According to the Home Office (October 2007), people born overseas account for one in eight of the UK's working population. This creates a variety of issues for employers; especially if an employee’s work permit runs out. Two recent cases have highlighted this issue and offer guidance on how to deal with employees whose permission to work in the UK has expired.

Mandy Higgins, solicitor at law firm Weightmans, explains:

An employer may be liable to a fine (currently up to £5,000) for employing someone who has not been granted leave to enter or remain in the UK or whose leave is not valid and subsisting, or is subject to conditions precluding them from taking up the employment (section 8(1) of the Asylum and Immigration Act 1996). 

Alternatively, if the employer dismisses the employee and fails to follow the statutory dismissal and disciplinary procedures (SDDPs), they may be vulnerable to a claim for unfair dismissal in the employment tribunal.

How to avoid unfair dismissal

• The employer must show that the employee was dismissed for one of the five potentially fair reasons listed in section 98(2) of the Employment Rights Act 1996 (ERA 1996) or for “some other substantial reason” (section 98(1) ERA 1996). 

• The employer is usually required to follow the SDDPs set out in the Employment Act 2002 (Dispute Resolution) Regulations 2004 to show that the dismissal was fair.

• If an employee’s continued employment would put the employer in breach of a statutory restriction, the SDDPs do not apply.  

Case examples:

• Claims were made for unfair dismissal in the cases of Kelly v University of Southampton and Klusova v London Borough of Hounslow. 

• Dr Kelly, a US national and Ms Klusova, a Russian national, were dismissed because their permits to work in the UK had expired. At the time of dismissal they were in the process of making applications to extend their permits.

• Both employers wrongly believed that continuing to employ the employees would have been a breach of section 8(1) of the Asylum and Immigration Act 1996. This would have constituted a potentially fair reason for dismissing the employees and the employees could be dismissed without recourse to the SDDPs. 

• It was found that the employees were in fact permitted to work in the UK, the Employment Appeal Tribunal (EAT) and Court of Appeal both held that the employers could not rely on that potentially fair reason.

• Both employers had a genuine belief that continuing to employ the employees was unlawful which constituted “some other substantial reason” for the dismissal under section 98(1) ERA 1996 but, as the employers disregarded the SDDPs, the dismissals had been unfair. 

A legitimate disciplinary procedure

While it is understandable that employers will be tempted to take immediate action in relation to a particular employee on discovering that they may be committing a criminal offence, a legitimate disciplinary procedure should be followed. The safest option available to an employer is to follow the SDDPs in all cases.

Managing employees’ immigration status

Employers should consider implementing a system that can be easily maintained to ensure that their employees have permission to work in the UK. This process should start by requiring all prospective employees to produce certain documents (usually a work permit or HM Revenue & Customs document along with some form of identification) before employment commences.  

Cases cited:
Kelly v University of Southampton UKEAT/0295/07
Klusova v London Borough of Hounslow [2007] EWCA Civ 1127

For more information:

Mandy Higgins, solicitor at law firm Weightmans
mandy.higgins@weightmans.com