A civil penalty for illegal working can expose an employer to a fine of up to £60,000 per illegal worker. Although effective Right to Work checks are the first line of defence, employers must also be aware of how to respond if the Home Office issues a penalty. This article outlines the process following a Civil Penalty Notice and sets out the steps employers can take to challenge such notices.

Identifying a breach: What steps will the Home Office take?

The Home Office draws on a range of information sources to identify potential illegal working, including information shared by other government departments, intelligence gathered through operational enforcement visits, and tip-offs.

If the Home Office suspects illegal working, it will usually first issue an Information Request to the employer, requesting further information or evidence of a statutory excuse.

Upon receipt of the business’ response, the Home Office will then either:

• Issue a Civil Penalty Notice (CPN) setting out why the Home Office considers the employer to be liable for a civil penalty and the value of that penalty;

• Issue a Warning Notice setting out why a CPN will not be issued on this occasion and confirming that the Warning Notice will be taken into account if the employer breaches the Right to Work regime again within the following three years; or

• Issue a No Action Notice to confirm no further action will be taken. This notice will not be taken into account in the future.

  
  

What happens once a CPN has been issued?

As detailed above, a CPN will set out to an employer the details and value of the civil penalty being issued, along with the appropriate methods of payment.

Where an employer is in receipt of their first CPN, they will have the option to benefit from the Faster Payment Option (FPO) to reduce the amount of the civil penalty by 30%. To benefit from the FPO, payment of the full civil penalty must be made in full within 21 days.

Where an employer receives a further civil penalty within 3 years of a previous CPN, no discount under the FPO will be available but it may instead be possible to request the penalty is paid by instalments over an agreed period, rather than as a single lumpsum. This could assist employers who are unable to pay the full penalty immediately, although any instalment arrangement will need to be agreed with the Home Office and complied with in accordance with the agreed payment schedule.

In either case, where an employer is not satisfied that the penalty is due, they may object to the CPN directly to the Home Office.

How to object to a civil penalty

An employer may submit a written objection against a CPN to the Home Office within 28 days of the date of the notice on any of the following grounds:

• The employer is not liable: for example because the individual had permission to carry out the work in question;

• The employer had a statutory excuse: a prescribed right to work check was carried out and the employer retained the required evidence; or

• The penalty is too high: for example where the Home Office has applied the wrong calculation or failed to take relevant mitigating factors into account.

  
  

A strong objection should address each of the Home Office’s allegations in turn and provide all relevant evidence. This might include evidence of right to work checks, identity documents and employment records. The notice should be reviewed carefully so that the correct procedure is followed and all available grounds are raised within the deadline.

Within 28 days of receiving the objection, the Home Office will then send an Objection Outcome Notice (OON) to the employer setting out whether the penalty is to be cancelled, reduced, or maintained.

How to appeal an Objection Outcome Notice

If an OON confirms the employer is still liable to pay a civil penalty, or where there is no response from the Home Office within the deadline, the employer can appeal the civil penalty to the courts within 28 days.

It is important to note that an employer may only appeal an OON on grounds that were raised as part of its original objection. Employers should therefore ensure that all relevant grounds are clearly identified at the objection stage to preserve the ability to rely on these in any subsequent appeal.

On determining an appeal, the court may cancel the civil penalty, reduce the amount payable, or dismiss the appeal, in which case the full penalty will remain in place. It is therefore important to obtain legal advice at the earliest opportunity to allow for the preparation of a comprehensive objection and, where necessary, subsequent appeal.

The immigration team at CG can help your business to assess a CPN, identify any statutory excuse or mitigating factors, and prepare a clear, evidence-based objection or appeal. If your organisation has recently received a CPN or is concerned about its current right to work practices, please contact the team (immigration@cgprofessional.co.uk).