Given all the legal and HR issues you usually need to consider when taking on a new contract or buying a business, it's easy to forget the immigration issues which may arise if employees transfer to your business under the Transfer of Undertakings (Protection of Employment) Regulations (TUPE).

Right to work checks

In relation to right to work checks, in their latest guidance the Home Office finally acknowledges that right to work checks carried out by the transferor (the seller/previous employee) are deemed to have been carried out by the transferee (the buyer/new employee). As such, the Home Office now accepts that the transferor will obtain the benefit of any statutory excuse established by the transferee.

However, if the transferor did not conduct the original checks correctly (for example, if it conducted the checks after the person's employment started or it did not keep records properly), the transferee would be liable for a civil penalty of up to £20,000 if an employee is later found to be working illegally.

We therefore always recommend that you undertake fresh right to work checks in relation to any employees who transfer to your business pursuant to TUPE. The Home Office offers employers a grace period during which you should undertake the fresh right to work checks. This period runs for 60 days from the date of the TUPE transfer. Provided that the fresh right to work check is carried out correctly, in line with Home Office guidance, and within the 60 day grace period, you'll establish a statutory excuse against a civil penalty.

Also, a fresh check by the transferee may be the only way to determine whether any follow-up check needs to be carried out in respect of employees with time-limited permission to work in the UK. Any such follow up check must be undertaken before the person's leave expires and there is no grace period for any subsequent follow-up checks.

It's worth noting that employers are not required to have a statutory excuse in respect of employees whose employment commenced before 29 February 2008, where the individual has been in continuous employment prior to that date. This includes where employment has continued as part of a TUPE transfer.

Sponsored employees

If employees are transferring to your business pursuant to TUPE you should also check (well before the date of the transfer) whether any of the transferring employees are non-British migrants sponsored by the transferor. If so, various notifications will need to be made to the Home Office by both the transferor and the transferee to inform the Home Office that the employees have transferred to a new employer pursuant to TUPE. If any of the transferring employees are sponsored, but your business does not have a sponsor licence, it will also need to apply for a sponsor licence to be able to continue to sponsor and employ those employees. The notifications and the application for the sponsor licence must be made within 20 working days of the transfer date so we recommend taking advice as early as possible.

Unfortunately failing to deal with the immigration issues could be costly and could mean that the business is unable to continue to employ some of the transferring employees. That in turn could lead to employment claims and reputational damage so it's worth considering any immigration issues at any early stage.