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England and Wales: Restaurant Owners Disqualified from Running a Business After Employing Illegal Workers

(Mar. 8, 2017) Two directors of a restaurant in England were recently fined £100,000 (about US$125,000) for employing five individuals who were not legally entitled to work in the United Kingdom.  It is a criminal offense under section 15 of the Immigration, Asylum and Nationality Act 2006 to employ a person who is not able to lawfully work in the UK;  the offense is punishable upon conviction with a penalty of up to £20,000 (about US$25,000) per worker employed.  (Immigration, Asylum and Nationality Act 2006, c. 13, LEGISLATION.GOV.UK; Company Directors Disqualification Act 1986, c. 46, LEGISLATION.GOV.UK; Press Release, The Insolvency Service, Directors of a Kingston Restaurant Disqualified for Six Years for Employing Illegal Workers (Feb. 10, 2017).)  The company went into liquidation owing £76,853 (about US$95,500) to creditors, £30,000 (about US$37,000) of which was the outstanding penalty imposed by the Home Office’s Immigration and Enforcement for the illegal employment of undocumented workers.  (Directors of a Kingston Restaurant Disqualified for Six Years for Employing Illegal Workers, supra.)

Home Office Immigration Enforcement, an executive agency, was established in April 2012 to prevent abuse, track immigration offenders, and increase compliance with immigration law, according to its website.  (About Us, GOV.UK (last visited Feb. 23, 2017).)  The Insolvency Service, another executive agency, has recently begun to work closely with Immigration Enforcement and take action both against insolvent companies and companies that remain active and are not subject to insolvency proceedings but that have not complied with the statutory obligations under the Immigration, Asylum and Nationality Act to ensure that all employees are lawfully able to work in the UK.  In cases where the Insolvency Service finds these obligations have not been met, disqualification orders have been used against the directors of the companies.  (Company Director Disqualification, GOV.UK (last visited Feb. 22, 2017).)

The imposition of a disqualification order means that the person served with the order cannot act as the director of a company, be a receiver of company property, or take part in any way in the promotion, formation or management of a company or limited liability partnership.  (Id.)  In the restaurant’s case, the Insolvency Service issued a disqualification order that is valid for six years.  (Directors of a Kingston Restaurant Disqualified for Six Years for Employing Illegal Workers, supra.)

The work of the Insolvency Service has resulted in the directors of a number of companies being disqualified.  A statement from the Insolvency Service notes:

Employing illegal workers is not a victimless crime.  These directors sought an unfair advantage over their competitors by employing people under the radar who were not entitled to work legally in the UK.

If a company is found to be employing illegal workers and not carrying out the checks they are required to by law, then the Insolvency Service will take action to remove the directors from the market place, regardless of whether the company is in Liquidation or not.

This action is a warning to other employers to seriously consider their duties and obligations.  (Press Release, The Insolvency Service, Warning on Employing Illegal Workers as Directors of 11 Companies Are Disqualified (Dec. 26, 2016).)