HHJ Evans sitting at the Manchester County Court dismissed an appeal against a Civil Penalty Notice in the amount of £40,000 issued to an employer following a data sharing from HMRC.  As a first breach, the maximum penalty was £45,000 which was reduced to £40,000 in line with the Code of Practice.

The employee was somebody who had entered the UK as a dependent and then overstayed.  Although the employer appealed on the principle basis that it was not liable for a penalty or in the alternative had a statutory excuse, in the course of argument at the hearing it accepted that as a result of employing someone who did not have the right to work, it was liable and because it did not carry out the prescribed checks, could not rely on the statutory excuse.  The only issue left was whether the penalty amount was too high.

Tony Muman was instructed for the Secretary of State to defend the appeal.

HHJ Evans rejected the employer’s claim that the Secretary of State had failed to exercise her discretion properly.  The learned judge found that not only was the Secretary of State entitled to exercise her discretion to issue the penalty, but that she was right to do so.  HHJ Evans rejected the submission that the Secretary of State acted unreasonably, finding that the law is absolutely clear and the process by which checks are to be carried out specified in the statute and statutory instruments.  The learned judge agreed with the employer that £40,000 was a large amount of money, especially for an employer who up until that point was of good character.  But, that  is the figure that the Secretary of State and Parliament has chosen to set the starting point at, noting that it was now significantly higher than it used to be.  The employer was also ordered to pay the Secretary of State’s costs.

Tony Muman is an expert in civil penalty cases and was instructed by Lauren Pritchard at Keoghs Solicitors.

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