Exercise illegal occupation (5)
I believe the answer is:
squat
I believe this clue is a double definition.
'exercise' is the first definition.
(squat is a kind of exercise)
'illegal occupation' is the second definition.
(I've seen this before)
(Other definitions for squat that I've seen before include "Illegally occupy property" , "Short and dumpy; occupy building" , "Short and wide" , "residence occupied" , "Crouch - occupy a dwelling illegally - short and stocky" .)