THE FACTS
Ms Chikale and her employer, Mrs Okedina, are both Malawian nationals. Using false information, Mrs Okedina obtained a six month visa for Ms Chikale, and brought her into the country as a live in domestic worker. Mrs Okedina kept Ms Chikale's passport. When Ms Chikale's visa expired in November 2013, Mrs Okedina applied for a visa extension on the false basis that Ms Chikale was a family member. Ms Chikale was unaware that the visa extension application was refused, and she continued to work very long hours, seven days a week, on low pay until June 2015. She was summarily dismissed when she asked to be paid more.
Ms Chikale brought claims in the employment tribunal for unfair and wrongful dismissal, unlawful deductions from wages, breach of the Working Time Regulations, race discrimination and failure to provide written particulars and itemised payslips. She was successful in all the claims that were categorised as "contractual" (meaning that they arose under the contract of employment). The only claim not categorised as "contractual" was the discrimination claim.
In the employment tribunal Mrs Okedina had argued that Ms Chikale could not bring claims relating to the period after her visa had expired in November 2013 because, from that date, her contract was illegal or illegally performed, and therefore any contractual claim from that date was unenforceable. The tribunal rejected these arguments. Mrs Okedina unsuccessfully appealed to the EAT, and then to the Court of Appeal.
Dismissing the appeal, the Court of Appeal considered both bases on which a contractual claim can be defeated on the grounds of illegality. Firstly, "statutory illegality", and then "common law illegality".
For statutory illegality to apply, the relevant statute would have to prohibit the making of the contract altogether, or provide that the contract (or a term of the contract) would be unenforceable. The relevant immigration legislation provides that an employer must pay a penalty for breaching immigration rules, but it does not prohibit the employment contract or state that any of the employment contract would be unenforceable. The argument of statutory illegality was therefore rejected.
The Court of Appeal also rejected the argument that the contract was unenforceable on the basis of common law illegality. Common law illegality arises if the contract involves conduct that is illegal or contrary to public policy and where it would be an appropriate response to that contract to deny enforcement of the contract. In the employment context, the employee must also have knowingly participated in the illegal performance of the contract. The Court of Appeal held that the employment tribunal and the EAT were both correct in rejecting Mrs Okedina's arguments of common law illegality on the basis that Ms Chikale was not aware that her visa had expired.
WHAT DOES THIS MEAN FOR EMPLOYERS?
Ms Chikale's innocence was key to this case. Where an employee is aware that they do not have the right to work, the employer will not be prevented from arguing that the employee is barred from bringing claims on the basis of common law illegality.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
