Dismissing employees who no longer have the right to work

29 Mar 2022

Employer’s question: can an employer dismiss without notice an employee who no longer has the right to work, or should they be paid in lieu of notice? 

An employee’s right to work status may change, particularly if they have limited leave to remain in the UK. For example, if their visa expires or the relationship upon which the visa depends breaks down, they may lose the right to work.  An employer who has reasonable cause to believe that an employee no longer has the right to work risks a civil penalty up to £20,000 per worker and criminal prosecution, which could lead to an unlimited fine and/or imprisonment. Employers who are sponsors of migrant workers also risk the downgrade or removal of their sponsor licence and the curtailment of the leave to work in the UK of all sponsored staff. In these circumstances, it is often in the employer’s best interests to terminate the relevant employment(s) promptly in order to avoid or limit such liability. Suspension of the employee with or without pay will not mitigate the risk of civil penalty or prosecution as the individual will still be regarded as employed by the employer.

Employers often dismiss an employee on the grounds of illegality as a potentially fair reason for dismissal. If it has become illegal, the contract is void and unenforceable, meaning that no notice is required to terminate it. However, two issues arise of which employers need to be aware. First, it is possible that the employer’s genuine belief in the illegality of the contract may be wrong. There have been cases where right to work checks indicate that a worker has no right to work, but it later turns out that this was incorrect. In such cases, the employer will have relied on a potentially fair reason to dismiss (illegality) that in fact did not exist. It is important, therefore, to consider whether to seek to justify the dismissal as being for ‘some other substantial reason’ (“SOSR”). For example, that it had reasonable grounds to believe that the employee did not have the right to work in the UK.

Further, the act of terminating immediately without notice or a fair procedure could risk a claim for unfair dismissal if a tribunal considers that such action was not within the range of reasonable responses that an employer might have chosen in the circumstances. If the employee’s visa is later re-instated by the Home Office or the immigration tribunal, this might increase the risk of such a finding. 

Ideally, the contract of employment should have a clause that provides that the employee’s contract can be terminated immediately and without notice if they are unable to demonstrate their right to work in the UK. If no such clause exists, or if there is any doubt as to whether the worker has actually become illegal, an employer should carefully consider whether it would be better to pay in lieu of notice, and thus avoid the risk of a successful wrongful dismissal claim. 

Irrespective of the reason for dismissal, in most instances the employer will want to give a right of appeal, as the employee may subsequently be able to prove that they have the right to work. Employers should also ensure that they carried out as much of an investigation into the employee’s immigration status as is reasonable in the circumstances, to help to demonstrate that a fair procedure has been followed.

If you have an enquiry or would like to discuss the issues raised in the above Q&A further, please get in touch with your usual employment contact at DMH Stallard or with Aisling Malone by email or by phone on 01483 467427.

Changes to Home Office right to work guidance come into force from 6 April 2022. Contact the Immigration Team if you are an employer and would like us to provide in-house training on the draft new guidance already published, so that you are ready for when the changes are implemented. 

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