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Do right to work checks need to be performed on TUPE employees?

Whilst right to work checks may commonly be at the forefront of an employer's mind when hiring new staff, it is all too often an afterthought in any TUPE situation, despite the significant and dire consequences that could be lurking just around the corner.

The right to work check is the check that an employer should undertake to meet the devolved duty to prevent illegal working and avoid the hefty civil and criminal penalties that can be incurred. Specifically civil fines of up to £20,000 per illegal worker can be imposed, whilst knowingly employing an illegal worker can lead to a criminal sanction of up to 5 years imprisonment and an unlimited fine. Thus, right to work checks should always be performed before an individual commences employment, to ensure they can be employed legally in advance to avoid such consequences.  More information about this can be found on our Visa Guidelines Hub.

TUPE refers to the process under the Transfer of Undertakings (Protection of Employment) Regulations which allows an employee’s employment to be automatically transferred to a new employer upon them taking over an existing business or service provision.

However this raises the question:

Do right to work checks need to be performed on TUPE employees?

UK Visas and Immigration’s position is that the incoming employer (the transferee) receives the benefit of the outgoing employer’s (the transferor’s) statutory excuse and so avoid sanction should the employee be working illegally.  This means that the transferor must have performed the checks correctly before employing the individual, the transferee will benefit from the legal protections allowing them to.

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However, if the transferor failed to perform the checks, or did not perform them correctly, the transferee would be on the hook for any resulting civil or criminal sanctions if the employee does not have the right to work. Further, some employees may have the right to work in the UK for a time-limited period so, whilst originally employed lawfully, the transferee is at risk of being held liable should this expire without their knowledge.

Therefore it is advisable, when inheriting new staff under TUPE, that you perform fresh right to work checks in any event, to ensure that they are performed correctly and in accordance with the UK Visas and Immigration guidance in order to avoid exposure to any potential criminal or civil liability.

Thankfully, new employers in this situation do have a 60-day grace period from the date of the transfer to perform the necessary right to work checks before sanctions may be issued against them. This therefore provides a small amount of breathing room to allow these checks to be performed following the transfer.

In addition to performing fresh right to work checks, the transferee, during the due diligence process, should also ensure they have access to adequate information about the existing right to work processes in place to ensure their adequacy, and it is also advisable to incorporate a warranty and indemnity into the contractual documents to protect itself from any liability which may arise.

If the transferee is inheriting employees who are sponsored for a visa, there are also further crucial obligations for both the transferee and transferor to be aware of, including ensuring that the transferor notifies UK Visas and Immigration of the change of employer and end of sponsorship.  The transferee must also have a valid sponsorship licence to employ the sponsored employees and request the transfer of the employees to that licence.  Employers without a licence must apply for one within 20 working days of the TUPE transfer taking place.

This is the first article in our tricky right to work series, be sure to follow us on LinkedIn to receive all of our updates on this very important topic.

For more information, or any further guidance on TUPE arrangements, right to work checks or sponsorship of employees, please visit the Visa Guidelines Hub or contact a member of the Employment or Immigration team.