Right-to-work regime

The Home Office has issued new right-to-work guidance as the Brexit transitional arrangements for EU workers in the UK came to an end on 30 June 2021.

Under the new rules, from 1 July 2021, EU nationals (except for Irish citizens) must hold valid permission to work in the UK, either in the form of EU settled or pre-settled status or a UK work visa. The changes will bring new levels of bureaucracy, cost and timescales for UK employers hiring EEA nationals.

UK right-to-work regime

The legislation on illegal working is found in sections 15 to 25 of the Immigration, Asylum and Nationality Act 2006, section 24B of the Immigration Act 1971, and Schedule 6 of the Immigration Act 2016.

UK employers have a duty to check the immigration and working status of all workers before they begin employment.

Employers must perform right-to-work document checks in accordance with the latest Home Office guidance to verify each individual’s eligibility to do the job they are being recruited for.

Failure to meet this duty can result in enforcement action against the employer under section 15 of the 2006 Act, including fines of up to £20,000 per illegal worker under the civil penalty scheme, and directors could face criminal sanctions if they are shown to have had a reasonable belief that an individual did not have the right to work.

For the Home Office, the illegal working regime is the quid pro quo for employers accessing the international talent market.

It is hard to question the spirit of the legislation, insofar as illegal working is shown to result in exploitation of vulnerable people, poor working conditions, illegal migration, tax evasion and lower overall wage levels across the economy.

But relying on employers to act as plain-clothes immigration enforcement is onerous and problematic, particularly where there are substantial and frequent changes in the rules that must be accounted for by employers operationally to avoid unwanted enforcement action.

While levels of civil penalties have declined dramatically since the Windrush Scandal, when systemic issues around proving immigration status were exposed within the Home Office, employers and their legal advisers should remember that illegal working fines remain an attractive income stream for the Home Office, and are best avoided by ensuring compliance.

Right-to-work changes from 1 July 2021

The latest version of the Home Office’s right-to-work guidance details how employers should perform compliant pre-employment checks, and in some cases follow-up checks, in order to be able to rely on a statutory excuse against any allegations of illegal working.

The latest guidance is 53 pages long. It requires advisers and employers to cross-refer to additional codes of practice and to previous iterations of the guidance where employment commenced on or after 16 May 2014 (29 June 2018 guidance) or on or after 29 February 2008 (October 2003 guidance).

Further guidance was also issued in light of the new points-based immigration system in December 2020 on how to avoid unlawful discrimination, along with details of the Covid-19 temporary adjusted right-to-work checking process.

Under the most recent version, changes in the list of acceptable documents mean EEA citizens and their family members starting employment from 1 July 2021 can no longer rely on an EEA passport or national identity card to prove their right to work. The change does not apply retrospectively to those employed before 30 June 2021.

In practice, the changes may become problematic where an individual no longer has the right to work because they have not secured EU settled status (EUSS) or a work visa. Figures show 400,000 EUSS applications are outstanding and it has been widely reported that hundreds of thousands of affected people may be unaware of the new rules and fall out of status.

As a temporary concession, the Home Office granted a 28-day grace period for eligible individuals who missed the deadline of 30 June 2021 to make an EUSS application, but concerns remain that a significant cohort will find themselves out of status even after this grace period.

If an employer discovers through a document check that an individual no longer has the right to work, the new guidance raises potential discrepancies with existing legislation, for example where the individual fails to apply for EUSS or their EUSS application is refused. Here, the employer will have to decide whether to dismiss the individual on the grounds of losing the right to work, which risks unfair dismissal claims, or face Home Office penalties for illegal working.

Complications may also follow where the individual no longer has the right to work, but is awaiting a decision on their EUSS application, per schedule 4 of the Immigration (Citizens’ Rights Appeals) (EU exit) Regulations 2020 which amend section 3C Immigration Act 1971.

The EU Exit Regulations and the Immigration Act 1971 confirm that ‘section 3C leave’ is extended while an appeal could be brought or is pending under the EUSS, without explicitly stating that applying under the EUSS extends section 3C leave. However, it may be plausible to argue that as EUSS applications are valid applications for limited leave to enter or remain, this implies that 3C leave is also extended while the EUSS application is still under consideration.

Further, the new guidance does not appear to distinguish between EEA nationals who are eligible for EUSS but who apply late, as is their right, and those who potentially abuse the system by applying for EUSS despite not being eligible.

Document checks for the new normal

In addition to changes to EU worker status, the right-to-work regime is set for further change from 1 September 2021 as the temporary Covid right-to-work scheme closes.

The Home Office introduced this scheme in March 2020 to allow employers to conduct virtual document checks by verifying electronic copies of acceptable documents via live video links with individuals.

The scheme was initially set to close on 16 May 2021, but following outcry from employers and industry groups over the unrealistic time frames to reinstate physical, face-to-face checks while lockdown restrictions were still in place, the closure has been delayed twice and is now set to end on 31 August 2021.

The Home Office’s Employer Checking Service (ECS) continues to be available to employers to verify an individual’s right to work online, but only in limited circumstances and where the individual gives their permission.

With long-term adoption of hybrid and remote working arrangements across the economy, it seems logical to consider how the right-to-work regime can be better adapted on a permanent, digital basis to expedite checks and support employers in conducting compliant checks. For example, extending existing online checks to a broader range of workers or by making virtual document checks an indefinite feature of the regime, rather than reverting arbitrarily back to the face-to-face requirement.

While legal advisers, employers and HR teams may be used to the changing nature of the right-to-work regime, now seems an opportune time for the Home Office to consider changing the regime to a more pragmatic and less onerous system for all parties.

Anne Morris is an immigration lawyer and founder at DavidsonMorris