Buying a business? Beware illegal workers!

Make sure when you are carrying out your due diligence exercise that you also check that all employees can legally work in the UK. If there are employees who are transferring to you and have been granted leave to work in the UK under the tier system, you need to ensure you are a sponsor. If you are not a sponsor, you must apply for a Sponsorship Licence within 28 days of the date of the transfer of the business. If your application is unsuccessful, then the workers who are due to transfer to you will have their permission to stay and work in the UK curtailed. If you are already a sponsor, then you need to get an increase to your current allocation under the certificate of sponsorship.

The Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”) do not protect you if you fall foul of the immigration legislation. It is not enough to say that you were purchasing a business and, as such, all employees automatically transfer to you. If you do not have the necessary Sponsorship Licence to take on those employees, then you will be subject to a fine of up to £10,000 per illegal worker.