In an appeal against a civil penalty of £10,000 imposed on J. N. Dairies Limited for allegedly employing Veerpatap Singh, who was discovered to be working illegally in the UK, Tony Muman was instructed by the Government Legal Department for the Secretary of State.

J. N. Dairies contested both the liability for the penalty and its amount, while the Secretary of State asserted that Singh was employed by J. N. Dairies during the relevant period.

Her Honour Judge Wall heard the appeal over two-days sitting at the Birmingham County Court.

Factual Background

J. N. Dairies is a family-owned dairy business. On 2 November 2023, immigration officers entered the business premises and encountered Singh cleaning a van. Singh had a complex immigration history, having overstayed his visa and claimed asylum, which was subsequently refused.  The central issue was whether Singh was indeed employed by J. N. Dairies or present for other reasons.  J. N. Dairies argued that Singh was on site as a favour to his uncle, an employee of J. N. Dairies, and not as an employee.

Legal Framework

The Immigration, Asylum and Nationality Act 2006 prohibits the employment of individuals who do not have the right to work in the UK.  The Secretary of State can impose penalties for violations of this provision.  The appeal process allows employers to contest the imposition of penalties based on liability or the amount of the penalty.

Burden of Proof

A preliminary issue arose as to which party bore the burden of proof.  HHJ Wall was asked to rule on the issue determinatively for the first time in a civil penalty appeal issued for illegal working.

It was common ground that the standard of proof to be applied is the balance of probabilities, which is the usual standard in civil proceedings. The primary issue in contention was the allocation of the burden of proof.

Leading Counsel for J. N. Dairies contended that the burden of proof rested with the Secretary of State relying on the statutory scheme’s reference to the appeal being by way of re-hearing (see s17(3) IANA).  His contention was that since a penalty is only imposed if the Secretary of State satisfies itself of the conditions for its imposition, it must therefore be for the Secretary of State to satisfy the Court in a re-hearing.  He also argued that the State had imposed a financial penalty and as such the State bore the burden of proof to establish the factual basis for the penalty.

Tony Muman argued that the statutory language in s17(1) IANA explicitly places the burden on the employer to show they are “not liable”, and that the reference to a “re-hearing” does not imply that the Secretary of State must bear the burden of proving its case again.  Instead, it means that the court undertakes a merits-based approach to the appeal, considering all evidence presented, including evidence not before the Secretary of State when the penalty was imposed (see s17(3)(b)).  This position is supported by appellate-level authorities, particularly the Court of Appeal’s guidance in Akbar v Secretary of State for the Home Department EWCA Civ 16 and Khan v HM Revenue and Customs EWCA Civ 89.  In Akbar, the Court observed that s17(1) “places the burden on an employer to demonstrate to the court that it is not liable” (paragraph 8).  In Khan, the Court stated that the general principle is that where a statute provides a right of appeal against enforcement action by a public authority, the burden of establishing the grounds of appeal lies with the employer (paragraph 70).  This principle is reinforced where the relevant facts are within the employer’s knowledge (paragraph 71).

Upon reviewing the arguments and authorities, HHJ Wall concluded that Tony Muman’ssubmissions were correct.  In this appeal, it was for J. N. Dairies to prove its case.  The weight of appellate authority recognises the general principle that an appellant bears the burden of proof in a civil penalty appeal.  The “re-hearing” of the decision to impose the penalty refers to a merits-based approach that is not limited to the material before the Secretary of State and does not reverse the usual burden of proof on an appeal.

On instruction Tony Muman agreed that this general principle can be disapplied if there is something in the statute or the nature of the appeal that supports a contrary position.  However, neither applied in this context.  Section 17(1) IANA provides that the employer may appeal on the grounds that they are not liable, are excused payment, or the penalty amount is too high.  This statutory wording is consistent with the general rule that the employer must establish the grounds of appeal.

The real nature of the appeal is whether Singh was employed by J. N. Dairies.  This issue was peculiarly within the knowledge of J. N. Dairies, not the Secretary of State.  Therefore, there was no basis for departing from the usual approach that it is for the employer to show that it is not liable for the penalty.

Similarly, there is no basis for departing from the usual approach when considering the appeal against the quantum of the penalty.  Neither the statutory language nor the essential nature of the appeal provides any basis for doing so.  Further, where an employer wishes to present additional factors to support a departure from the penalty approach set out in the Code, those factors are within the employer’s knowledge, not the Secretary of State’s.

Findings and Reasons

HHJ Wall held that Singh was indeed employed by J. N. Dairies.  The evidence presented, including Singh’s actions at the time of the encounter and the context of the intelligence leading to the immigration officers’ visit, supported this finding.  The explanation provided by J. N. Dairies regarding Singh’s presence was found to be unconvincing.

• The encounter occurred while Singh was engaged in tasks typically performed by an employee.
• The timing and circumstances of the encounter suggest regular employment rather than a casual visit.
• The alternative explanation offered by J. N. Dairies was dismissed due to inconsistencies and lack of credible evidence.

 Amount of Civil Penalty

HHJ Wall also addressed the second ground of appeal, namely the amount of the civil penalty to be paid.  The court recognised that there was a discretion to impose a penalty at all, but held that the £10,000 penalty was appropriate given the circumstances of the case.  J. N. Dairies arguments for mitigation, including their cooperation with authorities and the social context of Singh’s presence, were deemed insufficient to justify a reduction.

Conclusion

The appeal was dismissed, and the civil penalty of £10,000 upheld with J. N. Dairies having to pay the Secretary of State’s costs of defending the appeal.

 

Tony Muman is an expert in Civil Penalty Notice appeals and accepts instructions for both Employers and the Home Office. 

For any booking enquiries relating to Tony Muman please contact his clerk cridley@halcyonchambers.com