Employing Illegal Workers in Licensed Premises

In a key judgement for the licensed trade a High Court Judge has decided that a licensing authority’s decision to revoke a premises licence for employment of an illegal worker was correct.

The immigration authorities carried out a raid on a restaurant operated by Mr Hanif which was located in East Lindsay and discovered that he was employing illegal workers. Following this discovery the Police brought a review of Mr Hanifs’ premises licence and the licensing authority made the decision to revoke it. Mr Hanif took the decision to appeal their decision to the Magistrates Court.

It was argued on behalf of Mr Hanif that, as he had not been prosecuted for employing an illegal worker under section 21 of the Immigration, Asylum and Nationality Act 2006, but had been handed a civil penalty under section 15 under the same legislation, the crime prevention objective was not engaged.

However, at the hearing of the appeal, it was established that Mr Hanif had not only employed the illegal worker without seeing paperwork that showed a right to work in the UK, but had also paid him cash in hand which equated to less than minimum wage. He did not keep or maintain PAYE records and did not make returns to HMRC (although he deducted tax from the worker’s salary).

In this appeal the District Judge decided that as no prosecution had been brought or no crime reported, the crime prevention objective was not engaged and the failure to pay the minimum wage had not been the main focus of the licensing authority’s decision.

The Council then appealed by way of case stated to the High Court and argued that it is not necessary for a crime to have been reported, prosecuted or established in a court of law in order for the objective to be engaged as the licensing objectives are prospective and are looking to avoid harm in future.

Mr Justice Jay decided that remission of the case to the Magistrates Court was not appropriate as he considered the Council’s decision to revoke the licence was correct as there was a clear inference that Mr Hanif knew that he was employing an illegal worker and so a deterrent approach was justified as he was not only defrauding HMRC but exploiting a venerable person.

Mr Hanif was ordered to pay High Court Costs of £15,000, but reserved judgement on the costs incurred in the Magistrates Court

The important point to note here is the principle that it is not necessary for a prosecution to be brought in order for the crime prevention objective to be engaged as this case can now be cited in any future cases on the certification of Mr Justice Jay.