A restaurant owner has been disqualified from being a director of his own company, iNaga, because he employed illegal workers. His disqualification is effective from 17 September 2024 and he is prohibited from being involved in the promotion, formation or management of any UK company until September 2030. This six-year ban from directorship came with a £20,000 fine. Ultimately the company entered liquidation in June 2023 with liabilities of more than £75,000, including the unpaid fine.
What is an illegal worker?
An illegal worker is someone over the age of 16 and who does not have the right to work in the UK but carries out work here.
UK employers have a duty under the Immigration, Asylum and Nationality Act 2006 to prevent illegal working and those who do not may be at risk of severe consequences. Sufficient right to work checks, prior to an individual starting their role, are required to make sure the job applicant can work in the UK.
In this recent case, the director recruited two workers who were from Bangladesh and did not possess the right to work. The illegal workers were discovered during an Immigration Enforcement raid of iNaga in 2023. He had not completed the necessary right to work checks.
Consequences for employing illegal workers
Employing illegal workers in a UK based company can lead to severe consequences.
If you knew, or ought to have known, that an individual you were employing did not have the right to work, but you employ them anyway then as the employer your risk a criminal sentence of up to 5 years imprisonment and/or an unlimited fine. For the individual, they could face up to six months imprisonment and/or an unlimited fine.
Even if the above does not apply or was not pursued, there is still risk of an employer receiving a civil penalty (a fine) unless there is clear evidence of them having conducted a right to work check in accordance with Home Office guidance before employment began. The maximum civil penalty for illegal working where a check should have been conducted on or after 13 February 2024 is £45,000 per worker for a first offence and up to £60,000 per worker for routine violations. If the employer was also a registered sponsor, it could lead to revocation of their sponsor licence and a ban on applying for another one for a period of time.
For the individual, being caught as an illegal worker could lead to deportation and a re-entry ban into the UK for a number of years.
Additionally, as this case shows, there is the potential to be disqualified as a director.
How does this affect me?
It can be a confusing time for all employers and company directors in the UK. As the Insolvency Service and their partners at the Home Office clamp down on employers who fail to comply with their statutory obligations, the importance of conducting right to work checks correctly has never been higher.
The Home Secretary, Yvette Cooper, announced in July that the government would crack down on employers who are hiring migrants illegally and over the course of the recent operation, more than 275 premises were targeted. Employers need to be vigilant when employing new recruits.
Given the increased scrutiny and the potentially severe consequences getting it wrong, we would advise any employers to seek the necessary help and advice where necessary.
How can we help?
We anticipate employers will be aware of the risk of recruiting illegal workers by mistake and will be keen to improve upon their existing frameworks and systems for conducting right to work checks. It would be wise for employers to have an up-to-date right to work check in place, to complete follow-up checks on time-limited employees, keep sufficient documentary evidence, and to follow immigration law updates.
Download our right to work check audit here.
If you need help or advice performing your right to work checks, or you have any further questions on business immigration, please don’t hesitate to get in touch.
