On the spot
Date: 04 June 2009
Authors: Mark Tempest
Issue: Vol 159, Issue 7372
Categories: Features, Employment, Immigration & asylum, Judicial review
The civil penalty regime introduced by the Immigration, Asylum and Nationality Act 2006 (IANA 2006) celebrated its first birthday on 1 March 2009. IANA 2006 allows the UK Border Agency (UKBA) to issue penalty notices against employers who employ a person in breach of immigration law. Employers face a maximum penalty of £10,000 per illegal worker. The total amount of penalties issued is already over £14m.
IANA 2006 sets out a three-stage process. It allows UKBA to impose a penalty, it allows a penalised employer to object to the penalty via an internal review, and it provides for an appeal to the county court. The appeal is the only way of challenging the penalty in law.
Appeals under IANA 2006 are governed by Pt 52 of the Civil Procedure Rules, which is supplemented by a lengthy practice direction. Compliance with the practice direction is mandatory.
Pt 52 discourages appeals from judicial decisions by a combination of limited rights of appeal and a cumbersome front-loaded appeal procedure. Normally, permission to appeal is required and the appeal itself is usually limited to a review of the original decision, focused on whether the lower tribunal made an error, not on what the appeal court would have decided in the same case. The appeal court will not hear oral evidence, nor will it consider material that was not before the lower court, unless it orders otherwise.
But appeals of civil penalties are not appeals of judicial decisions. Many of the procedural hurdles between issuing the penalty and appeal do not apply. In effect, appellants have the right to a full trial of the issues.
This article examines the penalty and the internal review system, considers the effect of Pt 52 as modified for these appeals and looks at how they might be case-managed to ensure that an appellant can present an effective case.
Imposing the penalty
Section 15 of IANA 2006 allows UKBA to serve a penalty notice on an employer who employs someone over 16 who is subject to immigration control and who either has no permission to be in the UK or whose leave to remain is subject to a condition preventing them doing the job the employer has given them. EEA and Swiss nationals are not subject to immigration control, nearly everyone else is.
“Employment” means employment under a contract of service, or an apprenticeship—see IANA 2006, s 25. UKBA's website (http://www.bia.homeoffice.gov.uk/) is unclear as to whether it regards unpaid work as “employment”, but if there is no payment or other consideration going to the worker, presumably there cannot be a contract at all.
The statutory excuse
This strict liability is mitigated by a “due diligence” defence—s 15(3). If the employer can show that he has complied with requirements to check the employee's documentation prescribed by order and a Parliament-approved code of practice, he is excused from paying a penalty. Employers must take “reasonable steps to check the validity” of an employee's documentation. Acceptable documents are specified in the code. Some need only be checked once, but certain time-limited documents must be checked at least annually. An employer who knows the employment is illegal cannot rely on this defence—s 15(4).
Level of penalty
The code contains guidance on the appropriate level of the penalty for each illegal worker employed. Penalties vary from a warning letter to the maximum £10,000, according to the intensity of the checks made on employees, the number of previous visits to the employer by UKBA and the level of co-operation from the employer.
Objection under s 16
When a penalty is imposed, the employer can object on the basis that he is not liable to pay it (presumably because he has not breached s 15) or that he has the statutory excuse that he checked the employee's documents. He can also object to the level of penalty. UKBA has prescribed a form for objecting (available on its website) and has set a time limit for objections of 28 days from the date of the giving of the penalty notice.
The objection procedure provides an optional extra level of review prior to appeal. Clearly it will be cheaper and easier than going straight to court. However, there is a potential drawback, as UKBA can increase the penalty on review following objection and serve a new penalty notice, starting the procedure all over again. Advisers should ensure there are no grounds for increasing the penalty before recommending objection.
Appeal under s 17
An employer may appeal to the county court whether or not he uses the objection procedure. As with objection, the appeal may be on the ground that there is no liability under s 15 to pay the penalty, that the statutory excuse applies, or the penalty is too high.
Permission
Permission is not required. IANA 2006 does not mention permission, and Pt 52 does not impose a general requirement for permission for statutory appeals—Colley v Council for Licensed Conveyancers [2001] EWCA Civ 1137, [2001] 4 All ER 998.
