Unwitting whistleblowers: The compliance paradox facing employers of foreign nationals

Recent immigration enforcement has prompted many employers to revisit the immigration records of foreign nationals whom they may have employed, trusted and worked alongside for years.

They may believe that they are simply strengthening an internal compliance process or introducing controls that they had previously underestimated or misunderstood altogether. Many of the enquiries now reaching law firms and immigration service providers reflect the latter scenario.

Employers are responding differently; some seek to protect the business and those responsible from exposure and consequences, others aim to retain operationally important employees by determining whether an irregularity can lawfully be resolved. Many remain unaware that employing a foreign national creates distinct duties under the Immigration Act.

Enforcement risk is now visibly no longer confined to the foreign national. Government has confirmed that Home Affairs, the South African Police Service and the Department of Employment and Labour are increasing workplace inspections, while the phased recruitment of 10,000 labour inspectors has been announced. Recent operations have reached retail outlets, commercial premises and construction developments across South Africa.

The Immigration Act defines an “employer” broadly: the person contractually bound as employer and, in the case of a juristic person, its chief executive officer or the person to whom the chief executive officer has delegated final responsibility for personnel matters.

Section 38 prohibits an employer from employing an illegal foreigner, a foreign national whose status does not authorise that specific employment, or one employed on terms, conditions or in a capacity different from those contemplated by that status. The employer must make a “good faith effort” to ascertain that no illegal foreigner is employed and establish the status or citizenship of employees.

Importantly, “illegal” may include someone who entered lawfully, may even have a valid status, but subsequently acts in breach of the conditions of that status.

Rebuttable presumptions

Strictly speaking, the Immigration Act creates a rebuttable presumption of knowledge. In practical terms, however, that presumption operates within a framework in which unlawful employment and failures to comply with employer duties may constitute criminal offences.

If employment contrary to section 38 is proved, the employer is presumed to have known of it unless the employer establishes good faith and compliance with its enquiry obligations. If an illegal foreigner is found on business premises, the person controlling those premises is also presumed to have employed that individual unless prima facie evidence to the contrary is produced. Stricter compliance is expected of employers with more than five employees, or a previous related conviction.

These are not merely administrative requirements. Knowingly employing an illegal foreigner or a foreign national in violation of the Act is an offence carrying a fine or imprisonment of up to one year for a first conviction, with escalating penalties for repeat convictions. Failure to comply with a duty imposed under sections 38 to 46 is separately punishable by a fine or imprisonment of up to five years.

When verification triggers enforcement

A common example of the underlying misunderstanding is the assumption that possession of a valid passport means that a foreign national is documented. From an identification perspective, a passport may establish the person’s identity and nationality. It does not establish lawful immigration status in South Africa, even less the right to work for a particular employer in a particular position or capacity.

A passport may be entirely valid while its holder is unlawfully present, has no authority to work, or is employed outside the conditions of an otherwise valid status.

Depending on the process followed and the result obtained, immigration verification may become the point at which an employee is first formally brought to the attention of Home Affairs as the holder of a visa or permit that the department does not recognise as having been lawfully issued or is unable to verify.

Corporate background-screening providers offer paid visa and permit verification services, and some immigration service providers distinguish “informal” enquiries through Home Affairs from formal processes yielding written departmental confirmation. Meanwhile, the Department’s public online status-verification service remains suspended and refers users to its contact centre. These routes exist, but are fragmented, not necessarily equivalent, and not explained in any single, publicly available employer guideline.

Direct and free enquiries with the department are routinely subject to extensive delays and procedural shifts. In recent matters encountered in practice, Refugee Reception Offices approached to verify an asylum seeker or refugee permit have required the status-holder to sign a Popia Indemnity form before verification will proceed. Whatever prompted it, the effect is telling: an employer seeking to verify a permit lawfully must now first ask the employee to consent, in writing, to the very process that may expose them to Home Affairs.

This also exposes employment agreements drafted only for labour-law compliance. General warranties of status validity are insufficient where, for example, an indefinite term is offered to the holder of a temporary residence status, or where the agreement does not require continuing cooperation with verification.

The illusion of lawful status

While some fraudulent documents are readily identifiable to the trained eye because they may contain discrepancies in wording, font, numbering, layout, official designations or endorsed conditions, highly sophisticated fraudulent documents are also in circulation and may appear entirely credible to an employer, human resources officer, bank or other institution.

Documents accepted during previous institutional checks have subsequently failed more thorough scrutiny or verification. Previous travel into and out of South Africa is similarly not conclusive. Ultimately, only verification against Home Affairs’ records can determine whether the document was lawfully issued. Even then, an inability immediately to verify a document should not, without more, be equated with a concluded finding of fraud.

This is especially problematic for employers undertaking retrospective compliance reviews. An employer may have no reason to believe that a long-serving and trusted employee deliberately participated in fraud.

The employee may have obtained it through an agent and genuinely believed it was lawful.

The employer may initiate verification to resolve the discrepancy, protect the employee and regularise the employment relationship. However, by seeking to correct its own compliance position, an employer may become an unwitting whistleblower for immigration enforcement.

In submitting the employee’s identity and immigration document for formal verification, the employer may unknowingly provide Home Affairs with information that identifies a possible immigration contravention and may lead to the employee being placed on the Visa Stop List (V-List).

The verification request does not itself make the employee a prohibited person. But if Home Affairs concludes that the document is fraudulent, the consequences may extend far beyond a negative report to the employer.

Under section 29(1)(f), a person found in possession of a fraudulent visa, passport, permanent residence permit or identification document is a prohibited person and “does not qualify for a port of entry visa, admission into the Republic, a visa or a permanent residence permit”.

What begins as an attempt to identify a solution and demonstrate compliance may therefore place the employee in the most adverse legal position in terms of the Immigration Act. The employer’s due diligence exercise becomes a referral into the state’s immigration-enforcement system.

Fixing the paradox

This is not an argument that employers should avoid verification, disregard suspicious documents or conceal non-compliance. The paradox is that employers are required to make meaningful enquiries, yet no universally understood process explains which verification route should be followed, what protection it gives the employer, when the employee is formally identified to Home Affairs, or what consequences an adverse result may trigger.

That uncertainty creates significant vulnerability for both parties. The foreign employee may face prohibition, V-Listing and loss of status before understanding the implications of the verification process. The South African employer may face criminal and regulatory exposure whether it fails to enquire sufficiently or initiates a process the consequences of which it was not equipped to anticipate.

The state must therefore develop a coordinated interdepartmental verification protocol, subject to appropriate consent and data protection safeguards, that clearly defines the available processes, their evidential effect, the point at which reporting or enforcement may be triggered, and the protection afforded to employers that comply in good faith.

Investigation, determination and enforcement remain functions of the state. Employers should be required to comply with a clear and workable process, not unknowingly assume responsibilities that belong to immigration authorities. DM