In the recent case of Okedina v Chikale, the Court of Appeal has considered the impact of breaches in immigration rules on the enforceability of employment contracts. The ruling is available here.
Miss Chikale, a Malawi national, was employed in Malawi by Mrs Okedina in 2010 and was given a contract. She came to the UK in 2013 as a domestic worker with the right to remain for 6 months, and in conjunction with her immigration application in 2013 received a new, open-ended contract, with a 6 week notice of termination clause.
Miss Chikale remained working for Mrs Okedina in the UK after her permitted six months, and Mrs Okedina applied for her to remain here as a family member. That application was rejected but Miss Chikale did not inform Mrs Okedina and carried on working. She was dismissed in August 2015 following issues over payment and a request for more money, following which she sued Mrs Okedina for arrears of pay, unfair dismissal and race discrimination.
Mrs Okedina argued that these claims were automatically invalid because Miss Chikale did not have the right to work in the UK, but a Tribunal upheld the claims. Mrs Okadena took the matter to the Employment Appeal Tribunal (EAT), arguing that the contract of employment was unenforceable.
The EAT saw the crux of the matter being that neither the 2010 nor the 2013 contracts were illegal at the time they were signed. Firstly, there was neither an intention to commit an illegal act nor an ignoring of any statutory prohibition at that time, which would be the two types of illegality that could render the contracts unenforceable from the outset.
However, there is a third category of illegality, when a contract that is initially lawful subsequently becomes illegal and the party who later uses it as the basis for legal action knowingly participates in its illegal performance. The EAT felt that although Miss Chikale had been aware that her application to remain in the UK had been rejected, this did not mean that she had knowingly performed her contract illegally. She could, therefore, sue as she had.
The Court of Appeal upheld that ruling, pointing out that the Immigration, Asylum and Nationality Act 2006 provided a mechanism to penalize employers of illegal workers, but not the workers themselves. It did not deny those workers an opportunity to remedy unfair treatment. It agreed with the EAT that Miss Chikale had not knowingly participated in any illegal performance of her contract and was, therefore, entitled to bring her claims to a Tribunal.
Employers must be aware that liability cannot be avoided through claims that a contract was illegally performed, if the person performing it was not complicit in the illegality. By extension, employees may bring discrimination and other claims even if a contact is being performed illegally.
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