Any appeal must be commenced within 28 days of either the penalty notice or a negative decision following objection. The court cannot use its power under the Civil Procedure Rules to allow an appeal out of time, as the period is specified in IANA 2006, s 17.
Appellants need not confine the grounds of appeal to alleged errors by UKBA in considering the case. Section 17 provides that the appeal hearing will be a rehearing. It also states that the court can look at any material it considers relevant, including material that was not before UKBA.
But how is the re-hearing going to be case-managed? What about evidence, disclosure and the burden of proof? The question of whether an employer is liable to a penalty is likely to be very fact-sensitive. There will usually have been a visit to an employer where evidence is gathered by UKBA officers, where people are interviewed, often via interpreters, and where for one reason or another the question of what they said or what they meant at the time is contentious.
Burden and standard of proof
In the absence of any express words in IANA 2006, the normal rule applies— the burden of proof lies upon the party who substantially asserts the affirmative of the issue—see Robins v National Trust [1927] AC 515, [1927] All ER Rep 73. Here, UKBA is making the affirmative assertion that the employer is in breach of s 15. On an appeal by re-hearing, the same principles apply, so that the burden of proving a breach of s 15 ought still to be on the respondent.
Where the level of penalty is appealed, the court must take into account the code of practice but it is not bound to apply the penalty levels in the code. The court makes its own decision and can consider any evidence relevant to the level of penalty. The burden of proof will be on the party asserting the fact, so that UKBA will have to prove the facts necessary to justify the penalty imposed by the notice and the appellant will have to prove any points he raises to mitigate it.
The words of IANA 2006 make clear that it is for the appellant to “show” the statutory excuse. The imposition of a penalty is not a criminal charge, so that Art 6 European Court of Human Rights objections to this reverse burden are not applicable. The reverse burden will be a legal burden, not merely evidential. The standard of proof in relation to all burdens under IANA 2006 will thus be the balance of probabilities.
What is a “rehearing” anyway?
The right to a “rehearing” does not always equate to a right to a trial. In EI Du Pont De Nemours & Company v ST Dupont [2003] EWCA Civ 1368, [2003] All ER (D) 185 (Oct) the Court of Appeal held that the word has a range of meanings, so that at the lesser end of the range it merges with that of “review”. But in the case of an appeal from the decision of a minister who did not hold a hearing, there ought to be a rehearing “in the fullest sense of the word”. On such a rehearing the court will hear the case again. It will if necessary hear evidence and may admit fresh evidence. It will reach a fresh decision unconstrained by the initial decision, although it will give to that decision the weight that it deserves. Part of the court's rationale for this approach was that such appeals are a first judicial hearing, and a full hearing may be necessary to comply with ECHR, Art 6.
Case management
Case management directions should make provision for exchange of witness statements and attendance of witnesses for cross-examination where necessary. But what about disclosure of documents?
A court has power to order disclosure in “proceedings”, which includes appeals, so the court can order the parties to disclose all relevant documents—relevant in the sense that they support or adversely affects the case of a party. Such documents may include contemporaneous notes and interpreter records made by UKBA that might assist an appellant, but may also include material in the appellant's control that may tend to expose him to a penalty under IANA 2006.
Disclosure is made by stating whether or not a document exists and usually by stating the extent of searches made for relevant documents. The appellant's privilege against self-incrimination means that he does not have to admit the existence of documents where the admission would give rise to the risk of a penalty.
The privilege against self-incrimination gives the right to refuse to answer questions about, or provide, documents. So if UKBA has obtained incriminating documents independently of the disclosure process, privilege does not arise, and the documents are admissible—C v P PLC [2007] EWCA Civ 493, [2007] 3 All ER 1034.
Whatever the legislation calls these hearings, they are a lot closer to trials than appeals. The issues are likely to be factual, and the focus for appellants must be on building a good case on the facts. UKBA seem to be prone to settling (and often conceding) these appeals anyway so, it should pay appellants to put forward a strong case well-supported by evidence right at the start. As ever in civil litigation, early resolution may be better than the prospect of eventual victory.
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