The recent case of Nayak v Royal Mail Group Ltd clarifies the distinction between dismissing for breach of statutory restriction and “some other substantial reason” in cases involving expiry of the right to work.
The Employment Rights Act 1996 sets out that, where an employee has more than two years’ service, an employer must dismiss for one of five “potentially fair” reasons: conduct; capability; redundancy; statutory restriction; or some other substantial reason (SOSR). Where an employee does not have the right to work in the UK an employer will often rely on statutory restriction as a potentially fair reason for dismissal, since continuing to employ them would be in breach of the law. Employing someone who does not have the right to work carries a hefty fine of up to £20,000 per employee. Such a dismissal will only be fair if the employer conclusively knows that the person doesn’t have the right to work.
But what happens if an employer is unable to conclusively establish whether an employee’s right to work has expired? This case demonstrates that it is also possible to fairly dismiss an employee for SOSR in those circumstances. Mr Nayak was employed by Royal Mail on a number of different visas. He began employment in 2008 on a visa that expired in 2009. He was then granted another visa which expired in 2010. Prior to the expiry of the second visa, Mr Nayak applied for a third visa.
Right to work rules permit an employer to continue employing someone if their application is under consideration, so he continued to work for Royal Mail between 2010 and 2014. Royal Mail had a policy of carrying out six-monthly RTW checks where an employee’s right was based on an outstanding application. Royal Mail made extensive enquiries of Mr Nayak and the Home Office in line with this policy. The Home Office was only able to provide limited information to Royal Mail and Mr Nayak, who could have obtained more conclusive evidence, repeatedly failed to engage with his employer.
Eventually, four years after the application was made, Royal Mail dismissed Mr Nayak on the basis that it had a genuine belief that Mr Nayak did not have the right to work, even though it had no conclusive proof. In Royal Mail’s experience, individuals in similar situations failed to respond to reasonable requests following a change in immigration status which could lead to their dismissal. It argued that it was therefore reasonable to conclude that Mr Nayak no longer had the right to work. The EAT accepted that Royal Mail had acted reasonably in dismissing Nayak, particularly given the efforts it had gone to in making enquiries about immigration status.
This case serves as a useful reminder to employers that dismissal for statutory restriction will only be fair if the employer knows that continuing to employ someone is illegal. In cases such as this one, it may be very difficult to obtain conclusive proof of status and an employer will no doubt want to take action, particularly with the threat of a £20,000 fine looming over the situation. While an SOSR dismissal may be fair in those circumstances, it is important to note that the employer must have a genuine and reasonable belief and therefore must be in a position to demonstrate that it has made reasonable enquiries of the Home Office and employee.
Right to work checks and dismissals can be notoriously tricky to get right. If you need guidance in this area, contact your Legal Manager for advice. If you or your team could do with training on how to deal with right to work issues our Training Manager, Lorna Gemmell, would be delighted to discuss how we can assist you. Lorna can be contacted on 0141 271 5555 or at firstname.lastname@example.org.