Case Law Update - When Immigration & Employment Law Collide

Ben McCarthy

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12 Dec 2019

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The Employment Appeal Tribunal has held that an organisation was wrong to completely depend on a negative right to work check when deciding to withhold work—and pay—from an employee.

If you want a quick summary of the case and the main takeaway points, you can skip ahead to our Too Long; Didn't Read section here.

Badara v Pulse Healthcare Limited

The law

Individuals from overseas must have the legal right to live and work in the UK in order for a business to employ them.

If they’re taken on without this right, the business can be fined up to £20,000 per worker. You might also face criminal charges.

When faced with an accusation of employing illegal workers, employers can use a ‘statutory excuse’ as a defence. To do this, you’ll need to demonstrate that you undertook specific right to work checks. You should have maintained records to prove this.

Certain documents can prove an individual’s right to work, such as a Permanent Residence Card.

However, if this documentation cannot be provided, employers must work to obtain a ‘positive verification notice’ (PVN). You obtain this from the Home Office through the online Employer Checking Service (ECS).

This gets more complicated when the individual is a family member, or spouse, of someone from the European Economic Area (EEA). This includes people from EU countries and also Iceland, Liechtenstein and Norway.

A spouse or family member of an EEA national have the automatic right to live and work in the UK. Therefore, they don’t need to legally obtain documentation to prove this right.

However, this can make it difficult for employers to conduct valid right to work checks.

Background to the case

The claimant was originally from Nigeria and had previously married an EEA national living in the UK.

Before commencing work for the organisation, he provided a valid Residence Card that had an expiry date of 20 January 2015.

Under the terms of his contract, he had to provide the organisation with evidence of his eligibility to work in the UK. He was also obligated to inform them of any changes to his circumstances.

Eventually, his card expired. His employer—believing his right to work had expired—requested that he apply for a new card. He also requested evidence that he’d done this.

Concerned about the prospect of a fine, the organisation submitted a series of ECS requests. They all came back negative. As a result, they stopped providing him work and pay.

The employee did apply for a new card but raised a grievance. He argued that he had an automatic right to work due to his immigration status.

The situation escalated to the employment tribunal (ET). He was finally able to present a new card by 15 October 2015. However, following the dismissal of his claims by the original tribunal, his contract was terminated with immediate effect on 17 November 2015.

As a result, he brought separate claims to a new ET for unlawful deduction from wages and direct and indirect race discrimination.

What did the employment tribunal say?

The tribunal considered each claim in turn.

Unlawful deduction from wages

They held that the employee was entitled to compensation. The compensation was due between the date he provided his new card and his date of termination. This covered a period of just under five weeks.

However, he wasn’t able to receive an additional amount for the time prior to this. This was because he hadn’t provided the information requested to prove his right to work, as outlined in his contract.

Direct discrimination

The tribunal held that there had been unfavourable treatment in withdrawing work. However, the organisation believed it was acting to ensure compliance with immigration law to avoid penalties.

Indirect discrimination

They found that the employee was also not subjected to indirect discrimination. The practice that placed him at a disadvantage—relying on the ECS results when deciding whether to continue offering him work—could be objectively justified.

What did the Employment Appeal Tribunal say?

The employee appealed to the Employment Appeal Tribunal (EAT). The appeal was allowed in relation to unlawful deduction of wages and indirect discrimination. But it wasn’t allowed in relation to direct discrimination.

Unlawful deduction from wages

The EAT referred to the previous case of Okuoimose v City Facilities Management. In this case it was found that an individual who was a family member of an EEA national didn’t need to depend on documents from the Home Office to prove her right to work.

The ruling was applied to this case. So, as the employee had an automatic right to work, it would have been sufficient for him to produce evidence that he was a family member of an EEA national.

The term in the contract requiring proof of the right to work in the UK was only relevant to individuals who enter and leave the UK. They remitted this point back to the tribunal to reconsider their interpretation.

Direct discrimination

The EAT agreed with the reasoning of the tribunal.

Indirect discrimination

The EAT recognised that the organisation was in a difficult position. However, the employee had the automatic right to work in the UK under the provisions of the government guidance.

The tribunal should therefore have applied Okuoimose and this government guidance. They should’ve assessed whether relying purely on the ECS checks was a proportionate means of achieving a legitimate aim. They had failed to do so, so this claim was also remitted for reconsideration.

Takeaway points

When determining if employees have the right to work in the UK, organisations should take care not to completely rely on ECS checks. As seen here, their outcome may not always be correct.

They should also remember that this right may change over time. In this case the employee had actually started divorce proceedings with his wife. Therefore, he would’ve lost his status eventually.

To this end, it’s essential that organisations are familiar with all expectations placed upon them when dealing with this situation. And, be aware of the dangers of discrimination.

TL;DR

An employee from Nigeria was married to an EEA national living in the UK but was going through a divorce. In the terms of his contract he had to provide evidence of his eligibility to work in the UK. Eventually, his residence card expired. His employer requested he apply for a new one and provide evidence he’d done this. They then submitted ECS requests, which came back negative. So, they stopped providing him work and pay. Eventually, he did provide a new card but was dismissed anyway.

The employee took his employer to tribunal. There were a three separate claims to be made:

  • Unlawful deduction from wages
  • Direct discrimination
  • Indirect discrimination

The tribunal ruled the employee was entitled to compensation, but only for the time between providing his new card and termination. They found that there was unfavourable treatment towards the employee, but no discrimination, direct or indirect.

The EAT remitted the first claim back to the tribunal for reconsideration. They agreed there had been no direct discrimination. They didn’t agree there had been no indirect discrimination. They remitted the claim back to tribunal for consideration.

The takeaway? Don’t rely entirely on ECS when determining if an employee is eligible to work in the UK. And, be wary of the dangers of discrimination, particularly when it’s indirect.

Expert support

Worried how this latest ruling might impact your business? Dealing with a difficult HR situation and not sure where to turn? Speak to a Croner expert today for support and guidance on 01455 858 132.

About the Author

Ben McCarthy works as a content writer for Croner producing commentary and guidance on employment law and key HR developments. Coming from an extensive legal background, Ben regularly constructs key training materials for clients and advisers, and provides daily contributions to national publications.

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