Earlier in August, our client successfully appealed a civil penalty, resulting in the cancellation of a £40,000 fine issued for allegedly employing an illegal migrant. The case turned on the fact that the individual in question was not an employee of our client. Given the complex nature of the proceedings, and the fact that this decision is unreported, we consider it useful to share an outline of the matter and its outcome.
Case Background
Our client, a small restaurant business established in 2024, was served in January 2025 with a Civil Penalty Notice under section 15 of the Immigration, Asylum and Nationality Act 2006. The penalty, initially set at £45,000 (later reduced to £40,000 for co-operation), related to allegations that the company unlawfully employed an individual as a waiter for three and a half days.
The Secretary of State argued that the company had failed to conduct a right-to-work check, and that the individual was engaged under a contract of service, thereby falling within the statutory definition of “employment.”
The company objected, maintaining that no employment relationship existed. When the Secretary of State rejected the objection, we were instructed to pursue an appeal.
The Appeal
At the court hearing, the Secretary of State relied primarily on the interview record of the alleged illegal worker, as well as email correspondence from the company owner (translated using software, as their first language was not English). The Secretary of State’s case rested on the contention that the individual had worked as a waiter with the expectation of payment.
Our case highlighted the following points:
- No mutuality of obligations: Any job offer was conditional on the individual producing evidence of a lawful right to work, meaning no contract of service existed;
- Credibility of witnesses: The company owner gave consistent evidence, supported in part by a resident witness. By contrast, the alleged worker’s account was inconsistent and self-serving;
- Risk to the business and owner: Employing unlawfully would have jeopardised not only the business but also the owner’s immigration status and future citizenship prospects, making it implausible they would knowingly employ someone illegally;
- Practical improbabilities: It was inherently unlikely that the owner would call the police to report the alleged worker if they had in fact been employing them unlawfully;
- Good character of the owner: The owner acted with caution and had much to lose by dishonesty.
Decision
The judge allowed the appeal, finding that:
- No immigration officer had witnessed the alleged worker carrying out any employment duties;
- The Secretary of State’s evidence relied almost entirely on the alleged worker’s inconsistent and unsupported statements;
- The company owner’s evidence, though occasionally unclear, was on the whole credible and careful;
- It was “contrary to any common sense” to conclude that the owner would have reported the alleged worker to police had they knowingly employed them unlawfully.
The judge concluded that the Secretary of State had not satisfied the burden of proof to establish, on the balance of probabilities, that the alleged worker was employed by the company. Accordingly, the civil penalty was cancelled, and the Secretary of State was ordered to pay the company approximately £9,500.
Conclusion
This case illustrates that not every civil penalty notice is sustainable and that the burden of proof rests firmly on the Secretary of State. Importantly, this was a highly unusual case in which:
- No immigration officer witnessed the alleged worker performing any work, or even being present at the premises; and
- The Secretary of State relied solely on the unsupported account of the alleged worker.
This is a rare factual scenario. In many other civil penalty cases, immigration officers personally observe individuals carrying out work at the premises, which significantly strengthens the Secretary of State’s position and makes appeals far harder to win.
Therefore, we strongly caution businesses receiving civil penalty notices to take them seriously and seek urgent legal advice. While this case was successful, it turned on very specific facts. Employers must remain vigilant in conducting robust right-to-work checks to protect against the risk of substantial fines and reputational harm.
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