On 29 January, Mr Singh Sekhon gave an undertaking to the Insolvency Service not to manage or control a company for six years, from 19 February 2016 until 2022.
An investigation by the Insolvency Service found that, while a director of Kirkcrest Limited, Mr Sekhon’s failure to ensure that the company complied with its statutory obligations under immigration law (specifically, to make sure that relevant immigration checks were completed and copy documents retained), resulted in the employment of 4 illegal workers.
Following a visit from Home Office Immigration officers in January 2015, during which the illegal workers - and thus the breach - were discovered, the company was issued with a £25,000 penalty notice, which remained outstanding at the date of liquidation.
In addition, all of the illegal workers were found to be paid less than the national minimum wage, contrary to the National Minimum Wage Act 1998.
Robert Clarke, Group Leader, Insolvent Investigations North, said:
The Insolvency Service rigorously pursues directors who break employment and immigration laws. Taking on staff illegally means they do not enjoy basic employment rights, a clear breach of a director’s duties.
The public has a right to expect that those who break the law will face the consequences. Running a limited company brings with it statutory obligations as well as protections, and this should serve as a warning to other directors tempted to take on illegal staff.
Notes to editor
Kirkcrest Limited (CRO No. SC420855) was incorporated on 30 March 2012 and traded as Bombay Blues, an Indian restaurant, from 41 Hope Street, Glasgow, G2 6AE.
Mr Singh Sekhon’s date of birth is 1 July 1955 and he resides in Bearsden, Glasgow.
Mr Singh Sekhon was the sole director from 2 April 2012 until 1 December 2014. The Company went into Liquidation on 1 December 2014 with an estimated deficiency of £94,794, including the civil penalty imposed upon the company by Home Office Immigration Enforcement.
On 29 January 2016, the Secretary of State accepted a Disqualification Undertaking from Harcharan Singh Sekhon, effective from 19 February 2016, for a period of 6 years. The matters of unfitness, which Mr Singh Sekhon did not dispute in the Disqualification Undertaking, were that:
- I failed to ensure that Kirkcrest Limited (Kirkcrest) complied with its statutory obligations under The Immigration, Asylum and Nationality Act 2006 to ensure that relevant immigration checks were completed and copy documents retained resulting in the employment of five illegal workers. In addition, I caused or allowed Kirkcrest to breach the National Minimum Wage Act 1998.
- Home Office Immigration Enforcement (HOIE) officers visited the trading premises of Kirkcrest on 15 January 2014 and discovered that the company was employing 5 illegal workers. I was the sole appointed director of Kirkcrest at that date.
- On 26 March 2014 Kirkcrest was issued with a Notification of Liability for a Civil Penalty in respect of employees who were working without appropriate leave to work in the UK under Section 15 of the Immigration, Asylum and Nationality Act 2006.
- Under Section 15 of the Immigration, Asylum and Nationality Act 2006 Kirkcrest received Civil Penalties totalling £25,000 from HOIE in respect of the 5 employees found to be employed by Kirkcrest without the appropriate leave. The penalties were to be paid by 25 April 2014. Kirkcrest did not make any payments.
- None of the five employees found to be illegally employed by the company during a visit to its trading premises by HOIE officers on 15 January 2014 were included in the RTI Full Payment Submission to HMRC by Kirkcrest for January 2014, or previous periods. Therefore HMRC were unaware of any Pay As You Earn/National Insurance Contributions liabilities arising in respect of the employment of these individuals.
- Four of the workers found to be illegally employed by the company during a visit to its trading premises by HOIE officers on 15 January 2014 were paid below the national minimum wage, according to information they provided, contrary to the National Minimum Wage Act 1998.
A disqualification order has the effect that without specific permission of a court, a person with a disqualification cannot:
- act as a director of a company
- take part, directly or indirectly, in the promotion, formation or management of a company or limited liability partnership
- be a receiver of a company’s property
In addition that person cannot act as an insolvency practitioner and there are many other restrictions placed on disqualified directors by other regulations.
Disqualification undertakings are the administrative equivalent of a disqualification order but do not involve court proceedings.
Further information on director disqualifications and restrictions is available.
The Insolvency Service administers the insolvency regime, investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent. It may also use powers under the Companies Act 1985 to conduct confidential fact-finding investigations into the activities of live limited companies in the UK. In addition, the agency authorises and regulates the insolvency profession, deals with disqualification of directors in corporate failures, assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees, provides banking and investment services for bankruptcy and liquidation estate funds and advises ministers and other government departments on insolvency law and practice.
Further information about the work of the Insolvency Service, and how to complain about financial misconduct, is available.
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