In a recent development with significant implications for immigration enforcement and employer liability in the UK, the Court of Appeal has granted permission to appeal a County Court decision concerning civil penalties for illegal employment. The case of Jen and Jamie Ltd v Secretary of State for the Home Department arose from fines imposed on a small business for allegedly employing individuals without the right to work in the UK. The central legal issue now before the Court of Appeal is whether judges in civil penalty appeals may exercise judicial discretion to consider mitigating factors beyond those set out in the statutory Code of Practice when determining the amount of a penalty.
At first instance, the County Court dismissed the appeal brought by the business. The controversy arose after the Home Office issued two £40,000 penalties under section 15 of the Immigration, Asylum and Nationality Act 2006, on the basis that two women were engaged in work for the company without legal entitlement to work. Although the company accepted that unpaid work had taken place, it denied there was an employment relationship. The County Court upheld the Home Office’s position, finding that the frequency and structure of the work created mutual obligations tantamount to employment. The court also held that it could not take account of matters outside the statutory Code of Practice in assessing the appropriate penalty.
Permission to appeal was sought on two grounds: first, that the judge materially erred in finding an employment relationship; and second, that the judge wrongly concluded that no judicial discretion existed to consider factors outside the Code of Practice when setting a penalty. On 17 December 2025, Lord Justice Singh granted permission to appeal on the second ground —the question of judicial discretion—noting that it raises an important principle and has a real prospect of success.
This case has attracted attention in the context of rising civil penalty levels and growing scrutiny of the UK’s “hostile environment” immigration regime. Since February 2024, penalties for first-time breaches have increased drastically leading to concerns that even a single penalty can threaten the viability of small businesses. Representative organisations have urged recognition that penalties disproportionately affect small employers and call for a more nuanced approach to enforcement.
The Court of Appeal’s forthcoming judgment on judicial discretion in civil penalty appeals is therefore likely to clarify an area of law that has been marked by inconsistent decisions and uncertainty. If the appellate court recognises broader judicial discretion, it may allow courts to account for mitigating circumstances not strictly prescribed by the Code of Practice, potentially easing the penalty burden in appropriate cases. Conversely, a restrictive interpretation would reinforce the existing statutory framework and limit judicial flexibility. Either outcome will shape how civil penalty appeals are litigated and the degree of judicial discretion available in assessing sanctions.
