Dismissing employees due to right to work issues

In the final article of the series, we consider the options available to employers when they are unable to satisfy themselves that an employee retains the right to work in the UK and how to effect a fair dismissal in these circumstances.

Employers are under a positive duty to prevent illegal working and are required to check that an employee has the right to work in the UK prior to the commencement of employment. In many cases, the employee will have the right to work indefinitely and so it is not necessary to undertake further checks during employment. However, in other cases the employee will only have limited leave to work in the UK. In this situation, the employer is required to undertake further checks to ensure that the individual continues to have the right to work. Employees may also lose their right to work prior to the expiry of a visa, for example if the relationship, upon which a visa is based, breaks down.

If an employer finds themselves inadvertently employing an individual who does not have the right to work in the UK, it risks a criminal penalty (unlimited fine and imprisonment) and/or a civil penalty of a fine of up to £20,000. In this situation, an employer should take steps to terminate the contract immediately in order to avoid such liability, particularly if the employer has a sponsor licence as this licence could be at risk. However, this gives rise to the risk of an unfair dismissal claim. If the individual genuinely did not have the right to work in the UK, the employer could rely on illegality as the potentially fair reason for dismissal.

However, sometimes the situation is not so clear. If the individual has the right to work but is unable to provide the necessary proof, it would not be an illegal contract and so the potentially fair reason of illegality could not be relied upon to dismiss the employee fairly. The employer would have to justify the dismissal under 'some other substantial reason' (i.e. the employer has reasonable grounds to believe that the employee does not have the right to work in the UK). The employer will find they are under greater scrutiny from the Employment Tribunal if they fail to follow any process in carrying out the dismissal.

Recommended process

Given this uncertainty and the risk of unfair dismissal claims employers should: 

• make their best efforts to ensure that they investigate an employee's immigration status in good time before the expiry of an employee's limited leave to remain;
• ensure that an individual's immigration status and necessary dates are recorded and maintained with appropriate flags and alerts so that you are aware, in good time beforehand, of the dates up on which the employee's right to work expires;
• at least six to eight weeks prior to the expiration date, check with the employee whether she/he intends to apply for a further visa and provide such support as necessary;
• know which rules apply. For example, in some cases an application cannot be submitted until 28 days prior to the expiration date so ensure that you are aware of the necessary timescales;
• request that the employee confirms when the application has been submitted.

In the event that the employee has not made the application, a short timescale (five to seven days) should be provided for her/him to demonstrate that the application has been made, failing which a meeting should be arranged to discuss the employee's continued employment and they should be warned that dismissal could be a potential outcome. Depending on the employee's situation and the timescales available, the decision to dismiss may be deferred to a later date pending action by the employee to provide the correct information.

In the event of a pending immigration application, the company should satisfy itself that the employee's application is valid and preserves the employee's leave on the same basis as she/he had been working previously (including by using the Employer Checking Service).

Grace period

Upon receipt of a positive check, the employer has a 28day grace period following the expiry of the right to work before becoming criminally liable for illegal working. Communications should continue with the employee during this period but if they are unable to provide evidence of the right to work prior to the end of this period, the employer should move to dismiss.

If there has been some failure in the recommended process, or the employer finds itself otherwise in the situation of employing an individual who is unable to provide evidence of continued right to work on the expiry date of the visa, it should consider immediate dismissal.

Steps to follow when dismissing

A meeting should be held with the employee immediately (either by phone or in person), to understand what steps have been taken to obtain the necessary right to work documentation.

The employer should use the Employer Checking Service as this will provide confirmation of any outstanding application.

In the event of a negative response, a further meeting should be held with the employee on the same day during which the employee should be notified that they are being dismissed.

Even in this situation, there still remains a risk of an unfair dismissal claim in the event that the employee is not in fact working illegally. We therefore recommend that the employee is offered the right of appeal so that the employer has the opportunity to correct the decision in the event that it was wrong. For example, the application may have been made in time but not yet processed and so it did not register on the Employer Checking Service.

A dismissal in this situation would be without notice. Ideally, all contracts will have a clause requiring the employee to be able to demonstrate that they have the right to work in the UK - an employee would be in fundamental breach of their contract by failing to provide evidence of that; giving the employer the right to dismiss without notice.

Where there is no such clause, some more cautious employers may consider making a payment in lieu of notice in this situation, to avoid a wrongful dismissal claim, but this may not be necessary and could always be offered at a later stage, as part of settlement negotiations in the event of a threat of a claim.

If an employee is working illegally, suspension is not an option. The individual is still be employed while suspended, exposing the employer to criminal sanctions and large fines.

Key point

The process for checking right to work documents should be commenced at an early stage to avoid the need to make a last minute decision on termination at or after the date of expiry of right to work. It will then only be in exceptional circumstances that the company is forced to dismiss summarily with limited investigation.