EMPLOYMENT OF ILLEGAL WORKERS RESULTS IN DIRECTOR DISQUALIFICATION

This is the next in the series of my blog for the Director’s Friend.

BACKGROUND

In a recent press release the Insolvency Service (‘IS’) show that they are targeting insolvent companies that have been employing illegal workers and where the fines levied by the Home Office were not paid. According to the press release 11 directors from separate companies were disqualified for employing a total of 39 illegal workers across various geographic locations in England.

Following visits from Home Office Immigration officers, during which the illegal worker breaches were discovered, the companies were issued with penalty notices ranging from £10,000 to £15,000 per worker, which remain unpaid. Across the companies talked about in the press release these unpaid fines totaled £450,000.

All 11 of the directors were directors of the companies and were in office at the time of the Home Office visit.

THE INSOLVENCY SERVICE COMMENTS

Cheryl Lambert, the Chief Investigator at the IS is quoted to have said:

‘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.’

FURTHER WARNING

A further warning is contained in the press release in circumstances where the company is still active and not subject to insolvency proceedings where the Insolvency Service and the Home Office are working very closely together.

THE WIDER PICTURE

 An employer can be sent to jail for 5 years and pay an unlimited fine if they’re found guilty of employing someone whom they knew or had ‘reasonable cause to believe’ didn’t have the right to work in the UK. If that is a director of a company, then they could also be disqualified from being a company director in any event by the criminal court.

In addition, a civil penalty could be levied in the sum of £20,000 for each illegal worker employed.

So, employing someone who does not have the legal right to work in the UK could be very expensive, result in a prosecution and a director disqualification. In addition, a confiscation order could follow!

COMMENT

These kind of civil director disqualifications seem in my experience to be on the increase where the theme is that the company employs illegal workers, is caught by the Home Office and fined. The fine is not paid and the company is placed into formal insolvency. It would appear that it is as a consequence of the Home Office and the Insolvency Service working together to target these cases.

WHAT TO DO NOW?

If you are faced with a claim for director disqualification by the IS please talk to me today. That is in order to protect your position without delay. The earlier that you speak with me as a specialist director disqualification defence solicitor the more that I can help. Why not call me today on 01992 558 411 and speak to me without obligation, pressure or cost. I am a game keeper turned poacher.

If you are happy to instruct me my firm and I are happy to talk to you about fixed fees or staged fees that are agreed with you in advance of any work being carried out or we can liaise with your insurers. Your work will be carried out by me or others under my close supervision. I am happy to come to you to take instructions. My firm is based in London and Hertfordshire, here in the UK.

YOUR ADVISER

Finally, is you adviser a practising solicitor (and thus insured to advise you – check with the SRA) and if so is your solicitor a full member of the Insolvency Lawyers Association (‘ILA’) (ask them). Membership of the ILA is a public mark from insolvency peers that your representative has the requisite knowledge, skill and experience to advise you. I am both. Accept no substitutes.

Until the next time…

THE DIRECTORS FRIEND

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