In May 2007, the Commission proposed a draft directive providing for sanctions against employers of illegally staying third country nationals. The proposal seeks to penalise employers of illegal immigrants while granting the immigrants legal terms of pay and employment.
On 19 February, the European Parliament voted on a first reading deal, negotiated behind close doors with the Council, under which Member States would be obliged to punish employers of illegal immigrants, imposing penal sanctions in the most serious cases. On 4 February, the European Parliament had already agreed to the compromise negotiated with the Council but had postponed its vote at the request of the rapporteur, Claudio Fava, who sought adding a declaration ensuring that further legislation on subcontractors can be adopted in the future. The compromise deal still needs to be formally endorsed by the Council.
The proposal contains a general prohibition on the employment of illegal immigrants. According to the European Commission the possibility of finding work encourages illegal immigrants into the EU. In the Commission’s view as the Directive’s provisions are aiming at reduce illegal immigration into the EU the appropriate legal basis is Article 63(3) (b) of the EC Treaty.
The UK has decided not to opt into this directive since it has concerns over several areas of the proposal. The UK Government rightly believes that the Community has no competence to introduce criminal penalties under the EC Treaty. Moreover, according to the Government there are several provisions that would place unnecessary administrative burden on employers as well as would create a pull factor for illegal immigrants.
Under the Directive, Member States would be required to oblige employers, before recruiting third-country nationals, to check if they have a residence permit or another authorisation for stay. Furthermore, businesses and legal persons would further be obliged to notify the competent national authorities of the start of employment of third country nationals. Such notification requirement would impose unnecessary administrative burdens on employers.
Employers who cannot show that they have carried out those obligations would be liable to sanctions. Therefore, Member Sates would be required to provide for effective, proportionate and dissuasive sanctions against the employer. These shall include financial penalties according to the number of illegal workers employed and contributions to the costs of returning illegally staying third-country nationals.
Moreover, employers would be required to pay any outstanding remuneration to the illegal immigrants for the work they have undertaken as well as taxes and social security contributions. The employment relationship will be presumed to have lasted at least three months unless the employer or worker can prove differently. Member States would be required to put in place mechanisms to ensure that third-country nationals, even if they have left the Member State, receive any back payment of wages. According to the UK Government such provision “sends out the wrong message” to those who want to come to the EU Member States to work illegally.
Furthermore, Member Sates shall also provide for further sanctions against employers such as exclusions from entitlement to public benefits, aids or subsidies and exclusions from public procurement procedures for up to five years. The draft directive also provides for temporary or permanent closure of the establishments used to commit the infringement was well as temporary or permanent withdrawal of a licence to conduct the business activity in question.
Member States are required to ensure that the contractor of which the employer is a direct subcontractor may be held liable to pay any financial sanction and any back payments. Moreover, Member States shall ensure that the main contractor and any intermediate sub-contractor may be held liable where they know that the employing sub-contractor has employed illegally staying third country nationals.
Furthermore, under the draft directive, Member States would be required to provide for criminal penalties against employers of illegal immigrants in case of repeated infringements, the employment of a significant number of illegal third-country nationals, particularly exploitative working conditions, in circumstances where the employer knows that the worker is a victim of human trafficking and where the infringement involves the employment of a minor. Therefore, Member States would have to ensure that the criminal offences are punishable by effective, proportionate and dissuasive criminal sanctions. Presently, not all EU Member States apply criminal penalties for these cases.
The power to determine criminal liability and to impose criminal penalties is a sovereign power which should be kept. The EU should not be allowed to harmonise substantive criminal law but once it is, such legislation should at least be decided by unanimity which is not the case. The European Court of Justice has been ruling that the Community has competence under the EC Treaty for adopted criminal law measures when they are necessary for the implementation of Community objectives. However, according to the Court “the determination of the type and level of the criminal penalties to be applied does not fall within the Community’s sphere of competence.” But criminal penalties must be “effective, proportionate and dissuasive.”
The Minister of State for Borders and Immigration at the Home Office, Liam Byrne, has explained to the European Scrutiny Committee that “(…) even if there were competence in principle under the chosen legal base (Article 63 EC), the proposal would not satisfy the criteria established by the ECJ in Cases No. C176/03 and C440/05 since there is insufficient evidence that criminal law measures are essential in order to meet the policy objective, and the rules which the Directive would require Member States to criminalise would be ones of national rather than Community law.”
It is important to recall that the Lisbon Treaty confirms and expands the ECJ rulings. The Lisbon Treaty would allow the Union to define certain criminal offences and set minimum sentences for those found guilty of them, overriding UK criminal laws and sentencing policies. The new article 69f (2) provides that “if the approximation of criminal laws and regulations of the Member States proves essential to ensure the effective implementation of a Union policy in an area which has been subject to harmonisation measures, directives may establish minimum rules with regard to the definition of criminal offences and sanctions in the area concerned.” The procedure to adopt such directives will be the same which was followed to adopt the harmonization measures in question. This means that in the majority of the cases harmonization of criminal law will be decided by QMV through the ordinary legislative procedure (codecision procedure). It should be mentioned that the UK might not have an opt out from substantive criminal law measures as they will be adopted to ensure the implementation of another Union policy and the decision making procedure is to be found in the provisions concerning the policy in question therefore, it will be out of the Protocol on the area of Freedom, Security and Justice.
In addition, Member States are required to establish effective complaint mechanisms by which illegal immigrants could lodge complaints against their employers. Moreover, Member States, under the proposal, shall define the conditions to grant residence permits of limited duration, related to the length of the national proceedings, to third-country nationals who have been victim of exploitative working conditions and who collaborate in criminal proceedings against the employer.
Furthermore, Member States would be required to inspect the employment of illegal immigrants in at least 5% of their companies every year.
