KNOWLEDGE

Right to work and sub-contracting

MortonFraser_Stuart McWilliams
Author
Stuart McWilliams
Partner
PUBLISHED:
16 April 2021
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category:
Article

I've spent the start of 2021 helping clients understand the implications of the new immigration system. In the construction sector this has involved considering the position of sub-contractors who rely on labour from Europe. Until the end of last year this was a simple process, as free movement allowed sub-contractors to bring workers from Europe without considering visa issues.

However, under the new immigration system, the position is much more complicated as sub-contractors will need to consider:

1. whether the workers they intend to use were in the UK before the end of December 2020, and therefore eligible for Pre Settled Status or if they will need a visa;

2. if they do need a visa to work in the UK, does the sub-contractor hold a Sponsor Licence to allow them to support that application; and

3. will the relevant roles qualify for work visas (this means the Home Office consider the job to require a level of skill equivalent to an A-level or Scottish Higher qualification and a minimum salary based on UK averages must be paid)?

If the sub-contractor makes a mistake when assessing which type of visa is needed, they could find themselves employing someone without the right to work and this can lead to fines of up to £20,000 per illegal worker.

Although this assessment is something for a sub-contractor to be concerned about it, it does not mean the main contractor can simply ignore visa considerations. One of the questions which has arisen during my calls with clients is whether or not a company can be liable for breaches of immigration law by a sub-contractor, and unfortunately the answer is not straightforward.

Penalties for illegal working

The Home Office have produced guidance for employers on how to carry out right to work checks. This confirms that businesses are only liable for illegal working if the individual is employed directly by them, but "even if you are not the direct employer of the workers involved in your business, there are compelling reasons why you should seek to know that your workers have a right to work."

The reason it is important to make sure all workers on a site have the right to work include:

  • The Home Office can look beyond contractual arrangements, and argue that there is an implied employment relationship between the company and the worker, even if there is no direct contractual relationship. This can lead to the company being fined;
  • There can be insurance implications if workers do not have the right to work in the UK;
  • If an individual is working illegally they can be removed from the site without notice; and
  • The Immigration Act 2016 gives the Home Office the power to close down a site for 48 hours if they believe illegal working is taking place there. If a sub-contractor is found to have employed someone without the right to work, the Home Office could close the whole site until they verify there are no other issues. The Home Office can also ask the Sheriff Court to extend the closure notice if they still have concerns after 48 hours.

All of this demonstrates the importance of taking steps to ensure that any sub-contractors comply with immigration legislation, but what does that involve?

What can be done to reduce risk?

The best way to reduce the risk when using sub-contractors is to make sure your contract contains language regarding right to work, for example:

  • Many contracts require the sub-contractor to confirm that all employees have the right to work, but it is possible to insert language requiring the sub-contractor to hold records of employees' right to work. This removes the possibility of a sub-contractor assuming someone has the right to work, which is one of the most common causes of illegal working issues.
  • It is also possible to insert a clause allowing a company to request copies of the right to work documents for any sub-contractors to be used on a site. This can be helpful if the Home Office carry out a spot inspection to check right to work, as it means all records can be kept on site. The construction industry was targeted by the Home Office when they sought to reduce illegal working in 2015, and it is common for construction sites to receive unannounced visits by Home Office officials.

Whatever action is taken, it is important to take it soon. Until 30 June 2021, employers can still accept EU passports or ID cards as proof of right to work but from 1 July 2021 onwards right to work checks will apply to EU nationals, until then businesses should not ask for evidence beyond an EU passport or ID card. This grace period allows time to ensure contracts and procedures are in place to reduce the risk of issues when right to work checks are introduced.   

If you have questions about right to work procedures, and how to ensure that any employees, workers or sub-contractors have the correct paperwork please get in touch.

 

Disclaimer

The content of this webpage is for information only and is not intended to be construed as legal advice and should not be treated as a substitute for specific advice. Morton Fraser LLP accepts no responsibility for the content of any third party website to which this webpage refers.  Morton Fraser LLP is authorised and regulated by the Financial Conduct Authority.