UK Comment on Proposed European Employer Sanctions

Updated by Gherson and Co on Friday 20 July 2007. | | | |

The Commission of the European Union (EU) has submitted a proposal for European Union legislation (a directive) providing for common sanctions against employers of third country nationals staying illegally in EU Member States. The UK Home Office has prepared an Explanatory Memorandum on the proposal, signed by the Minister of State for Nationality, Citizenship and Immigration in the UK Home Office, Liam Byrne MP.

The Memorandum says that the UK government:

‘supports the general purpose of the draft Directive, which is that Member States introduce, coordinate and enforce similar measures on the prevention of illegal migrant working.’

The UK is not obliged to sign up to the new European legislation if and when it comes into force but has the option of opting in to the new legislation if it wishes to do so.  At this early stage, the Explanatory Memorandum gives no indication of whether it will exercise its power to ‘opt-in’.

Legislation, the Immigration, Asylum and Nationality Act 2006, was passed in the UK in 2006 to create a new regime for sanctions on employers who employ people who do not have permission to work in the UK. This legislation is not yet in force, but work to prepare for implementation is ongoing. The Home Office is currently consulting on the proposals. The closing date for responses to the consultation is 7 August 2007. The UK government states in the Explanatory Memorandum that it intends to introduce statutory instruments to bring the new measures into force in autumn 2007.

The UK legislation deals with people who are working without permission, regardless of whether they are lawfully in the UK. For example, if a student has permission to work for 20 hours a week during term time and an employer employs the student for 30 hours  a week, the employer will breach of the existing and new UK legislation. The European proposals are somewhat different. Because of the way in which the European Law framework it set up, they deal only with people illegally staying in a Member State, not with everyone working without permission. This is cumbersome and awkward.

The current UK legislation and the UK new legislation make provision for employers to perform checks on permission to work in the UK prior to recruitment. The new legislation will oblige employers to make repeat checks during the course of the employment. The draft European Union Directive proposes that employers would have to perform checks on third country nationals prior to recruitment.

The Explanatory Memorandum sets out the UK government’s view that it already complies, or ‘is potentially compliant’, with the majority of the European Commission’s proposals for the new Directive. It goes on to state that the proposals go beyond policy on people working without permission. The proposals also address taxation, social security, employment law and the provision of services to employers and employees. 

The UK government identifies its difficulties with the proposals as:

•    The proposals may be expensive for small business and private individuals acting as employers (for example of cleaners or nannies);

•    The proposed requirement to notify the authorities of the start and leaving date of new workers may be a significant administrative burden, unless notification is achieved by existing methods, such as the P45 form issued when an employee leaves a job, national insurance numbers, payment of tax and insurance and the new proposed Biometric Identify Documents;

•    Powers to recoup public funding received by employers who are found to have employed people without permission to work may be difficult to administer;

•    While UK legislation is restricted to contracts of employment the European proposals go wider, including making those who use sub-contractors responsible for breaches by those sub-contractors. The UK government expresses concern that this could introduce complexity and have an effect on commercial relationships.

The UK Home Office express concern at the proposal in the draft Directive that employers be required to pay money owing to foreign nationals they have employed illegally. In the UK, an employee may have difficulties enforcing payment under a contract where they were working without permission, although this is not impossible, for example in cases where the employee was not aware, and it was reasonable for the employee not to be aware, that s/he did not have permission to work. The proposal in the draft Directive is designed to ensure that unscrupulous employers do not exploit migrant workers by employing people without permission to work then sacking them before they have been paid. In some cases, the penalty fine to be paid by the employer could be lower than the sum of money owed to the employee.

The Explanatory Memorandum does not address this risk of exploitation. It says  that ‘These Articles present real questions here about providing illegal migrants with protection under UK law’, and also records concern about the administrative burden that would be imposed on government departments. It is difficult to square these comments with the Home Office and Scottish Executive’s UK Action Plan on Tackling Human Trafficking, which sets out how the government will work to protect migrant workers from the worst forms of exploitation. The Explanatory Memorandum does not express a view on the proposal that foreign nationals should be able to register complaints against exploitative working conditions or on the proposal that member States would be required to put in place controls on the basis of a risk assessment.

Like many other governments in the European Union, the UK is concerned at the proposal to introduce a new criminal offence (for employers who break the proposed laws on employing people without permission to work) through a European Union Directive. This is a debate about the powers under European Union law to introduce criminal sanctions in Directives. It is a debate that has previously arisen in the context of European Union legislation on the environment.
 
The overall impression given by the Explanatory Memorandum is that the UK is interested in seeing the measures it already has in place mirrored at European level, but feels that the UK has already done or is doing the necessary work to identifying the measures it needs to prevent unlawful working.   The Explanatory Memorandum does not evince great enthusiasm for introducing new or different measures as a result of a European Union Directive. 

European Union Directives can take a very long time to be agreed and often change radically during that time.  Once there is a Directive, the UK will need to decide whether or not to ‘opt-in’.  For the time being, UK employers are likely to be preoccupied with changes to UK domestic law rather than those at European level.

Alison Harvey, Gherson and Co.