitled to work in the UK.
The Home Office has announced new measures to prevent illegal working that will take effect in February 2008. As part of these measures employers who negligently hire illegal workers will be subject to a maximum fine of £10,000 per illegal worker. Employers who knowingly hire illegal workers will be subject to unlimited fines and imprisonment. Employers should ensure they have sufficient processes in place to prevent illegal working.