The Insolvency Service (an executive agency of the Department for Business and Trade) has recently issued both a five-year ban to a Lincolnshire car wash owner and a seven-year ban to a former takeaway manager for employing individuals with no right to work.
The Insolvency Service is a well-known faction of the Department for Business and Trade which aims to confront “financial wrongdoing”, as well as provide further economic and financial services for UK based companies.
2024 saw a number of changes to immigration law and policy, which included an increase of compliance action and the number of civil penalties issued. In February 2024, illegal working penalties tripled in the UK, from £15,000-£20,000 to £45,000-£60,000. We also saw a number of key examples of severe punishment for repeat offences of employing individuals with no right to work.
Consequences of employing individuals with no right to work
Mr Mohamed Hamza was the sole director of M&H Car Wash Ltd in Lincolnshire. The company was established in 2019 and was visited by Immigration Enforcement officers in January 2022. Two men who had no right to work were discovered by the Immigration Enforcement officers at the premises. The company was fined £20,000 for the immigration breach. However, Mr Hamza’s company entered into liquidation in August 2022 with “liabilities of more than £44,000”, and the fine remained unpaid.
The Chief Investigator at the Insolvency Service (Mr Kevin Read) stated the following:
“Mohamed Hamza hired two people who did not have the right to work in the UK, contravening the Immigration, Asylum and Nationality Act 2006. This represents a serious breach of legislation and of the standards expected of company directors. Hamza’s directorship ban means he cannot now be involved in the promotion, formation or management of a company in the UK until January 2030.”
Mr Hamza was subsequently issued with a five-year ban on 13 January 2025, and this will last until January 2030.
Similarly, February 2025 saw another ban issued to the former manager of a Chinese takeaway, Mr Qiqing He. He was the sole director of QQ Holburn Limited. The Chinese takeaway restaurant, ‘Chinese Cooking’ in Aberdeen, operated under this company and Mr He was also the manager of the takeaway. Immigration Enforcement officers visited the premises in September 2022. Even though Mr He had resigned as the company director by the time of the visit, he was still responsible for the management of the takeaway business. Three individuals in their 50s and 60s who had no right to work were discovered by the officers.
The company was fined £20,000 for the immigration breach, which is still outstanding. Mr He was issued with a seven-year ban on 04 February 2025, and this will last until February 2032.
Director of Investigation and Enforcement Services at the Insolvency Service (Mr Dave Magrath) stated the following:
“Company directors have a responsibility to follow all the rules and regulations expected of them. Qiqing He clearly failed to do this, employing three people who had no right to work in the UK. Illegal working puts some of the most vulnerable people in society at risk of exploitation, undercuts honest employers who pay their taxes, and encourages others to break our immigration laws. Improving director conduct is a key priority for the Insolvency Service and we will continue to work with our partners at the Home Office to clamp down on those who do not meet the standards we expect.”
Main takeaways
The Secretary of State for Business and Trade accepted disqualification undertakings from both Mr Hamza and Mr He. These disqualifications mean that both individuals will no longer be permitted to form a company in the UK or be involved in the management or promotion of a company without seeking permission from the courts (for the duration of their respective five-year and seven-year bans).
Both Mr Hamza and Mr He will now be subject to a series of restrictions and consequences, as well as their respective bans. This should serve as a cautionary tale to any employers who wish to take a more lax approach in conducting right to work checks for their employees.
If employers ensure that they conduct a valid right to work check, this could assist in providing them with a statutory excuse; which could, in turn, help them to avoid a civil penalty. The Prevention of Illegal Working Legislation was put in place to protect employees, and this is taken extremely seriously by both the Home Office and the Insolvency Service.
How our Immigration Solicitors can help
Our immigration experts are able to provide advice and guidance in relation to an employer’s duties under the right to work legislation to ensure that they are complying with their duties and are able to establish a statutory excuse when necessary.
If you require legal assistance in the management of your sponsor licence, conducting right to work checks, or objecting to a civil penalty, please contact us or complete our enquiry form below.
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