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Emma O'Connor
Emma O'Connor,
HEAD OF TRAINING
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Does an argument of 'illegality' of the employment contract always win?
19 November 2014

We report on a recent case where the claimant, employed under an ‘illegal’ contract of employment, sought protection under UK employment laws.

Facts

In Hounga v Allen and ors, Miss Hounga, a 14 year old Nigerian national, had agreed to work as a live-in housekeeper/au pair for Mrs Allen. After Mrs Allen had helped Miss Hounga illegally enter and work in the UK she continued to employ her for a further 18 months after her 6 month visitor’s visa had expired. Miss Hounga was promised a salary of £50 per month and time to attend school in exchange for her services, but these promises were not fulfilled. After being verbally abused and forced out of the house, Miss Hounga brought an Employment Tribunal claim against Mrs Allen for unpaid wages, breach of contract, and race discrimination. However, as she was in the UK illegally, was she protected under UK law or could Mrs Allen argue ‘illegality’ of the contract?

Conflicting Decisions

This case made its way to the Supreme Court with the Employment Tribunal, Employment Appeal Tribunal and Court of Appeal all disagreeing with what to do with Miss Hounga’s employment and immigration status. Initially, the Employment Tribunal dismissed Miss Hounga’s claims of breach of contract and unpaid wages since the contract itself was illegal. However, the tribunal ruled that the claim of race discrimination should be allowed. Mrs Allen then unsuccessfully appealed to the Employment Appeal Tribunal. However, Mrs Allen’s appeal to the Court of Appeal was successful as this court disagreed with the tribunals’ view, finding that the contract was central to the claim and any ruling in favour of the claimant would condone the illegal nature of the contract. In response Miss Hounga launched her own appeal in the Supreme Court.

Supreme Court Decision

The central issue that the Supreme Court had to deal with was whether Miss Hounga’s contract of employment was central to the allegations of racial discrimination. The Supreme Court found that there was no ‘inextricable link’ between the two, and that the contract was merely “context” to the abuse. The race discrimination claim was upheld, and Miss Hounga was awarded in excess of £6,000. The Supreme Court explained that a defence relating to an illegality of contract is only based on a public policy concern in order to preserve the integrity of the legal system. In this case, the court suggested that the illegality defence was less significant than a larger public policy concern, human trafficking.

Comment

Often the defence of ‘illegality’ is argued when issues of employment status and employment rights come into conflict. The employer will seek to argue that a worker cannot have the benefit of an illegal contract (for example, not paying income tax), only to then have the benefit of being protected by employment laws. However, this case illustrates that a defence of illegality does not always result in the dismissal of an entire case if there is a greater ‘public policy concern’ involved.

Employers are reminded of the importance of complying with immigration rules when a person commences work. Employers should always see original documents and not rely on photocopies. For information on what checks your organisation should be doing to avoid fines and claims, please contact our Immigration Team via our website or at [email protected] or 0118 952 7284.

Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.

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