Rov, the system is riddled with 'special cases'. Here's one that is still open for use (or abuse?).
http://www.ukba.homeoffice.gov.uk/workingintheuk/othercategories/domesticworkers/
The rules have undoubtedly tightened up hugely over the last couple of years but we all know there are still tens of thousands of people out there in this country who either came here illegally initially, or who came here legally initially on limited length visas and have stayed too long (overstayers). Many of these people had to right to work here, so got Ni numbers. I'm not talking about asylum seekers - they are something else completely.
The fine is not a £10k fine - but a fine of up to £10k. Clearly Baroness Scotland ought to be hauled before the courts and it will be interesting to see what happens.