Employers should take care when relying on the employers' checking service

Employers should take care when relying on the employers' checking service

Employers should take care when relying on the employers checking service

In the recent case of Badara v Pulse Healthcare, the Employment Appeal Tribunal held that the employer was wrong to rely on a negative verification notice following a right to work check using the Home Office’s Employer Checking Service when withholding work and pay from the claimant. As a result, Mr Badara’s claims for unlawful deduction from wages and indirect race discrimination were remitted to the employment tribunal.

 

Facts

Mr Badara was a Nigerian national employed as a healthcare support worker. He was the family member of an EEA national and as such, by law, had the right to live and work in the UK under the relevant Free Movement Directive and the 2006 EEA Regulations. He had a residence card confirming his status as the family member of an EEA national but this expired on 20 January 2015. His employer asked him for evidence of his right to work and he was unable to provide this. The employer carried out right to work checks using the Home Office Employer Checking Service and the result came back as negative on several occasions. 

His employer refused to provide him with work or to pay him from 20 January 2015 until 17 November 2015, on the basis that they did not have evidence that he had the right to work. The employer was concerned that they risked a civil penalty of up to £20,000 as they would not have a statutory excuse if it turned out that he did not have the right to work. They also relied on the fact that there was a term in his contract requiring him to provide evidence of his right to work. 

Mr Badara brought numerous claims, including claims for unlawful deduction of wages and for direct and indirect discrimination on the grounds of race and/or nationality.

Decision

The employment tribunal accepted that at law Mr Badara had the right to work in the UK. However, in light of the risk of a civil penalty and taking into account the terms of his contract, the employment tribunal found that it was reasonable for his employer to require evidence of the right to work, including a positive result from the Home Office Employer Checking Service.  His claims were therefore unsuccessful.

Mr Badara appealed in relation to the claims for unlawful deduction of wages and for direct and indirect discrimination on the grounds of race and/or nationality.   

The Employment Appeal Tribunal (“EAT”) found that, where an individual is a family member of an EEA national, the individual’s right to work is derived from law on the basis of the individual’s status as the family member of an EEA national. It does not depend on documents issued by the Home Office.

The EAT acknowledged that the employer has relied on Home Office guidance in relation to illegal working. This guidance stated that “If you receive a Negative Verification Notice in response to your [Employer Checking Service] request you will no longer have a statutory excuse and you should not continue to employ that person.

There were however other sections in the same guidance which explained that there are no mandatory requirements for non-EEA nationals who are resident in the UK as a family member of an EEA national to register with the Home Office or to obtain documentation issued by the Home Office. It is open to family members of EEA nationals to demonstrate that right through other means. It went on to say that employers may choose to accept such alternative evidence or seek further advice from the Home Office. It warned that if the person did not in fact have the right to work the employer would be liable to a civil penalty of up to £20,000.

The EAT judge considered that, as Mr Badara had the right to work under EEA Regulations, it was properly arguable that it would be sufficient for him to simply produce evidence that he was the family member of an EEA national and show that he held a valid passport and that the employer was not entitled to request additional documentation.

The EAT went on to hold that the employment tribunal erred in concluding that it was reasonable for the employer to refuse to provide work to Mr Badara or to pay him in the absence of a positive verification notice from the Home Office. The claim for unlawful deduction of wages was remitted to the employment tribunal.

In relation to indirect race discrimination, it was accepted that the requirement that non-EU nationals must have a positive verification notice placed the claimant at a substantial disadvantage compared to EU nationals. The EAT took the view that the practice of relying on Employer Checking Service checks was not necessarily a proportionate means of achieving a legitimate aim and this was remitted to the employment tribunal.

The claim for direct discrimination was unsuccessful.  The EAT found that the reason for not offering Mr Badara work and not paying him was not on the grounds of Mr Badara’s race or nationality but was because of the negative verification notice. As such, the appeal in relation to the direct discrimination claim was dismissed.

Comment

This case highlights the tension between complying with the law regarding illegal working and seeking to avoid liability for employment claims. This is particularly problematic in relation to family members of EEA nationals who currently have a right at law to work in the UK, without the need to provide documentation. If such an individual does not provide the very specific documentation listed in the legislation relating to illegal working, the employer potentially risks a civil penalty if it turns out that the person does not, in fact, have the right to work in the UK. This may be, for example, because their spouse is not, in fact, an EEA national and the EEA passport is a forgery. However, if the employer takes action, such as suspending the individual or not paying them or dismissing them, the employer risks employment claims.

This case also demonstrates that employers should not rely solely on the outcome of the Employer Checking Service check. There have been numerous cases where the check has incorrectly produced a Negative Verification Notice.

We strongly recommend taking advice if you have any doubts as to whether an EEA national or their family member has the right to work and certainly before you take any action. Given that Brexit is imminent we anticipate that employers will increasingly encounter issues such as these. The transitional arrangements in relation to free movement are complex – especially for family members of EEA nationals. In many cases, individuals will still have the right to work in the months following Brexit but they may struggle to document this.

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