The ‘illegality principle’ prevents a court from aiding a claimant who has based their claim on an immoral or illegal act, meaning that a tribunal or court will generally not enforce an illegal contract.
An employer of an individual working under an illegal contract can raise a defence against any employment claims the individual may bring against them. This is what is known as the ‘illegality defence’, the basis of which is that the contract is illegal and therefore void, so the claim should not succeed.
A common example of an individual working under an ‘illegal contract’ would be an employee who is working in the UK despite not having the right to – i.e. working illegally, in breach of immigration laws.
In recent years, tribunals and civil courts have been reluctant to allow an employer to use the illegality defence to block vulnerable migrant workers’ employment tribunal claims.
An interesting Court of Appeal decision has further illustrated this. The case of Okedina v Chikale, has shown that an employer cannot always automatically rely on a breach of immigration rules to argue that an employment contract is unenforceable. The matter concerned contractual claims (including unfair dismissal) brought by a Malawian national whose leave to remain (and right to work) in the UK had expired two years before the time she was summarily dismissed.
The Claimant, Ms Chikale, was originally employed by Mrs Okedina in Malawi in 2010 where she was taken on to care for Mrs Okedina’s parents.
Mrs Okedina decided to bring Ms Chikale to the UK in July 2013 to continue to work for her as a live-in carer. Ms Chikale was initially granted a visa to work in the UK, however this expired in November of the same year.
Mrs Okedina assured Ms Chikale that she had successfully applied to extend the visa, however it transpired that within the application she had fraudulently named Ms Chikale as a family member, amongst other inaccuracies, and the application was subsequently refused. As a result, Ms Chikale was working illegally in the UK from November 2013 onwards.
Ms Chikale was never made aware that the application had been unsuccessful, so she remained in the UK, working for Mrs Okedina. She held a genuine belief that she had the right to continue working here in the UK.
Throughout her period of employment, Ms Chikale received only minimal remuneration, despite being promised a healthy salary and other benefits (including the provision of education) before leaving for the UK from Malawi in 2013. In 2015 when she requested an increased wage from Mrs Okedina, she was summarily dismissed. She then proceeded to bring a claim against Mrs Okedina for unfair and wrongful dismissal, unlawful deduction from wages, and unpaid holiday pay.
Ms Chikale’s claims were upheld at the Employment Appeal Tribunal which considered whether or not the contractual claims should have succeeded given that the contract was illegal from November 2013 (when the Visa extension was denied) onwards.
This case is distinct from most case law in this area as generally, an employee is well aware of their immigration status, and thus has some culpability should they continue to work illegally. In this case however, it was the employer, Mrs Okedina, who was concealing Ms Chikale’s true immigration status.
The Court of Appeal decision took account of this and ultimately found in Ms Chikale’s favour. The court considered whether the Immigration Asylum and Nationality Act 2006 (ss. 15 and 21) meant that an employee who had no right to work in the UK (even if they believed they did have this right) should be barred from bringing contractual claims by way of the principle of statutory illegality.
The court held that to imply the above would be going a step too far. It was held that the true intention behind the above legislation was to ensure penalties were imposed on people who knowingly employed illegal workers, rather than to penalise the workers themselves. The court decided against allowing the illegality defence in this case, as it would mean that an innocent employee would be deprived of all contractual remedies against their employer.
Ms Chikale, who was mistakenly under the belief that she had the right to work in the UK, had not knowingly participated in any illegality and as such the court held that there was no reason to deny her a remedy – the Court of Appeal therefore rejected Mrs Okedina’s appeal and upheld Ms Chikale’s contractual claims.