The UK Supreme Court has recently upheld an Employment Tribunal decision that the illegality of an individual’s contract of employment (because she did not have the right to work in the UK) did not preclude her from claiming that her employer discriminated
against her on racial grounds (namely her nationality) and therefore that she was entitled to the compensation for injury to feelings, which she had been awarded by the Employment Tribunal.
The case is Hounga v Allen and it shows that an employer will not always be able to rely on the illegality defence in circumstances where it has mistreated an employee who does not have permission to work in the UK. The basic premise of the illegality defence
is simply that a claimant should not be allowed to enforce, or profit from, an arrangement which is illegal. The Supreme Court acknowledged and agreed that Miss Hounga’s claims of breach of contract and unfair dismissal (and certain other claims) could not
succeed because her contract of employment, on which they were founded, was illegal.
However, the Supreme Court explained that different rules apply to claims of unlawful discrimination (in this case on racial grounds) as these claims amount to a kind of legal wrongdoing known as a statutory tort. It held that, in this case, Miss Hounga’s
claim of unlawful discrimination succeeded and the defendant could not rely on the fact that the arrangement was illegal to defeat the claim.
The Tribunal, in this case, found the main facts to be as follows. Miss Hounga arrived in Britain in 2007, aged 14, from Nigeria on a six month visitor visa using a false identity. The arrangement to come to the UK was made by members of her extended family,
including Mrs Allen. Although Miss Hounga had no right to work in the UK and, after July 2007 no right to remain in the UK, Mrs Allen employed her to look after her children in the home. In July 2008, Miss Hounga was evicted from the home by Mrs Allen and
dismissed from her employment.
The Supreme Court decided that there was no “inextricable link” between the illegality of the employment contract and the facts giving rise to the discrimination claim, which if present would mean that the court couldn’t permit recovery without appearing to
condone the illegal conduct. It said that the illegal employment relationship merely formed the “context” in which the unlawful discrimination took place and the defence of illegality did not therefore apply.
It also went on to consider whether the claim should be prevented from proceeding as a matter of public policy – i.e. that the legal system cannot condone something which is illegal. The majority of the Supreme Court expressed the view that this case probably
did not meet the test for applying the illegality defence for public policy reasons. In any event, they held that there was a counter-argument which outweighed the illegality rationale, namely: “the prominent strain of current public policy against trafficking
and in favour of the protection of its victims”, for which reason they decided that it would be contrary to public policy to allow the illegality defence to succeed.
Kim Freeman-Smith, employment solicitor at Berg, had this to say about the case: “Although this case has been decided in the narrow context of the race discrimination claim of someone who did not have the right to work in the UK, in its judgment the Supreme
Court gives detailed guidance about the defence of illegality and how and when it should be applied in the case of statutory torts. Of course, the law of discrimination is wider than just race discrimination and illegal employment relationships are not only
to do with someone’s right to work in this jurisdiction. Therefore, while its facts are very specific and illegality is (fortunately) uncommon in most commercial contexts, this is a noteworthy case to everyone (including an employer) who is subject to the
obligation not to discriminate on the grounds of any protected characteristic”.
For more information about any of the above or for practical commercial advice on this or any other aspect of employment law, please contact
Kim Freeman-Smith of the Berg Employment Team on 0161 833 9211 or email her at
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(The information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Berg or any of its partners or employees. Professional legal advice should
be obtained before taking, or refraining from taking, any action as a result of this article.)